How group buys work: a primer
03-29-2001, 04:02 AM
#1
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Lately I've had communications with several newbies that suggest many people don't fully understand how a group buy works. So here's my attempt to explain them. Hopefully some pieces of this post can be archived for future reference.
A group buy is a sale or discount offered on a product or accessory to members of or visitors to this board. Normally, there are no restrictions on particpation, e.g., you don't have to live near the person offering the group buy and you don't even have to own an S2000. Group buys are organized and run by individual owners and /or sponsors of this board.
The products sold in groups buys are often developed and made by the individual owner or sponsor or involve volume purchases of another vendor's product. In the latter case, the person organizing the GB makes a deal with the supplier for a volume discount and passes all or some of the savings on to buyers.
Usually, there are ony two restrictions on a group buy: time and/or number of buyers. In the former case, the discounted price for the product offered expires after a certain date, so you must buy it before that time. GBs with a time restriction may also have volume requirements, but not in every case.
In a volume restricted GB, the GB goes ahead only if a minimum number of buyers makes a commitment (usually the number needed so that the organizer of the GB can get the volume discount). In these cases, the organizer of the GB relies on the commitments made by prospective buyers. If too many people indicate a desire to buy, then back out of the deal, the organizer can't make the GB work, and in some cases may lose money for deposits and the like.
In many cases, GBs are really a sale or a way of introducing a new product to loyal S2000 owners (members of this board) at cost or a major discount. We use GBs this way because most of our products are developed with the help of owners who belong to this board. In some cases, owners who help with the development of the product or accessory get it for free when it goes into production.
In most cases, the GB provides benefits to both the organizer and the buyer. The organizer may make a small profit or get the product free or at a steep discount. The buyer, in almost every instance, gets a good deal.
In most cases, products odered via group buys take longer to get, usually because the organizer needs to reach the volume minimums or because the product can't be made until enough orders or commitments have been made. So they often require patience on the part of both buyer and organizer.
Hope this helps.
A group buy is a sale or discount offered on a product or accessory to members of or visitors to this board. Normally, there are no restrictions on particpation, e.g., you don't have to live near the person offering the group buy and you don't even have to own an S2000. Group buys are organized and run by individual owners and /or sponsors of this board.
The products sold in groups buys are often developed and made by the individual owner or sponsor or involve volume purchases of another vendor's product. In the latter case, the person organizing the GB makes a deal with the supplier for a volume discount and passes all or some of the savings on to buyers.
Usually, there are ony two restrictions on a group buy: time and/or number of buyers. In the former case, the discounted price for the product offered expires after a certain date, so you must buy it before that time. GBs with a time restriction may also have volume requirements, but not in every case.
In a volume restricted GB, the GB goes ahead only if a minimum number of buyers makes a commitment (usually the number needed so that the organizer of the GB can get the volume discount). In these cases, the organizer of the GB relies on the commitments made by prospective buyers. If too many people indicate a desire to buy, then back out of the deal, the organizer can't make the GB work, and in some cases may lose money for deposits and the like.
In many cases, GBs are really a sale or a way of introducing a new product to loyal S2000 owners (members of this board) at cost or a major discount. We use GBs this way because most of our products are developed with the help of owners who belong to this board. In some cases, owners who help with the development of the product or accessory get it for free when it goes into production.
In most cases, the GB provides benefits to both the organizer and the buyer. The organizer may make a small profit or get the product free or at a steep discount. The buyer, in almost every instance, gets a good deal.
In most cases, products odered via group buys take longer to get, usually because the organizer needs to reach the volume minimums or because the product can't be made until enough orders or commitments have been made. So they often require patience on the part of both buyer and organizer.
Hope this helps.
03-29-2001, 04:32 AM
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This is just an example of a very easy GB. I decided I wanted an inner cover (headliner) for my S2K. At MG racing they go for $435 retail (minus 10% for belonging to S2Ki). I just emailed them and asked if we could sell 5 how much, 10 how much? and they gave me the figures $385, $365). I posted it on GBs and we had 20 sign up. MG Racing lowered their price to $360 plus shipping. Individuals paid MG directly and are being shipped directly. We got a great price and MG sold 20 and got some great good will. So it can be as easy as this.
Mark
01TheBlackBeast#0090
Mark
01TheBlackBeast#0090
03-29-2001, 08:17 AM
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Rick thanks for the thorough explanation.
I do wish people did the GB like Drmark suggests. Not only do you get the product fast but it leaves out the middleman. I would be far more apt to doing a GB like Drmark suggests then when I know it has to go through 3 hands to get to me and they are skimming money off the top. IMHO
I do wish people did the GB like Drmark suggests. Not only do you get the product fast but it leaves out the middleman. I would be far more apt to doing a GB like Drmark suggests then when I know it has to go through 3 hands to get to me and they are skimming money off the top. IMHO
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