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.