4th January, 2022

BULK BUYING MAKES SENSE

Gone are the days of paying recommended retail price.

Whether it’s the evolution of industry or the attitude of consumers these days, we just want a say in what we pay.

When we think of obtaining a discount, we might think we need formidable negotiation skills or a face so lovable it demands its own discount but there is another way to obtain a discount without the seller having to concede anything.

It’s through BULK BUYING and is fundamentally made possible by ECONOMIES OF SCALE.

I won’t treat you to the thrilling theoretical explanation of ECONOMIES OF SCALE but it basically means that if the time and effort to produce and sell a large amount of something is reduced, the sale price of each item can be reduced and still yield the same profit.

If you don’t believe me, walk into anywhere that sells anything at a listed price, take the item and the price tag up to see the manager. Tell them you will buy ten of them if they knock 10% off the lot. I guarantee they will be more interested in selling ten units at a discounted rate than arguing that they can’t change the price. Its because it also works in their favour…

How would Buildshare™ approach it?

Well recently I had two friends from different circles that were both looking at buying the same model Ute. They were both about to happily pay the full price, but I encouraged them to meet me at the dealership with a plan to SAVE MONEY. We were to go and wait until we saw someone else looking at the same models. Eventually we ended up meeting a couple that were looking at them and after a bit of chatting we came up with a plan to join forces and offer to buy three at once if the salesperson would reduce each by $8,000.

Now I’d like to tell you they went for it and that I was a hero but I’d be lying.

However, they did agree to discount $5,000 (or 12%) off each… So I was a bit of a hero.

They couldn’t believe how easy it was to save so much money, and I couldn’t believe they couldn’t believe it. Sure, it wasn’t the normal way to buy in bulk but what does a salesperson care about whether they sell three to one, or one to three?

I proved to them all that there was a smarter way to buy what they wanted, and in the process learned that there was also a limit to how low the Ute’s could be sold even when selling 3 at once.

Anyway, the moral to the story is this…

I’m not saying everyone should go out now and buy 3 Ute’s but just think about what you are buying, and how you are buying it.

Is it really the smartest way and if not, is it worth doing it differently?