Typically, a group buy consists of a group of people pooling their purchasing power. An organizer contacts a vendor and negotiates a discount on the price of some item(s) and / or free shipping. Participants indicate their desired quantities, and / or sizes or colors, and the organizer receives the shipment and disburses it to the participants.
What Group Buys are NOT!
Group buys are not a means for an organizer to make a profit or pay for their own purchases by adding a surcharge to other participants' items.
Why are Group Buys good?
Frequently, participants can get better prices than local shops may offer. In other cases, they may be able to get rare items that don't show up in local stores very often. It also gives you the opportunity to socialize with other club members in person.
Why are Group Buys bad?
By buying in quantity, group buy participants face challenges similar to the local stores. Some livestock ship poorly and losses up to a certain percentage are typical. In the local stores, however, those losses don't make it into the display tanks. Even specimens that make it to the display tanks face losses, regardless of the care given them. (We've all seen and commented on dead livestock in shops' tanks.)
Additionally, the demands of having to cross the metroplex on short notice can be challenging to say the least. Interrupting your daily routine to pick up your item(s) can be burdensome, but that is one of the hidden costs to participating in group buys- especially when the group buy includes livestock.
Finally, sometimes dealing with vendors can be difficult. Because they are typically not local, contact can be sporadic at times. It may also be hard to judge the reputation of a vendor who is not local. DOAs and returns can also be a problem. Some wholesalers may expect a certain amount of livestock to not make the trip, so the fact that buyers are counting on every specimen to survive isn't a given to the seller. Small consolation when you are the one with the DOA item.
Summary
All that being said, group buys are a wonderful way to leverage the purchasing power of a large group. With proper preparation and realistic expectations, a group buy can often be a rewarding experience. Listed here are some of the tips and tricks others have learned by having participated in or organized a group buy.
Group Buy Best Practices
As an organizer:
- Start small. If this is the first time you're doing a group buy, consider asking someone with more experience to help, or limiting the group buy to a certain dollar amount or quantity.
- Gauge interest before starting one. Post to a forum other than the group buys forum so that those who express interest don't expect their interest to be directly translated into participation. If you have a list of the item(s) available in the proposed group buy, ask potential participants to give you a ballpark estimate of how many / how much they would want. Additionally, once the interest is strong enough, ask a moderator to lock the thread after pointing to the other thread in the group buys forum.
- Research the vendor. Try to find information on previous group buys with this vendor as well as individual purchases. Check ebay, RC, other boards, even google.
- Consider breaking up the group buy by geography.
- Check local prices. Sometimes local stores can get the same item cheaper, especially when you consider shipping costs.
- Once enough people are interested, contact the vendor. BE NICE! Give them an idea of how much your group might be buying, when you expect to place the order, and when you would like the items shipped. Now would be a good time to discuss discounts for different price points, the potential for repeat business, and the possibility of free shipping or freebies. Below is a sample similar to one I recently used.
- Ask for a direct line or a cell number where the vendor can be reached during normal business hours. Don't depend on email alone.
- Ask the vendor if they have actual photos of the item, not representations or links to other sites. If the item(s) are livestock, ask for sizes.
- If the group buy is for equipment, ask the vendor about returns and warranties. If the unit breaks within the warranty period, who does the person have to send the unit back to- the vendor or the manufacturer?
- Ask the vendor if he or she can accommodate a quantity 20% more than the amount you're currently anticipating. As the deadline for a group buy approaches, those sitting on the fence might decide to join at the last minute.
- Ask about the DOA policy for livestock. Does the vendor want DOA items returned? A sample of your tank water? A description of the acclimation procedures you used? Is shipping free for replacements? Can a person receiving a DOA substitute for another item, get their payment back, or take store credit?
- Ask the vendor about acclimation procedures. Some livestock require special acclimation.
- Ask about the substitution policy. If the vendor wishes to substitute, make sure the participants agree. If they do not, make sure the vendor knows that for certain orders, substitution will not be acceptable.
