Group Sales and Volume Discounts for Group Buying

"Companies have a new way to play the selling game these days - restricted access Internet-based DealRooms. Set up by application service provider eWinWin, a DealRoom lets a company cut both costs and prices by offering the same product to many customers at the same time, provided they all agree to the same ship date."

"eWinWin looks promising…a unique twist on the B2B exchange concept. The demand aggregation concept is attractive to small-business customers who otherwise would have to pay prohibitively higher prices. This demand aggregator's efficient sales tool for manufacturers should give it longevity."

"eWinWin addresses, for the first time via e-commerce, a genuine set of challenges for manufacturers. Demand consistency, set-ups and line switchover's, workforce fluctuations, margins and pricing can all be improved, to the direct benefit of workers, manufacturers and customers. With eWinWin, it's now possible for a supplier to group buyers to lower everyone's costs. This is a unique combination of products that could only happen online."

"Rather than let the buyers dictate prices, the company runs its own DealRoom, offering customers an Internet-based aggregation purchasing model. Customers appreciate the shot at lower pricing, and the molder has improved business. In one case, the aggregate order from 11 buyers lowered the price by over 40%. Buyers potentially save, while Weatherchem gets to run its molding machines longer, with fewer mold changes."

"Through what is known as aggregated buying, customers who visit the web site get volume discounts because they're combining their product orders with those of other buyers. As more buyers place orders, the price goes down. More importantly, the technology is enticing some customers to place larger orders."

"Manufacturers looking to reduce costs and boost sales have uncovered a new way to leverage the Internet: demand aggregation. The theory is simple--group small buyers along a single production run on a single date, and offer a lower price as an incentive--but the potential payback to both suppliers and customers is huge."

"Mid-to low-volume buyers of packaging materials can be challenged by minimum-order requirements set by packaging materials suppliers. If minimum orders are not met, the price of packaging materials may become costly because machine setup time is needed to adjust for small orders. Until recently, no one seemed to give much thought to the extra charges applied for small orders. But now, thanks to the Internet, a change could be on the way."

"eWinWin couples new technology with an economy-of-scale approach, and everybody wins. eWinWin facilitates planned production for manufacturers, dramatically reducing production costs."

"Demand aggregation brings buyers together around a specific item they all need to order and a specific ship date. As more buyers place orders, the price goes down. At the same time, the supplier gains planning and production efficiencies: Production runs are more efficient, changeover time is reduced, and the supplier lowers its costs."

"The supplier posts a price curve tied to the volume of products ordered. A buyer can log on to the site and see products available at current prices for certain ship dates. If a buyer places an order, the price drops because the economies of scale increase with volume… eWinWin's product offering facilitates this process even further by providing ancillary announcement services to participating buyers."

"Most importantly, brokers and middlemen lose their monopoly in the demand aggregation model. Manufacturers and buyers could incorporate this model into their businesses on their own. It could serve as a very useful tool to extend sales reach, increase market share and lower production costs."

"As customers are given access to the DealRoom and place their orders, the price is simply reduced along the volume discount curve – allowing them to purchase the (product) at a lower price. This is not an auction. After the offer expires, all participants receive the price corresponding to the total volume purchased by all participants."