Economies of scale are the cost savings associated with a larger production size of certain product, the larger the production scale, the lower the per unit product cost.

FORBES: Groupon's Advantage

Economies of scale are the cost savings associated with a larger production scale (size) of certain product, the larger the production scale, the lower the per unit product cost.

FORBES: Is Groupon's Business Model Sustainable?

Alvarez is banking that fewer, more robust partnerships will yield economies of scale: As each distributor carries more product into stores, the overall per-unit cost of distribution will drop.

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