Cheaper by the dozen

A US immigrant has turned his negative shopping experiences into a business opportunity. And he already has more than 100 deals lined up for his new website GroopBuy.

By DANIELLE MAX
311_GroopBuy.co.il (photo credit: Courtesy)
311_GroopBuy.co.il
(photo credit: Courtesy)
David Shadpour, the founder of the recently launched deals site GroopBuy.co.il, is no stranger to Internet start-ups. The 27-year-old Los Angeles native began working in online media upon graduating from Yeshiva University in New York. After two years of working in the US, he came to Israel to help local start-ups connect with American investors.
Shadpour, who made aliya with his wife two and a half years ago, soon found himself thrust into the difficulties of life in Israel. Unlike many olim who either silently accept the situation or grumble about it among themselves, the entrepreneurial Shadpour has devised a way of turning his frustrating experiences – especially when it came to bargaining – into a business opportunity.
“If you go shopping by yourself, you are going to get ripped off,” he says, clearly still burnt by the experience of negotiating in Israel as a newcomer.
“One of the problems is that when you go into a store and speak in English, they think you are a rich American, and they raise the prices.”
With his dark skin, Shadpour said he could easily pass for an Israeli, until he opened his mouth, at which point he automatically felt at a disadvantage.
Looking for a way to bring better deals to the Anglo community, many of whom lack the protektzia or the knowledge of where to get the best bargains afforded to native Israelis, Shadpour developed his deals website.
The secure site promotes a daily offer from a variety of business and services, all set at more than 60 percent off the regular price. (The site, which is closed on Shabbat, also offers a side promotion that stays up for a full week.) While the offers are attractive – such as NIS 50 for a full dental check-up, including X-rays and cleaning, or NIS 40 for NIS 180 worth of food at a restaurant – there is a catch. For everyone to get the bargain, a minimum number of people must purchase it through the site before the offer closes. If this minimum is not reached, buyers receive an e-mail informing them that their credit card has not been charged. However, if enough people do sign up, as soon as the deal ends the credit card transaction goes through and customers receive a printable coupon via e-mail.
This minimum-number structure is how the site is able to offer what Shadpour calls “outrageous deals.”
Essentially, the individual buyers form a buying membership warehouse club chain in the US) know, bulk buying is cheaper.
“The success is in the volume,” says Shadpour. “It only works if enough people buy the deals.”
Currently, the numbers needed to activate a particular promotion are low; but as the site gains in popularity, this minimum will increase.
One of the ways would-be buyers can ensure that the minimum is met is to share the deal with friends via Facebook, Twitter or e-mail. This means that the site promotes itself virally (there is also an extensive advertising campaign in place). This viral nature of the Internet explains how the site received more than 1,000 page views on the day it went live.
Although the concept of online group buying is new to Israel, there are hundreds of sites operating in the US. The daddy of them all is Groupon, which started in 2008 and now exists in some 60 cities across America. At the moment, the Israeli version is operational only in Jerusalem. There are, however, plans to roll out in Tel Aviv and Ra’anana – both areas with large concentrations of Anglos – before eventually taking the model nationwide.
A wide range of vendors are lined up to have their chance at GroopBuy glory.
Already there are more than 100 deals set to appear on the site, and firms are contacting the company daily to get their business online.
Despite this interest, Shadpour says he has turned many companies down for not reaching the level of service and standards that Anglo consumers expect and demand.
“I’m not going to include businesses just because they offer a good deal,” he explains. “If they give bad customer service, I am not interested in featuring them on the site.”
Bargains that have made the grade include manicures and pedicures, laser hair removal, piano lessons, horseback riding, paragliding and ulpan lessons.
But it hasn’t been easy promoting the idea to Israeli businesses. “We’ve had to explain the concept not only of the site but also of marketing and advertising to many companies. It has been challenging,” Shadpour admits.
For those vendors who sign on, it means an influx of new customers, many of whom will pay over and above the face value of the coupon and will, if they receive good service, return time and time again.
Shadpour also emphasizes that GroopBuy is a valuable marketing tool for new businesses that don’t have a large advertising budget.
For the consumers, the benefits are clear – getting better prices at many of the local vendors that they would use anyway, as well as an introduction to other businesses and experiences they might be reluctant to try at full cost.
Shadpour, who is still keeping his day job, says that making money isn’t his No. 1 priority, although of course, it would be a welcome benefit.
He says a key reason he opened the business here – other than helping people save shekels – was to create a viable enterprise in Israel; one that stays in this country rather than looking to the US to make its fortune.