And it works. It’s a mess to organize because you have to keep track of who joined, how many joined, sending invoices, tracking payments, printing shipping labels, … if there was a website or a vBulletin or phpBB widget that could help them organise the group buy, I’m sure they would jump on it.

I have personnaly participated in group buys and I have also organized one myself. I’m thinking about developping my own group buy app and releasing it for the forums community.

People don’t BUY based on “swarming.” That’s the dumbest thing I have ever heard. If I want a chocolate bar, I buy a chocolate bar. 10 cents isn’t going to sway me. If I’m buying a TV, I want the best price possible and I have a TOLERANCE for how long this transaction must occur. I’m not waiting for a month before there’s enough of a storm to buy something. With product differentiation there’s going to be so much trouble gathering up momentum for this. I want a Sony but everyone else wants a Panasonic, boohoo.

This also doesn’t work for products that are decentralized. Retailers won’t want to ship out fridges or washers or CARS to multiple points for razor thin or zero margins. There’s no incentive!

In fact, you idiots must have never worked in a small retailer store. I spent two years doing online retailing, specifically IT products in Silicon Valley. Let me tell you first off what we use to compete: NOT PRICE. Yeah, price is never configured into our mode of thought BECAUSE IT DOESN’T WORK OUT. We don’t have the luxury of getting into protracted price wars. We don’t have the luxury of stocking insane amount of products. We don’t have the luxury of saying “hmm, let’s get some losses in hopes of people returning for another buy” because quite simply we lack the money, time, and resources to do that. Rather we concentrated on service. And service costs money people. Services makes it so that someone has to be at the phone. At the store. At the warehouse. With software to manage all this and figure out what’s wrong and how to proceed.

God you people will rah rah cheer for anything stupid as long as it sounds alright on paper. Then the next best thing is you stupid idiots just keep saying “oh good luck here’s my best” as if that’s going to be suddenly make bottom lines appear magically.

Ugh.

Avoid these people at all costs. I tried using them. When the swarm I was part of did not get the product, they proceeded to email me over 1000 times to tell me that the swarm had failed. Actually they are still emailing me now.

I’ve emailed them multiple times to no avail.

eSwarm: Compras en grupo online.
Después de leer la noticia en Techcrunch sobre el nuevo sitio eSwarm, no puedo dejar de pensar que a veces el auge por la web 2.0 da vida a proyectos con pocas perspectivas de éxito, quizás por demasiado ambiciosos,…

Grumpy

Imagine you take part in a swarm to buy a car.

At the beginning, with the ‘heat’ of the moment -a new website, a great idea, impressive expectations, ‘I need this car!!’,…- you think a car worth $18,000 will cost you $15,000 (maybe over expectation, but no one gives you a clue on the “discount” you’ll have). Then, it turns out that the maximal offer by sellers is $17,500 (far from what you thought and far from what you want to pay).

Will you HAVE to buy it or you can say.. “oh, no.. that’s not what I thought..” and abandon the swarm? I think it’s difficult to have suppliers offering a competitive price if they don’t have a guaranteed volume and it’s also difficult to have an interesting size of swarm without a guaranteed discount or with the “you will pay whatever it’s offered” obligation.

Do you really think that on-line “swarming” can be based on the same rules of common interest and “morality” as real life “swarming”? How would you control it? Wouldn’t this control turn into a very low volume of successful “swarm buy” activities?

I know up front how many widgets (swarmed units) I know my shipping / distribution costs (presumably eSwarm will provide the recipeint / swarmes location to suppliers) — I know my fees (eSwarm collection and sometimes the donation to a cause percentage) and I know my costs.

It could work if every mom and pop organization uses it for their day to day needs — if the local softball team needs equipmen, swarm for it.

In sum, this has potential regardless if its an old idea — lots of recycled ideas make money when a different twist or spin is put in place or when sheer market dynamics (read number of interent users) change.

Look at wall street — investment bankers make money building conglomerates; then they make money breaking the conglomerates apart –and this repeats.

Here is why, economically, I don’t think this model will work. This is my opinion, and I may be wrong.

1) I don’t believe that Tier 1 suppliers like Costco and Amazon (using those because they have been mentioned) will participate as suppliers for a program like this because they are already business models with razor thin margins and need to make a profit. If they find that there are items offered by other retailers with which they feel they can compete on price, they will lower their prices accordingly as “specials” on their respective sites. These will ultimately be broadcast through the social network and people will opt to purchase from Amazon rather than an unknown supplier bidding on eSwarm. Amazon gets the business, the buyer gets the piece of mind and Amazon does not have to pay any additional referral fees (ie. give up even more margin)

2) History is relevant in this case because when the initial sites mentioned in this space were launched, there were far fewer comparison pricing sites and social networks. If I want to find the best price on a Canon digital camera and purchase it from a reputable retailer, I can find the best price in a few minutes. (it may not necessarily be the lowest price, but the best price in my mind, manufacturer warranty, return policy, privacy policies from the seller, etc.)

3) The comparison of the model to a single potential buyer bidding out for multiple units of a product is not an apples-to-apples comparison. If we take that scenario, and make the assumption that the seller needs to make a profit, there are economies of scale to selling 100 units of an item to one buyer, including reduced shipping costs, single point of invoicing and customer service, etc. It is very different from 100 individuals contracting with one seller.

4) Unless I am misunderstanding them, the referral fees have a multi-level marketing feel to them. If eSwarm only accepts 501(c)3 organizations into their swarms, it sounds good, but I would fear that we suddenly see a new breed of spam, encouraging people to get discounts on products so the queen bee can make some additional money.

I hope that makes sense.

And for books we have Borders, Barnes and Noble, etc. There’s definitely no room for an online bookstore…

Look, there are millions more users on the net now than 10 years ago, even 2 years ago, which is why sites are getting funding.

….ah..you’ve stopped reading…

um………make a Facebook widget……………..is that TC enough for you?????

P.S. keep Duncan, but I suggest that each week, Duncan, Michael and the rest have to keep an open tally of which sites they think will take off. Loser forfeits a months salary at the end of the year)))

the theory is great but the individualism in us prevents it working in reality.

Just because something failed in Web 1.0 isn’t a valid reason for it to fail in Web 2.0. That is a valid argument. That being said, some things will never be good ideas. Not even everything that is a good idea is an executable business.

The problem with a lot of Web 2.0 businesses is that they fail to understand the dynamics of business interactions. Eswarm is addressing the wrong market - as someone pointed out earlier, it may make sense from a B2B standpoint, but for regular bargains, we’ve already got Costco, Sam’s Club, Aldi, etc.