Group buy rules?

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#1
Hey Tommy,

Wondering what the PCF rules on group buys is going to be. I assume it will be somewhat similar as elsewhere but having specifics would be appreciated.

Thanks!

RM
 

dennis63

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#3
I would definitely like to contribute on the rules, as I've experienced just about everything that can go wrong in a group buy.
 

dennis63

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#5
I'd like to hear your suggestions.
The most important single thing that participants and organizers need to keep in mind is: A group buy is just that -- a group of members buying a large quantity of an item -- more than any one member would buy alone -- and sharing the quantity discount. The organizer buys for the group, and is often asked to commit to a certain quantity by a certain time by the company making chips (or dealer buttons, or whatever.)

I've organized five group buys on another site. On nearly every one, I lost $1,000 (each) in the process.

Here are some things that can go wrong which we should try to avoid on this site:

1. I'd suggest that our group buys have a "commitment date," after which you can't cancel, disappear, or change your member name to avoid paying.

2. Ordering in a group buy is a commitment. When you make it, recognize you are giving your word to complete the transaction.

3. There should be a limit to the number of times a participant can change their order while the group buy is active.

4. I'd suggest having a "rating system" for members who take part in group buys, and limiting the number of group buys a member can participate in at one time until they have an "A" rating. One person trying to buy in six different group buys can lead us back to the problem in # 1.

5. The organizers should definitely be rated or have some strict qualifications, so we can avoid scams.

6. Anyone organizing a group buy should understand that they may be asked to produce proof of the group's expenses -- costs, shipping, etc.

7. Organizers should not be allowed to make any money from the group buy. While this sounds pretty basic, I'm sure it's been done elsewhere. The cost to buy or produce the item has to be shared among the members in the buy, or the price per item based on the total cost / number of items.

7. Members taking part in a group buy should pay for shipping and Paypal fees. (I recall a past group buy on Chiptalk where a member (not me) bought 30,000 chips from BCC and got stuck with the cost of Paypal fees -- international at that.) The organizer is another member, not a business, and can't "eat" over 3 percent of the cost of everyone's stuff. I would suggest a rule that says, "If you order $500 in chips, and send the organizer $500 via paypal (net $484.90), you have just cancelled your order."

8. No torpedoing allowed: I coined this term. If I'm running a group buy for some chips, another member -- who is also running a group buy for some other chips -- posts negative and inaccurate information in my group buy to convince people to back out of my group. He launches a "torpedo" into my group buy, usually in the form of a "question." (Aren't those chips you're selling actually radioactive? ) A member who does this should have his own group buy closed.

9. There should be some clear rules about whether a merchant (like me) can organize a group buy for anything they might actually later sell in their business. If so, the merchant should provide the goods to the group at the true production cost. We may want to avoid this altogether.

My other suggestions are more about manners than anything we could make as a rule.

Group buy piracy, or "I don't want to buy. I just want to tell you what to buy." Don't get on board, demand changes in the project, then not buy the resulting chip, button, shirt, whatever.

Hang up the "Internet attitude - " Saying, "Hey, Organizer: Have it on time at the quoted price. Any delays or price changes and I'll be complaining about your awful "customer service." (Most organizers aren't businesses.)
 
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#6
Excellent points Dennis. I have only run one group buy in the past for playing cards, not chips but many of your points ring true to me. I did lose a little money(not $1000!!) on PP fees and forgot to include the cost of shipping from the company to me but I would gladly do it again.

Points 4,5, and 6 were things I wouldn't have thought of but are 100% fair and probably needed.

Lets see what Tommy has to say...
 

dennis63

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#7
These are all just suggestions, of course. This site can make its own rules. I sincerely hope our members here won't need to be told most of this.
 
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#8
These are all just suggestions, of course. This site can make its own rules. I sincerely hope our members here won't need to be told most of this.
Of course. I just assume that maybe Tommy is still working out his GB rules and it never hurts to hear from those with experience.
 

Tommy

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#9
DOH! How did I miss this thread. embarrassed-smiley62.gif I have not put anything together. What Dennis wrote looks good. I don't think I was ever in a chip GB before. (just for car parts on another forum)

I tried to start one back in 2006 for Matsui chips. ;)
 

MrWitti

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#10
I wouldn't limit the numbers of group buy a member can enter. There should be other ways to insure against people who back out. (Deposit, pay before order etc...)
Ratings are always good. I like that idea.

dennis63; said:
4. I'd suggest having a "rating system" for members who take part in group buys, and limiting the number of group buys a member can participate in at one time until they have an "A" rating. One person trying to buy in six different group buys can lead us back to the problem in # 1.
 
