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Some notes on running a Group Buy

honmanm

pfm Member
  1. keep the options as simple as possible
    While it is good to present a range of options when discussing a possible GB, for the actual GB that should be nailed down to a single option. Most of the mistakes I've made, and a lot of the administrative hassle, have been a result of options that only a few people took up. For a "kit" GB it is probably wise to use a well-proven BOM, if one gets into the realm of exotic components things may get bogged down as everyone has their favourites and they're all expensive! IMO it's better to stick to "known good" parts, and not too expensive - then no-one has to pay for an fancy part that they are going to replace with something else.
  2. the more complex the BOM, the longer it'll take
    The fairly complex BOM of the HackerNAP (albeit nothing like the Starfish BOM) affected the duration of the GB in several ways - the component order had to be split amongst several suppliers, and by the the time the orders were placed some suppliers had run out of stock and the orders couldn't be completed until more parts had arrived from the manufacturers. In the HackerNAP GB example just one part held up the project by a month.
  3. add some contingency to the asking price
    Supplier prices can change between setting the GB price and placing the orders, Paypal charges and currency conversions may result in the GB receiving less than someone throught they were paying, and the process of posting-out is also a bit unpredictable. And components do get lost or forgotten and need to be re-sent. It's much better to have a small surplus at the end of the GB, than the organiser(s) being out of pocket. The surplus should be passed to PFM, of course!
    For the HackerNAP components GB the asking price was set at 5% above the budgeted cost of components + postage ("2nd class small packet" was used for most of the mailing). The GB ended up with a 1% surplus.
    In a single component GB there is less that could go wrong, so a contingency amount of about 2.5% would be appropriate.
  4. expect 10% extras
    I didn't know whether this idea would work out in practice, but we ended up ordering 10% more of everything than had been requested by the original GB members. The original idea was to be able to replace kits lost in the post, or make up the number of components where there had been counting errors (e.g if someone received an extra part, I could say "keep it" rather than having to ask for it to be sent on to the person who should have received it).
  5. finishing up
    At the end of the GB, whatever remains can be sold off - in the case of the HackerNAP component GB, the 10% extra figure worked out just right, with request for 10 extra kits coming in after the GB had got underway. However it's only possible to actually sell them off once the original GB members have received their goods, because that's when it is possible to work out what parts are left, and the financial status of the GB. As there won't be any spares left, those last kits must be sent out with shipping insurance (e.g. Royal Mail Special Delivery) and the postage cost will be higher. It may be necessary to increase the price of those last few items, to make the books balance (and because the postage is more expensive). Pass on any left-over money to PFM (use the Donate button on the menu bar)
  6. teamwork
    For big GBs this needs to be explored in greater depth. Uzinusa provided lots of help, insight, and the occasional shoulder to cry on for the HackerNAP components GB. However it would probably have been good to have organised a team as a pipeline: book-keeping, purchasing, sorting, and shipping. The sorting and shipping would have to be done in the same area or location.

All comments very welcome as the above is just one opinion on the matter!
 
I've not taken up the opportunity of a group buy (current living arrangement prevent me playing with this stuff) but I'm always really impressed by those who make the effort to manage them.

Rob
 
Hi,

As a lazy sod I would like to thank the every one who do the group buys it takes out all the hard work, and its cheaper than buying the MOQ if you only need 2 of something.


Thanks chaps!!!!


Pete
 
Mark, with a bit more detail on your initial post I'd like to suggest that this be made a "sticky" in the DIY section. Best, Andy
 
honmanm, how did you run the paypal side of things? Did you send out invoices or just accept payment as gift?

I didn't do invoices, just accepted PayPal payments however they came. The ethics of gift-vs-payment, I'm still quite unsure of. The GB is not a business, one isn't supplying goods or services (just acting as an intermediary) - yet equally the GB payments aren't "no-strings-attached" like a present. So I ended up leaving the choice up to the individual GB member.

Paypal was a bit of a bind because it took ages for the money to be cleared into my bank account.

For a GB like the current AVX cap one, the paypal charge is not too steep and if you have plenty of people who want to use PP, it'd probably be better for everyone to make PayPal payments - then you will also get those people's addresses. You could ask them to add £1 if paying by PP. Mrs H and I have a special bank account that never has money left in it, which we used to receive payments for the component GB.
It's harder to match up transactions where the money is paid into the bank, but that is probably the best method for GBs that are moderate volume and high value.
 
it is much harder to match payments direct to bank account in my experience as you get a slew of identical sized payments coming in, some without identifiers. If I ever do another GB though, I will use my bank account and give each payee a unique code for their payment. If they will include this code in the notes I will know what it relates to. e.g. "PFM0101"
 
Mark, with a bit more detail on your initial post I'd like to suggest that this be made a "sticky" in the DIY section. Best, Andy

What do you think should be expanded on... and what can we learn from your experience with the Starfish and Kendeil GBs?

(as an aside, one day it would probably be nice to do a "template" group buy spreadsheet).
 
Very good advice there Mark, great thread.

One of the contingencies to expect, and one that I overlooked, is import and customs duty on components from outside the EU.

I'm not sure where the current GB for AVX caps will be from but it's something to consider.

One of the problems with paying as paypal gift is that the buyers address doesn't show up. A far as I'm aware, if the payment comes from the paypal account balance then no fee is charged. Only when paying from credit or debit card do paypal charge.
 
I do believe that I incurred a paypal fee when I had to remove the funds in order to make a real payment to Farnell.

One problem I had with paypal gift is that some guys did not understand "gift" and passed there charges onto me which was a grrr moment.

Postage and package cost more than I expected also.
 
...One of the problems with paying as paypal gift is that the buyers address doesn't show up....

Another is that PayPal monitors gift payments and seems to take a dim view of anyone receiving too many...I have been told that if I receive too many my acct will be canceled.
 
This is a useful guide so I have 'stickied' it for a while..

Thanks for your comments

Jo
 
Good point Neil.

Also if you receive too many payments as goods or service's then you will be asked to upgrade to a business account which I presume means providing a tax reference etc. You would then pay a surcharge on all transactions.
 
Just wondering how long we should keep the GB names, costs data for.
Thinking along the lines of Mr Tax Man here.
 
Updated the main post to suggest a contingency amount of 2.5% when pricing simple single-component GBs.
 


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