- Decide on payment methods. Some vendors have storefronts that allow users to place and pay for their own orders, specifying shipping with other orders that are part of the group buy. Other vendors may not have the capability. If the organizer has to place the order themselves, he or she may want to take payment in advance. Paypal is an option, but calculating the paypal fees may be burdensome. Please do not add any fees to the items so that you make a profit. That is not what group buys are about.
- Decide on a shipping date. Monday through Thursday are better, in case an order is delayed. Friday deliveries may be delayed until Monday, meaning livestock could sit at a shipper's facility for an extra 48 hours.
- Open the group buy by posting to the group buy forum. Post a list of items (if applicable), their prices, and payment methods.
- With the vendor's input on the availability and potential shipping dates, set a date for closure of the group buy, and a date for shipping. Now would be a good time to start a detailed spreadsheet (if you haven't already), listing the participant, their quantities and items, their totals (including tax if applicable) and the status of payment if they're paying in advance.
- Update the original post as well as adding a new post to the thread with any new information. That way those checking the thread will see updates up front, as well as from a 'new post' search. At each step of the process, post an update.
- Once the order date / time has passed, contact the vendor to be sure he or she can still fulfill the order quantity and timing. Make sure the vendor doesn't ask to make any last minute changes.
- Ask the vendor to label each bag with the person's name, if more than one kind of item is being shipped. This makes separating the orders once received easy. Bagging items for individual distribution has to be balanced against the shipping costs of potentially having extra boxes. (Two separate bags with the same item take up twice as much room as one bag with two items.)
- Ask participants how they would like to be contacted when the order arrives.
- Provide the participants with the pickup address, as well as the organizer's contact information. If the organizer is uncomfortable posting such information in the thread, send private messages to participants.
- If payment is to be made at pickup, have some change handy for cash payment.
- Consider asking for help on the delivery day. There's a lot of work to be done!
- When the package arrives, open the package and verify the inventory against your spreadsheet.
- If multiple orders are shipped in the same bag, separate them into portions matching participants' orders.
- Make sure everything is accounted for and separated into participants' orders before anyone picks up their order..
- Be sure to let the vendor know how things went- good or bad. This helps smooth the way for the next person to organize a group buy.
As a participant:
- If a participant posts in the thread asking for an item or items, he or she commits to paying for their order. No window shopping or layaways, please. Uncollected and unpaid items can be a financial burden on the organizer, and may result in the death of lovely creatures we all aim to keep.
- The participant needs to check the thread frequently for any information and updates. This is especially important when the order is shipped. They should not expect the organizer to contact them via PM or email unless the organizer has agreed to do so ahead of time. The organizer is busy making sure everything is accounted for, so the buyer should have the courtesy to stay current and be reading along.
- The participant should pay quickly, as soon as costs have been established. If they have doubts about giving their money to the organizer, contact a member of the BOD or moderators for assistance. Don't leave the organizer with a debt that was never theirs.
- Participants should pick up their order promptly. They are saving money, and perhaps will be inconvenienced by having to travel, but so be it. If they want to get it on their own schedule, get it at the LFS and pay the normal price. Livestock should be picked up as soon as possible to assure its survival. Do not expect the organizer to float and acclimate the livestock because you can't show up for 10 hours. Make arrangements in advance, but plan on taking care of this responsibility in a timely manner that day.
- The participant should find out specifically what the vendor's acclimation procedure is, and not just "do it like I always have." Acclimation techniques vary, and the livestock's survival is at stake. By not following the recommended method, your items may die and the vendor has no responsibility to "make it right" if their advice was ignored.
- If a participant is having their order picked up by someone else, make sure that information appears in the thread for the group buy.
