Group-buying websites tinker with the concept of economies of scale. As the number of the production grows bigger, things will be easier to produce. On the converse, consumers will also benefit from this concept. As the number of transaction increase, the total transaction cost will also decrease.

This is the concept behind group-buying websites which allows them to get a leverage and acquire deals that couold even give as much as 80% discount because the prices are pre-negotiated.

It benefits the consumer as they buy the products at a pre-negotiated and cheaper price. It benefits the producers because a sale is still a sale. And the middle man, or the group-buying website also gets a certain commission from these transactions. Sounds like a fail proof business model?

Not if the websites are getting a bad rep.

Group-buying websites are not getting the similar success that Groupon has experienced in other shores.

In China, group buying websites are on the state of decline. After accusation and a lot of word of mouth saying that some products are fake, these websites are having a difficult time in the market. Add to this the fact that they are sprouting from each corner like wild mushrooms.

China’s had around 6,000 group-buying websites at one time. 456 shut down on October alone, making the tally 1,483 before the last month of the year starts.

The need to be competitive adds fuel to the already growing fire of lack of sales dues to the public not biting into the deals because of qualms of the item’s authenticity.

If authenticity is the name of the game, Gadgetepoint customers have nothing to worry about.