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#11
One thing that would be nice is that the organizer should provide regular updates (say, once a week) if the GB is going to take a while. That would help reduce questions on the status and/or people dropping in and out (point 1).
 
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#12
If you lose money as an organizer you have no one to blame but yourself. Sorry to be blunt but that's my opinion. If you take part in a group buy you are agreeing to split all costs evenly. This includes the chips, shipping (both from the manufacturer to you and from you to the group buy participants), packaging materials, any import fees (if receiving chips from an international vendor), etc. etc. etc. Whenever I participate in a group buy I always pitch in a little more as a "thank you" to the organizer. Yes I realize it is against the rules for them to "make money" from this but also believe that they deserve a little something for their time and effort.

Don't want to be stuck with stuff that people ordered but didn't pay for? It's simple. Don't order until everyone has paid. If you don't pay you don't get chips. This is especially important for non-commercial organizers (like me...and presumably many others). I can't afford to order $20k in chips without people pre-paying. I don't have that kind of scratch burning a hole in my pocket. If someone backs out and that puts you under a quantity that would give you a discount...too bad. The group will have to make up the difference.

As far as PayPal goes, I almost got my account frozen due to larger than normal volume. I called not once but twice to let them know that this was going to happen and they assured me I wouldn't run into any issues. But they still flagged it. I guess it looks suspicious when a guy gets $15k transferred to him in the span of a few weeks. There was also the issue of people sending payment using the "gift" option to avoid fees. If I ever organize another group buy people that send gifts through PayPal will have their money refunded and will be requested to resend. In addition to threatening to freeze my account for the volume they also said that using PayPal for group buying, while not prohibited, is strongly discouraged. It has been a couple of years so I am not sure if they have changed their stance on it but I doubt it.
 

Tommy

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#13
To add to what links_slayer has said, you also need to check the amount received and number of transactions that Paypal will flag your acct for reporting to the IRS. I think eBay is 100 transaction AND $15k now.
 

dennis63

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#14
If you lose money as an organizer you have no one to blame but yourself. Sorry to be blunt but that's my opinion. If you take part in a group buy you are agreeing to split all costs evenly. This includes the chips, shipping (both from the manufacturer to you and from you to the group buy participants), packaging materials, any import fees (if receiving chips from an international vendor), etc. etc. etc. Whenever I participate in a group buy I always pitch in a little more as a "thank you" to the organizer. Yes I realize it is against the rules for them to "make money" from this but also believe that they deserve a little something for their time and effort.

Don't want to be stuck with stuff that people ordered but didn't pay for? It's simple. Don't order until everyone has paid. If you don't pay you don't get chips. This is especially important for non-commercial organizers (like me...and presumably many others). I can't afford to order $20k in chips without people pre-paying. I don't have that kind of scratch burning a hole in my pocket. If someone backs out and that puts you under a quantity that would give you a discount...too bad. The group will have to make up the difference.

As far as PayPal goes, I almost got my account frozen due to larger than normal volume. I called not once but twice to let them know that this was going to happen and they assured me I wouldn't run into any issues. But they still flagged it. I guess it looks suspicious when a guy gets $15k transferred to him in the span of a few weeks. There was also the issue of people sending payment using the "gift" option to avoid fees. If I ever organize another group buy people that send gifts through PayPal will have their money refunded and will be requested to resend. In addition to threatening to freeze my account for the volume they also said that using PayPal for group buying, while not prohibited, is strongly discouraged. It has been a couple of years so I am not sure if they have changed their stance on it but I doubt it.
All good points, I'd say. My mistakes are my own, and I posted about them because I've made about every mistake you could have doing a group buy, and I wouldn't want to see any of them happen to others.
 
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#15
If you lose money as an organizer you have no one to blame but yourself. Sorry to be blunt but that's my opinion. If you take part in a group buy you are agreeing to split all costs evenly. This includes the chips, shipping (both from the manufacturer to you and from you to the group buy participants), packaging materials, any import fees (if receiving chips from an international vendor), etc. etc. etc. Whenever I participate in a group buy I always pitch in a little more as a "thank you" to the organizer. Yes I realize it is against the rules for them to "make money" from this but also believe that they deserve a little something for their time and effort.
What about the organizer's time. That has value, right?
 
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