Group Purchase — a collective purchase of goods by a group of consumers — private individuals — at wholesale prices, bypassing retail retail chains. Consumers organize for a group purchase on Internet forums created specifically for that purpose.
The Essence of the Phenomenon
Group purchasing developed thanks to the mass spread of computers and the Internet in households. Communication online offers a variety of opportunities for self-organization, which can bring concrete material rewards, and the wholesale purchase of goods by a group of private consumers aiming to save on the retail markup became one of the first such experiments.
It all started with young mothers, who typically have no time to run around stores. Moreover, the arrival of a child always brings additional expenses. So mothers took to ordering diapers or baby food online — not each on her own, but as a group of like-minded people — getting the goods two or even three times cheaper. A group purchase is not an online store; it is a way to arrange things so as to bypass the retail markup.
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Now divide that imaginary figure by at least two: with the first half, buy everything listed above, and the second half... just keep for yourself. Not bad, is it? Think this is just fantasy and it doesn't happen?
And from time to time you'll need to split the sum not by two, but by three, and if you're lucky, even by five! |
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Advantages of Group Purchasing
- Pricing method: the wholesale price of the item itself plus 10-15% of its value for the group member who becomes the organizer and coordinator of the shared interests. Compared with a store's markups, this amount can be called a fair reward for the trouble.
- Buyers shape the assortment themselves. An item can be chosen to one's own taste and liking. In a store, the selection is limited by the seller's capabilities and interests.
- A sensible choice of goods based on one's real interests. The buyer is protected from impulse purchases, that is, from marketing tricks such as special product displays, music, or scents.
- Time savings. A purchase can be made without getting up from an armchair, or while out for a walk with a child in the park. Meeting the group-purchase organizer, who hands out the purchases at a pre-arranged location, also takes little time.
Disadvantages of Group Purchasing
- Since items are bought in batches at wholesale prices, mix-ups in sorting sometimes occur. Organizers always state honestly whether an item can be exchanged if a defect is found.
- Goods are ordered remotely, so mistakes with color or size are possible.
Retailers' Struggle Against Group Purchasing
Group purchasing represents a serious economic force, a new form of competition in retail trade based on the effective everyday use of modern information technology. Because it is decentralized and, unlike "piracy," does not break the law, it is very difficult for retailers to fight it.
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What's also outrageous is that before making a group purchase, a young mother comes to the store, finds the item she wants on the shelf, tries it on at length, picks out the model and color she wants... and then orders the very same thing three times cheaper through a group purchase. Such an approach is simply appalling, and if the situation does not change, clothing and children's-goods stores will be forced to introduce fitting-room restrictions, keep a database of group-purchase activists, and run shoppers against it before letting them try things on.” It's only curious how one could introduce fitting-room restrictions, and who would determine whether a person came to buy an outfit or is a malicious buyer intent on picking up bibs at bargain-basement prices together with accomplices from the neighborhood. POPSP (the Cheboksary group "Clothing Sellers Against Group Purchases," formed online)
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It seems the Internet and the civic initiative of group-purchase participants really do get in the way of covering, with shoppers' money, all their risks, insurance, rent, kickbacks to officials, vacations abroad, and so on. After all, it is no secret that many goods are sold in boutiques today with markups of as much as 500%. |
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