Have you ever wondered how Nearbuy – the app that lets you discover deals near you – makes money? In this post we will discuss the revenue model of Nearbuy.
Nearbuy is a platform that helps users discover deals or discounts with service providers like restaurants, spas, gyms, hotels and even health care providers near them location.
To avail the deals or discounts, a user has to register on the Nearbuy app/website. Once registered, he/she searches for deals with service providers. Upon finding the deal of his/her choice, the user has to ‘buy’ the service at the ‘deal price’ by making an upfront payment on the Nearbuy Platform. The user is then provided a voucher which he has to present to the service provider to avail of the service.
The Revenue Model of Nearbuy
Nearbuy makes money by charging the service providers a commission on the value of services sold through the nearbuy platform.
Nearbuy helps offline businesses find customers and make sales online by listing their services on the Nearbuy Platform and in return charges them a commission on services sold through the Nearbuy Platform.
So you must be wondering why do Service Providers list their services on the nearbuy platform? Not only do they have to provide the services at a discount but also pay Nearbuy a commission on the sales made. So the question that naturally comes to your mind is how do these service providers themselves end up making money?
To answer this question we must understand the nature of the Industries in which these service providers operate. These industries include:
- Personal Care & Fitness like Salons and Parlours.
- Food and Beverages like Restaurants and Bars
- Hospitality like Hotels and Guest Houses
- Entertainment like Movie Theaters and Clubs.
While it might apparently seem to you that there is not much for the service providers from their association with Nearbuy, we must recognise the basic characteristics of these industries to better appreciate why they associate themselves with brands like Nearbuy.
These service providers have to incur fixed establishment costs like rent of premises, electricity and salaries of staff (irrespective of the turnaround) and often experience variable demand depending upon the time of the day and the day of the week.
Take the example of a movie theater. To run a show, it has incur the same fixed costs irrespective of whether there is a 10% occupancy of the seats or the show is sold out. We know that most movie theatres experience better demand on weekends than on weekdays.
Now the movie theatre can, during the days of weak demand, offer tickets at a discount through the Nearbuy platform which will help fill up more seats and help recover its fixed costs. This will not only improve its topline (increase revenue) but also make a positive contribution to its bottom line (make more profit).
Similar is the case for other service providers like salons and restaurants.
Also businesses list themselves on the nearbuy platform to publicize themselves and find new customers in the hope of turning them into regular paying customers in the near future or to sell to them additional services at full cost.
Hope you liked our presentation on the revenue model of Nearbuy where we discussed how Nearbuy makes money. You might also like to know more about the revenue model of Oyo Rooms.