The topic of joint procurement worries a lot of people. It is quite natural for people to want to receive goods for less money, at wholesale prices. And if for this you need to join a group, then this is not a problem. So what are joint purchases on the Internet? And how much can it be profitable? In order to understand how the joint venture works, you need to know the appropriate terminology.
Some terms
On most pages of the joint venture, the organizers prescribe the same conditions (or as similar as possible). All participants use the same terms. But for a person who first plunged into the topic of joint purchases, it can sometimes be difficult to figure out.
So, the basic concepts and terms that are used on joint shopping sites:
- Joint purchase (JV) is the process of buying goods at wholesale prices from manufacturers and wholesale companies. Due to the large volumes, the cost of production will be significantly lower than the market.
- The organizer is the person who creates the joint venture page, determines the category of goods for which buyers will be collected, finds suppliers and manages the procurement process itself. That is, the organizer is an intermediary between wholesalers and all other customers.
- Brand (supplier) - a trademark, company or supplier whose products are identified by certain characteristics from other goods of the same category.
- Organizational fee - a percentage of the goods or a fixed amount that the organizer takes from each buyer for payment of delivery, storage, telephone calls with a wholesaler, etc.
- A procurement participant is a person who takes part in a joint venture. Each member of the joint venture must familiarize themselves with the rules for their conduct and strictly follow them.
- Minimal - a fixed minimum amount for which the supplier releases the goods at the wholesale price.
- Size range - shoes or clothing of the same article, but of different sizes. Wholesalers often sell goods at an attractive price only in rows.
- Point of issue - place of transfer of goods.
- Attachment - purchased goods that customers have refused, and now they are offered to the rest of the joint venture participants.
- STOP - a term that says that the minimum or size range is assembled, and you can proceed to payment. The word "STOP" means that you can’t refuse the purchase, otherwise there is a risk of letting other participants down.
How it works
What is a "joint purchase organizer", you now imagine. In fact, this is the person who organizes the purchase on any available site and is responsible for collecting money and ordering goods. In fact, this is the one who receives the most benefits. After all, no one really knows where these 25-30% go - for expenses or for paying for the services of the time of the organizer himself.
What are joint purchases - joint venture? All stages of the organizer's work with participants look like this:
- Opening a purchase on the page, full information on the timing of its implementation, prices, conditions, etc.
- Participants select products and inform the organizer about this. He keeps a record of everything ordered.
- As soon as the minimal or size range is assembled, the organizer commands "STOP", and each customer again duplicates information about the product, prices and conditions.
- JV participants confirm the correctness of the order and their willingness to pay.
- The organizer makes a preliminary order for the supplier, and offers alternative options to the participants, if something is not available.
- The organizer tells you the time frame for the collection of money and the methods of transfer.
- The organizer places an order. As he waits, he tells the participants where their goods are located (sorting, transportation, in stock, etc.).
- After the goods arrived, the organizer informs where and when it can be picked up. Moreover, if required, the final calculation is made.
Often, JV participants see one price in the catalog, but in fact they have to pay more. This is called organizing. What is the organization fee in joint purchases? These are expenses that the organizer incurred during the execution and delivery of the order. This may include payment for transport company services, telephone calls, gasoline, if you need to pick up the parcels from the warehouse, etc. It is no secret that the organizers take a certain percentage for themselves - as compensation for the time spent.
Platforms
What are joint purchases? For the organizer, this is a way to make money. For a JV participant, this is a good option to buy the right products at wholesale prices. If all parties to the process, including the supplier and the transport company, act in good faith, then everyone will benefit.
There are several sites where the organizer and participants of the joint venture can interact:
- Specialized sites of the joint venture.
- Groups in social networks.
- Separate site.
Recently, competition in the joint venture has intensified. In fact, this is how you can start your own business with a minimum of investment. But because of competition, it became very difficult to promote your own joint venture, even if you offer favorable conditions. As practice has shown, orders begin to form in joint venture groups in social networks where there are at least 5,000 subscribers.
In addition, buyers prefer well-designed sites with a wide selection, conveniently designed goods and clear logistics.
JV Terms
In order to understand what joint purchases on the Internet are, you need to familiarize yourself with the terms of the joint venture. Usually on the relevant pages you can read this kind of information: “The organizer is not a seller. We also order goods with you in the same way, therefore, all claims regarding the quality of the goods and the risks associated with the fact that the parcel will not reach, all participants bear the same degree. "
In fact, this means that in the event of a marriage, the organizer may refuse to act as an intermediary between the customer and sellers. And he will have to independently return the goods of inadequate quality. Although most conscientious organizers take these problems upon themselves.
