Follow the crowd and get a deal

These days on the Internet, everything's social.

Media. Networking. And yup, even purchasing.

It's called group buying, and it's an emerging trend on the Web in 2010.

Here's the skinny: It's a sales transaction that rewards consumers for banding together to purchase something.

The most well-known site for group buying is a company called Groupon, which was recently valued at more than $1 billion. Each day, Groupon will feature a localized deal in your city. As an example, let's say it's a retail-priced $30 canoe trip. But it's being offered for $17. So if enough people buy the offer and collectively reach the minimum number required for such a deal -- you can share the deal via Facebook, Twitter or e-mail with followers, friends and acquaintances in hopes they'll join in -- everyone enjoys the savings.

And, of course, the selling company makes out nice because once it reaches that minimum threshold of people opting in and buying, it's still making money, and it brings in more customers than it might have otherwise had. Groupon calls it "collective buying power."

Recently in the sports world, we've seen group buying trickling in.

The Cleveland Indians are using Groupon to offer a half-price deal on tickets for two games against the New York Mets next week.

Phoenix Suns center Amare Stoudemire teamed up with AtCost.com and Razorgator Tickets and utilized group-buying ideology to sell NBA Western Conference finals playoff tickets off his Facebook page.

His Facebook store rewarded fans with cheaper prices on the tickets by both purchasing and sharing via Twitter, Facebook and e-mail. So instead of having to meet a minimum threshold, a fan could stand to reap a discount on the tickets by simply e-mailing their entire contact list about the deal. And the more people who bought the tickets, the more savings those down the line got. Tickets that retailed for $600 for Game 4 in Sections 201-205 were going for a few hundred dollars less via this methodology, according to Mashable.com.

"Group buying works because it's a group of friends that are coming together to buy something at a better price," said Anthony Rodriguez, CEO of Lineage Management/Interactive, who has Stoudemire as a client and partnered with AtCost to develop the ease-of-use group-buying software featured on Stoudemire's Facebook page for this promotion. "Who's a better influencer, who has more credibility than a celebrity? That's what we're tapping into."

We've seen Shaquille O'Neal do some social media endorsing via Facebook and his Twitter account for a diet strip. We've seen Tissot, a watch company Danica Patrick endorses, sponsor her Twitter page.

And in April, we wrote about FanWaves, a service that attaches advertisements to any links athletes are dropping on their Twitter streams in an effort to generate revenue off a social-media platform.

But group buying ups the ante in some sense, because it's taking those millions of fans and followers athletes have via social media and leveraging them for a mutually beneficial relationship. The fan makes out well, with a better deal than they would have normally gotten.

And the athlete makes out well because they get paid too.

"It's either an endorsement or joint venture for revenue," Rodriguez said.

Other ways group buying could present itself in the sports world is through merchandise.

Rodriguez said their software also allows for video streaming. As an example, an athlete could do a live auction of signed memorabilia. If a baseball player has 10 signed balls, the more bidding and sharing that goes around, the cheaper each ball would be compared to the initial baseline price.

Teams and leagues could stand to benefit from group buying on the Web by getting rid of extra bulk merchandise. Got T-shirts with old logos, or jerseys of a player you just traded out of town? Apply the group-buying strategy to such inventory: Not only do you get to sell off the last run of a particular item, but the consumer also gets a nice deal in return.

Of course, teams and leagues could also sell current merchandise with group-buying methodology.

"You're rewarding your fanbase when they evangelize and tell all their friends and by bringing them deals," Rodriguez said.

Ryan Corazza is a freelance writer and Web designer based in Chicago.