Consumers Going Online To Find Group Buys

Fiyaz Keshwani has always been one to barter and is never happy paying full price when shopping. So when he found out he could get movie tickets at almost half off by jumping through a few hoops, he figured it’d be worth a little hassle for a great deal.

The 27-year-old from Edmonton turned to the Internet, collected money from dozens of fellow movie fans online and arranged to buy 1,500 tickets directly through Cineplex Odeon at wholesale prices.

Companies like Costco and Sam’s Club have long been known for leveraging the power of bulk buying to get lower prices. Now, consumers are turning to the Internet to find better deals by buying in big numbers.

“It stems from movies being expensive and prices have been going up quite a bit over the years,” Keshwani said in explaining why he’s organized eight separate movie ticket bulk purchases so far, which are often called “group buys.”

“When I first started, the minimum requirement for tickets was only 300 and so that was in my opinion a very achievable goal, especially when I was taking out 20 to 50 myself. And then it wasn’t that hard to get rid of the rest of them. And it just expanded from there.”

Keshwani admits organizing the mass purchase and mailing out all the tickets to buyers is “quite a bit of manual work” but he said it’s worth it for the deeply discounted movies. He also receives donations from appreciative buyers who sometimes send him a few extra dollars for his efforts. One grateful buyer even sent him $80 after buying 300 tickets.

A slew of websites have sprouted up in recent months to take the work out of organizing a group buy and typically offer deals of around 50 per cent off purchases – provided that a specified number of users agree to buy.

Restaurant gift certificates and spa packages are among the most common offers at sites like Groupon, StealTheDeal, TeamBuy, TeamSave, WagJag and Webpiggy. Most sites focus on Toronto, although StealTheDeal and WagJag offer some deals for Calgary, Edmonton, Halifax, Montreal, Ottawa, Winnipeg and Vancouver users.

Getting a half-priced gourmet burger or haircut is an appealing proposition, but web users are also upping the ante by rallying together in a bid to get discounts on five-figure purchases.

Fernando Simoes of Toronto got a few people involved in a group buy for a new 2010 Honda Acura MDX, although the deal eventually fell apart.

Simoes was hoping a dealer would consider selling the car for about $500 over cost if he could organize six or seven buyers to get in on the deal.

Problem was, the interested buyers he found online lived in different cities and getting them all to agree on the right timing proved too difficult.

But Simoes said it wasn’t a total waste of time and dealing with the other potential buyers helped him figure out the best possible deal he could get.

“I was able to exchange ideas on what the best prices were that they were getting versus what I was getting and that gave me a bit of a benchmark on how well I thought I could do personally,” said Simoes, adding that he ended up paying about $1,250 over the dealer’s cost, which he was happy with.

Things went a lot more smoothly for Toronto-based Mike Weatherup, who organized a group buy of 15 high-end TVs and ended up getting a deal of almost 30 per cent off.

He originally thought the $6,000 TV – which he called “the Ferrari of displays” – was out of his budget. But he was inspired to bargain with a few local shops after reading about other successful group buys online.

“You’ve got to do it with the smaller shops, you’d probably never get anything like that from Future Shop or Best Buy,” he said.

“The dealer was happy to get new clients and they were able to sell other products as well.”

While it was a bit stressful waiting for others to commit, Weatherup said it wasn’t too much of a hassle since each buyer was allowed to pay separately and on their own schedule.

Simoes said group buys are a no brainer – if you can get them to work.

“There’s a lot of merit behind a group buy,” he said.

“If you can get six or seven guys buying tires and you can save $150 or $200, why not get a much better deal?”