I don't get group buys - help me understand

[BuyPokerChips]

I just don't get it. I mean I understand the underlying concept of pooling purchasing power to get a volume discount. That's a straight-forward concept. What I don't get is:

<ul type="square">[*]What the motivation is for the group purchase organizer, and how it is any different than the motivation for your average chip retailer? I mean I know what they buy them for, and I know what they sell them for - it's still reselling chips, just for a different margin and different level of service.[*]Why these posts about group buys allowed, and almost encouraged, while posts from established retailers shunned?[/list]
Furthermore, what I would really like to understand better is why people participate in these (if, infact, they even do). I understand it's grounded in enjoying a volume discount - no argument cheaper is better, all things considered. But how much cheaper is it on average? And does this discount justify any tradeoffs group buy praticipants must make?

So let's say you're buying 500 real clay chips in a group buy. Pricing varies, of course, but for example let's use the pricing of this current group buy which would come to a little over $480 for 500 chips, shipped. Now, if we compare this to the average full retail price for a 500-chip set of high-end clay chips shipped (probably about $575), then there is a "Group Buy" savings of $95, or 16.5%. That's the savings. It's almost $100, but of course this is on a somewhat substantial purchase of say $500-$600.

So, my understanding then is that this discount is in exchange for the following trade-offs:

<ul type="square">[*]Paying cash upfront, perhaps a couple months in the case of a customized group buy[*]Paying cash (or Paypal) to someone you know primarily by a made up nickname on a anonymous discussion group on the assumption that they will send you something down the road.[*]In the event of a customized design - agreeing to buy 500 chips based on a graphic design mock-up that you have little idea of how will look on an actual chip.[*]In the event of a customized design - agreeing to a concensus designed chip, or one designed by the group buy organizer, which you have little say over - so essentially it's not really a customized chip, just someone elses design that you get to approve upfront.[*]In the event of a customized design - Not having the ability to add to your set or replace lost or damaged chips down the road because it's a one-time event.[*]Assuming the risk that the final prices could change and you're already somewhat pot committed as you've already paid the bulk of the purchase price[*]Assuming the risk of a fradulent group buy.[*]Giving up any degree of customer service in the event that their is a problem with the merchandise and/or the shipment gets lost in transit[*]Giving up the ability to return a purchase for a full refund[*]Giving up the convenience and security protection provided by paying with a credit card[/list]
So to go thru with a group buy (which are not just on poker chip boards, but on any product-specific board on the web), participants are willing to make all of these trade-offs to save 10-20% (roughly 16.5% in this instance). This doesn't compute with me. Seems like I'm giving up a lot for a little. Maybe not. Apparently (If these things actually go thru to fruition), there are many people who are more than willing to make this trade-off. Maybe everything goes well and there are no problems. Maybe it's a complete scam. Who knows.

My primary concern is this seems like too good a con for the average confidence man to pass up. Even if the majority of the people doing this are above board, that existence makes room for the con men of the world to swoop in and make a quick buck.

Let's take TenPercenter's group buy of 100,000 Paulson chips "you read that right, 100,000 chip order", on this highly-regarded discussion board, for example. Now, no offense TenPercenter, I'm not accusing you in any way of running a scam. Rahter I'm just pointing out that if a confidence man was to run a scam, they could do something very similar to what you've done and perhaps walk away with 2 years salary for the average person on this 100,000 chip group buy alone, not to mention replicating this on every product-specific board on the Internet.

Some out there might be saying, wait, TenPercenter already did at least one group buy (on the Pharoah's Club Chipco) and everyone got their chips just fine. Could be, but I don't really even have any concrete information confirming this even went thru successful, but let's assume it did. So there's no risk right? He's proved himself trustful. Or you could take the perspective that it was just the first step in a long con, one that could really bilk a bunch of people our of some cash, like a 100,000 chip order. After all, why would he organize a 2nd group buy when he already has his perfect chip set from the first buy. Who needs two different sets of chips?

Disclaimer - Of course, I'm a poker chip retailer, so reading this you might be thinking I'm just trying to cast doubt on the legitimacy of group buys to boost my business. You're going to have to trust me on this one, but that's not really it. What I'm trying to figure out is what the motivations are for joining a group buy. I'm in the business of solving problems for consumers looking for gaming supplies. What I'm trying to figure out is if there is a large customer base out there who by the act of participating in group buys is actually screaming:

"HEY, we're willing to make a lot of concessions for a 10-20% discount - including revoking our rights to return an item or get a refund of any kind, including our ability to pay with a credit card, including paying 2 months in advance, including revoking our claim to any form of customer service, including assuming the risk of a last minute price change after we've already paid 2 months in advance, including assuming the risks and hassles of dealing with UPS on any items lost in transit".

If that is indeed the reality, then poker chip retailers (including my company), need to recognize this consumer need and meet it with a solution. That's why I'm posting.

[Cassius]

The concessions are made for a 10-20% discount on UNIQUE high quality chips, that in many cases noone else has the ability to buy. Those who participate DO have a say and can give their opinions on the makeup, and generally whatever company (say Chipco) DOES give real sample and real mock-ups, so there isn't some mystery about how these chips are going to look. Additionally, if you don't like the design, by all means don't get them.

