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Old Jan 24, 2018, 10:22 pm
  #14  
dordal
 
Join Date: Dec 2003
Location: Oakland CA
Programs: DL Gold, AS MVPG, Globalist
Posts: 1,008
Originally Posted by aquamarinesteph
I'm quite sure that both Bose and Best Buy have an office dedicated to that specific task of selling to business customers who want better pricing on bulk purchases.
The interesting thing is that they do... but they often won't give the same price as retail (esp. when a promotion is running). The economic term is 'willingness to pay', and they know that the individual consumer is much more price conscious than the typical business, and also typically has more limited resources. As long as the price of the item is above their cost, they're still happy to sell it, but they very specifically don't want the business to buy in quantity at that cost, because they know they can get more out of the business. Why sell an item for $20 when the customer is willing to pay $30?

Hence the consumer promotions, the special deals, and the rebates. Charge the consumer what he'll pay ($20) and charge the business what it'll pay ($30).

Incidentally, this is the entire reason rebates exist too. A business won't be able to take advantage of a rebate ( quantity limits, costs staff time to fill out, etc.), but a consumer will. Thus they can price differentiate between customers -- give the business a higher price and the consumer a lower price for the same item.

The great thing about buying groups is that they get around this. As a business, I can have ten people buy for me at the consumer price. Because we (thankfully) live in a country that does not prohibit resale of goods, my business can then buy the goods from the ten people that bought them, effectively getting the consumer price for the business. And, of course, some nice actual spend for the people who buy with their credit cards.
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