CHRIS: And this presents a win-win opportunity for the vendors, the distributors, the manufacturers, etc. So how do we present this to the buyers, to the members? And then how do we also make this presentation and this workflow optimized for your organization, so that you're not stuck in the middle dealing with a lot of logistics. A lot of buying groups have to do things manually in order to deal with the complexity, and but we want to talk about today are some of the areas that you can immediately take advantage of to enable self-service and really incentivize and create an upward spiral of activity within your buying group.
So that's really the topic today. And just to start us out, Ron, I would love it if you would talk about the high-level concepts that we're going to go into and then we can start picking through those one by one.
RON: Yeah, that sounds good. Thanks, Chris. One of the things I think you need to really start with is, what is a buying group and why do you have pricing groups in the first place? I mean, we already understand that buying groups is about getting a better deal. That's really why we do buying groups. Why do they have Sam's Clubs and Costcos and things like that is because people can go and buy in bulk.
And if we have people buying in bulk and in large quantities, then Costco can go to the manufacturers and get a better deal and then they can sell in bulk. And it's a win-win for everybody, right? We get 27 bottles of ketchup at a time and a deal, and they get to get ketchup with a lot better deal, and Heinz can sell a lot more ketchup. I mean, it's a simple thing like that.
But if you think about it, as you owning the buying group buying platform how can your buyers benefit? Because if they benefit, they're going to come back and buy more from you. So really, you ultimately benefit. So: 1) how can they benefit? 2) How can your vendors benefit? 3) How can you benefit?
If you think through all those different scenarios, that's what we're going to cover today. So, for example, with Costco, you have a membership or you don't. So you think, that's it. That's the only thing they can do. Lo and behold, I got marketed to a few years ago about an executive membership and an executive membership—and I don't remember Chris, is it 1% or 2% back, I can't remember. But instead of $55 a year, it cost me $110 a year. But we were buying a lot from Costco. So I upgraded to an executive membership, and you can imagine how many millions of users upgraded the executive membership. And so they immediately doubled for, all of those members, the annual fee just by offering this new thing so that's one option, right?
So do we have different levels of pricing groups? Do we have different levels of quantity breaks that you might get on a product? If you order a thousand a month or sell a thousand a month, they're going to give you "X" price. But if you could sell more than a thousand a month do you get another 10% off? Great. How can we figure out how to give a little bit bigger discount or bundle those together so you can now make that additional discount.
So today we're going to dive into some of the things like logistics around discounts and promotions, discounts around grouping them into different roles. For example, resellers might come in and get a different price than a distributor might get a different price than a wholesaler. When they log in automatically, does the group buying platform know who they are and auto adjust the prices based on their role to create those different groups? Can we group things together and allow them to do things?