The lure of a group buy is to get an otherwise unique (if not personally custom, certainly very custom in the realm of available poker chips) set of chips that are of high quality and impeccible design - as the design of most chips out there is simply lacking - and if one is going to spend ~ $1 a chip, you want the best design out there, and this can definitely come from a group buy of custom designed chips.

[BuyPokerChips]

Thanks for the input.

So is it primarily the unique nature that is appealing? I can see this for chip security so no one sneaks in chips to a private game, but if there are other chips out how secure is it really? If the uniqueness is the draw, at what point is it no longer considered "Unique"? 5000, 10,000, or 100,000 like in TenPercenter's group buy?

Questions:

1) Is the uniqueness more important that the savings?
2) It seems that you feel chip design is really lacking in the consumer world. What design elements do you (and others) really look for?
3) Do you have any concerns about being scammed in a group buy?

[meat whistle]

I agree with Cassius. I found this site after buying Dan Harringtons book. It happens I was also looking for nice looking poker chips. I have learned more about chips from this forum then I could ever have imagined. I was going to by a set from a local supplier but after seeing what options are out there I changed my mind as every site seems to offer the same style but the pricing differences are what amazes me for the same chip set. It makes me wonder if some of these dealers are just drop shipping. I would be all for a group by if I like the design as I would be getting high quality chips that are unique.

[rickw]

For me, the main point is the quality of design, followed by the uniqueness factor. It's nice to get a little bit of a discount also, but that's not my main concern.

I participated in the second round of the Egyptian chipco group buy. There was a lot of collaboration on the design process and the end product was pretty great. I do think there is a group of chip consumers who are not satisfied with the current commercial offerings. Look at the new James Bond paulsons for example. While the Paulsons are great chips, who did they talk to when they came up with the inlay? My guess is that the current Paulson design project being run by TenPercenter will run circles around the James Bond chips by the time it is done

As to security, the ordering was handled through a chip merchant on the web (holdempokerchips.com) and there were no issues.

While it might be possible to set up a scam, escrows can be used or you could go through a merchant.

[ddollevoet]

I also believe that there is a significant savings in art charges when splitting the cost across all buyers (vs. your own custom purchase).

[toots]

[ QUOTE ]

1) Is the uniqueness more important that the savings?
2) It seems that you feel chip design is really lacking in the consumer world. What design elements do you (and others) really look for?
3) Do you have any concerns about being scammed in a group buy?

[/ QUOTE ]

1) For me, yeah. Not completely unique, but something a little more special than one more "James Bond" knock-off

2) Exceedingly lacking. This is where TenPercenter's ChipCo Egyptians shine. It is truly one of the prettiest sets of poker chips out there. I got samples (about 70) of these because they're so pretty that they trumped my extreme dislike of ChipCos.

Looking at the fantasy chips out there now, they all seem like variations on the "Viva Las Vegas" theme. Gambling motifs, fake casino names, Las Vegas references, all of which are unimaginative and leave me cold.

What elements do I look for? Something that makes the chip seem like some effort was put into it. Good, congruent art (rather than a random collection of gambling icons), and art that's congruent with the medium. The egyptians look good on ChipCo. It's conceivable that they could have also worked on a full-graphic Paulson or Blue Chip, but I think he's on a better idea with a simpler inlay design for traditional clay chips.

3) Some. On the recent TenPercenter group buy, he worked through a known chip vendor, so that certainly made me feel more comfortable, although he'd already established his good reputation with the first egyptians buy that he did himself.

[meat whistle]

[ QUOTE ]

Questions:

1) Is the uniqueness more important that the savings?
2) It seems that you feel chip design is really lacking in the consumer world. What design elements do you (and others) really look for?
3) Do you have any concerns about being scammed in a group buy?

[/ QUOTE ]
I think the main stream consumer chip design is really lacking. Look at how many places are trying to cash in on the poker craze(wal-mart, target, etc.). I would like to see more options in edge spots. I think more recessed chip options would allow consumers to be able to cheaply customize their chips with labels. I bought the Nexgens as quick/cheap option until I find a clay chip that I like. I also don't like the metal inserts. The Nexgens have them and you can still tell but sound a little better than the dice/suited chips my friends have. I don't think most people are worried about security at their home games. If you have chips like the egyptians or custom clays they are very hard to dupe.

[toots]

Oh, and one other factor:

TenPercenter pulled a major coup on his second round of egyptians by including an oversized chip (the octagon) and a plaque. I get the impression that ChipCo doesn't want to do that too often, and that it was made possible largely by presenting them with a large enough order to make it worth their while.

[jojobinks]

uniqueness/security, and having 100k out there matters not a whit. 100k means there're 100-150 sets in the country. i can't imagine how many dice/suited/diamond chips there are in the US.

bp.com: i like the modern clays, and considered buying them. but not having a say in the inlay (which is not good) makes a big difference. and they just aren't paulsons.

where i was: i was fairly sure i was going to do pc.com, but didn't really have any idea what i wanted to do for design. then i got my paulson samples, and now i'm pretty sure i'm willing to give up some control for what i anticipate will be the best set available.

what i expect from the ten group buy:
-a unique set
-a beautiful design
-the best quality chip available
-safe financial transactions through holdempokerchips.com
-a price not more than most "off the rack" chips.

what's not to understand?