Whereas reassortment (the same article, but a different color) cannot be refused. As it is impossible to refuse the goods at any stage of the purchase, even before paying the money, otherwise there is a risk of getting into the black list. And this is true, because such a customer brings the rest of the participants.
It should be noted that in some cases, the organizers are cunning. In order to understand this, you need to remember once again what is the organizational fee in joint purchases. Practically on all pages of the joint venture it is indicated that this is a means to compensate for the expenses of the organizer. The information, as it were, confirms that the procurement organizer is not a private entrepreneur and has no income from this activity. This is a kind of excuse for the tax service.
However, it is no secret to anyone what joint purchases are. And everyone knows how to make money on them. When a person is the organizer, other participants can not control how, how much and where he spends money. And what percentage is left to itself. Moreover, many organizers of the joint venture become individual entrepreneurs and pay taxes in good faith. This means that the participants are misleading, and they are not dealing with a joint procurement site, but with an online store, possibly with slightly more affordable prices. But at the same time, the conditions for the purchase of goods on such a resource remain very strict, that is, no returns and no delays in payment.
If the order didn’t please something, then there is a “extension” catalog. What is an “outfit" in joint purchases? These are the things that you bought, but didn’t pick up or they didn’t match the customers in terms of color, style, etc. Such goods are put in a separate catalog and sold either at the purchase price or, with the consent of the owner, at an even lower price. As soon as the item is bought, the organizer returns the money to the owner.
Product selection
The category of goods and suppliers is chosen by the organizer. As practice has shown, the quickest way to place orders is in the “shoes” and “clothes” sections. If you take some highly specialized category, you need to recruit many times more participants to form an order. It works like this: for example, every 200th participant orders clothes, and skis or skates every 1000th, and only in season. However, in a narrow specialization there may be fewer competitors.
Payment
What are joint purchases? This is when the organizer collects money from all participants of the joint venture and makes an order with the wholesaler. Most supplier companies prefer a prepayment or deposit of 50% of the total amount. So the organizer always collects money in advance, because he does not want or is not able to invest his own.
Moreover, the organizers often collect all the 100% payment before the order is formed, even if the suppliers agree to pay off the bill upon receipt. This is done to secure, so that in case of refusals of participants not to stay with unredeemed items or redeemed, but not attached.
Where to pick up an order
Place of delivery of goods is determined by agreement. With small volumes, the transfer can take place from hand to hand, that is, when the organizer and the participant meet in person. Sometimes the organizers of the joint venture deliver things, especially large ones, to the addresses and take the appropriate fee for this. But with large volumes it becomes very inconvenient. Therefore, many leaders of the joint venture seek help from the CEH.
What is CEH in joint purchases? This is the center for issuing orders - a centralized warehouse where organizers send parcels and customers receive.
CEH services are paid. As a rule, this is 15-20 rubles. per week for a small package
Buyer risk
What are joint purchases? This is a risk for the participant:
- Give your money to a scammer with an attractive page on social networks.
- Receive goods of inadequate quality.
- Receive a product of a different color without the ability to refuse.
- The ordered item will not fit the color and style.
In fact, the joint venture participant risks the amount of the order.
Organizer risk
For the organizer, the risks are much higher. Here is a list of material losses that can be encountered when organizing a joint venture:
- The cost of creating your page.
- Page promotion.
- Purchase of goods on their own funds in order to finish the minimum or size range.
- Lost parcel transport company.
- Marriage, regrading, returns from customers.
Despite the fact that the organizers insure themselves and prescribe under the conditions that the goods cannot be returned, some customers manage to insist on their own. Intangible, but significant costs include the time spent on debugging the process, and the organization of each joint purchase.
Benefit for the buyer
What are joint purchases? This is a direct benefit to the buyer. He can purchase goods 10-30% cheaper than in a retail store. Some people order clothes, shoes and other things from abroad in this way. And these are the things that in our country sell with a markup of 200-300%.
Benefit for the organizer
For the organizer, the benefits are even more substantial. The thing is that he can receive money from several sources at once:
- Commission from the participants of the joint venture. Usually it is 5-7% of the amount, with expenses - 15-30%.
- Rebate Services. If orders pass through these platforms, then part of the funds is returned to the buyer.
- Refund from the bank (cashback) when making purchases with a card. They can return 0.5-2%. But as a rule, these are auction offers to increase customer loyalty with a limited period.
- Bonus programs from suppliers. In addition to the wholesale price, companies may be given a 5-15% discount for a regular customer or partner. She also all goes into the organizer's pocket.
So the joint venture is beneficial to all participants in the process. But this activity has its own risks, and they also need to be taken into account.