- The participant should provide the organizer with their real name, their username, a phone number and an email address. The organizer may need to contact you if something comes up suddenly, so be available and provide adequate contact information. This may prove useful if you are a no-show when the order arrives, simply because you forgot due to life's little surprises. Please try to be considerate to the organizer, who'd carried the brunt of the work load.
- When making payment, make sure to identify yourself clearly by name, username, and what you've ordered, so that the organizer doesn't have to guess nor ask "Who is myxilplik?"
- The participant should realize that while it would be ideal to receive their order with a 100% survival rate (or in good condition in the case of dry goods,) there is always a chance some items may be DOA or damaged. A few losses shouldn't be a major concern ("I bought 100 snails and 4 died!") but if there are major losses or damage, the organizer should be contacted in the GB thread. The organizer will contact the vendor regarding any possible resolution. Check the DOA policy of the vendor to see what steps are required for replacement or reimbursement.
Intro Letter:
Hi Vendor, I'm trying to put together a group buy from other members of the Dallas Fort Worth Marine Aquarium Society (www.dfwmas.org) for [some item(s).].
[A few of our members have purchased items from you in the past,] [and you come highly recommended,] [and we were very pleased with the items received in the group buy of [date]].. We are considering placing the order with you on or about [date]. Would you please provide pricing, including price break point quantities for [some items]. Are there other incentives like free shipping and waiving box fees for reaching certain price points?
I am hopeful this purchase will result in a continuing relationship with our club. Please understand I am not an official of the club, nor do I represent them in any official capacity. I'm just trying to do a good turn for the great folks there.
We look forward to doing business with you.
2nd Letter:
Hi Vendor, thanks for the information about your quantities and prices. We are very interested in pursuing this purchase. I do have a list of questions that I need to ask so that our participants can confidently join this group buy:
Is there a direct number where you can be reached in the event we need to contact you?
[Do you have photographs of [some item] so that we could get an idea about color or size?]
Please provide information on your DOA policy. Are there special steps we should take to save specimens to qualify for a DOA guarantee?
Is there a certain acclimatization process that we must use in order to qualify for your DOA policy? What acclimatization process do you recommend for the items listed?
If the specific color, sizes, or species of our order cannot be met, do you have a policy for substitution?
To make things easier for distribution, would it be possible to pack items in quantities related to individual orders? If so, could we ask you to label each bag with the name of a participant?
What is your preferred method of payment? Can each participant contact you directly and pay for their portion or is a single payment the only option?
The cutoff for the group buy is [date] and I would be interested in placing the order with you on [date].The current estimate is for [quantity of ??]. In many cases members jump on the order as the deadline approaches. How much margin above these estimated quantities can you comfortably manage? Would you be able to fill the order on or about this date or is there an alternative time frame more suitable to your schedule?
Thank you for taking time to answer our questions. We look forward to placing the order as soon as practical.
Letter as the end of the Group Buy approaches:
Hi Vendor,
I just wanted to update you on the expected order to be placed on [date]. We've reached the [x discount] level and I expect to have a firm list of items by [date]. Here is the current list of items and quantities. Can you still fulfill these quantities, or do we need to break this purchase into two different orders?
Thanks!
[Insert spreadsheet or cut / paste from spreadsheet to email]
Letter at Group Buy end:
Hi Vendor, the group buy for [items] closed today. Here is our final list of items and quantities. As we discussed, I'd like to arrange delivery for [date]. Having placed the order via your storefront [or over the phone, or via this email, or however it was worked out] do you see any problems meeting this order's size, colors, or quantities?
Thank you in advance for supporting our club in this process.
Letter after Group Buy delivery:
Hi Vendor, I just wanted to say what a pleasure it was to purchase [items] from you. Everyone was pleased with the quality of the [items] and we all appreciate all the hard work and patience you showed us during this process. We're looking forward to purchasing from you in the future.
Thank you very much for your time. We realize these types of orders can require a great deal of effort. Please extend our thanks to your team as well.
Sample spreadsheet:
Here is a sample spreadsheet for tracking orders.
