Buyers' Groups

Buyers' Groups

What is a Buyers' Group

In its most basic form, a buyers' group is a group of individuals that use their combined purchasing power to buy in volume, thus being able to purchase products at a greatly reduced rate. If you are having trouble getting the food you want at a price that is affordable, or maybe you have trouble accessing the food you would like to buy, or maybe you just want to surround yourself with like-minded people. A buyers’ group may be for you.  


Unfortunately for most of us, we don’t have much say in what food we can get. This is because the food purchased by suppliers are items they can move in volume, purchased at a lowest possible cost. This allows the products to be sent down long supply chains and arrive at the end somewhat affordable, with very little of the money paid going to those who took the risk of planting the seed or toiled in the field. For those of us that want to know more, we won’t get the real story about: “Who grew the food?”, “How was our food grown?”, “When was this product harvested?”. To know more you may need to go up the supply chain from your standard retailer.  

One of the biggest issues with sourcing from small ethical producers, is that these products come at a higher cost. This is mostly due to being grown in smaller volumes with more manual labour while paying higher wages. This means it is not possible to compete on price with huge supply chains buying in large volumes forcing farmers to accept prices often extremely low or sometimes even below the cost of production. If these smallholder products were to run the length of a standard supply chain, they would be unaffordable to most families by the time they got to your plate. And this is where we need to start rethinking how we source our food, which is where communal buying can come in as a potential solution.

To avoid a really expensive shopping bill for your ethical food, people have started buying groups so they can buy in bulk, at either wholesale or near wholesale prices. Somewhat obviously, the first thing to make this happen is to find a group of other like-minded people. Many groups also find they know a farmer or supplier willing to sell to their group at a reasonable price (if you don’t know someone, hit some growers up at the local farmers’ market). This can supplement the more general range of produce available from a larger wholesaler. Some groups even have some of their members providing food from their gardens or condiments they make themselves.

What is involved?

Ok, so let’s get into the dirty deets. Before you get started, you want to have at least 5-10 people all on the same page about the core ideas behind the group:

• Sourcing (fruit and veg, dry goods, household goods);

• Frequency (weekly, fortnightly, monthly, quarterly or sporadic); and

• Ethics (organic, local etc).

Frequency will often be dictated by sourcing. For example, if you want fruit and veg, you will want to meet at least fortnightly, or things will start to go bad. Frequency can also be mixed. Maybe you want Fruit and Veg weekly or fortnightly but you want dry goods monthly. You are in control, so you can set the frequency, but it is a good idea to have everyone on the same page with the same expectations, you work as a cohesive unit and everyone feels heard, particularly with things like ethics as they are a very personal thing.

 

After you have the core group assembled and you have worked out the nuts and bolts, a few more people ordering is a good idea as all the wholesalers have a minimum order value usually around the $500 mark. This is due to the low margins in wholesale, which are made up for in volume. Further, a lot of the items, are around the 20kg mark and you need a few families to distribute that many potatoes (or in our case rice). Ways around that are to order greens weekly and hard veg fortnightly, but doing it this way may make it difficult to order the minimum value required by most suppliers.

 

It also may be around this time you may want to start talking to suppliers, there are dozens of wholesalers around Australia, some of which are happy to deal with buyers’ groups and some that will require an ABN. This is mainly because it can be a lot more work to deal with people out of the industry and partly because they don’t want to be seen cutting the final link in the supply chain as the retail shops are their bread and butter; they order well and often.

 

Another thing to consider is how you want to distribute the goods. For some groups a fixed box of F&V works, for others, they would like to choose what they want. The choice here will determine the level of administration involved. The fixed box means everyone shares the cost of the orders, whereas those that want to choose what they get will need to split the cost fairly. If someone in your team is adept at spreadsheets you can knock something up. But if you want a piece of software then you can look into co-operative software. Around Queensland, most of the groups we are involved with, use Lettuceshare. While it has a little bit of a learning curve, it is very affordable ($2 per active member per month capped at $50) and covers the basic operations. This software is quite customisable with options for ordering times and frequency, accounts system, price markups to cover additional costs and even payment reconciliation (so you know who paid what).

Things to consider

A lot of people like the idea of spending less on food, but when it comes to doing the work, people are less keen (in the social sciences, this is called the free-rider principle). Lots of hands do indeed make for light work. If you can get everyone involved work should only average out to less than half an hour per week per month, when you consider you can save up to 20-30% on your food bill, then the work to reward ratio is defintitely there. But to many, money saved doesn’t not equal time lost; so we need to factor that in. For many groups, a handful of dedicated people do most of the heavy lifting. If this is going to be the case then adding a surcharge that can go towards subsidising those people that keep the group going. Everyone has different levels of commitment, and different life schedules, but breaking the roles of the group down into people’s different availabilities may help keep everything running smoothly.

The main jobs that need doing:

• Ordering from suppliers;

• Packing boxes;

• Entering orders into the system;

• Finance (making sure your suppliers get paid, and making sure group members pay their bills)

 Another thing to consider is to have money in the kitty to place your orders. The way we have seen this dealt with is to get a deposit from each member when they join; $50-100 from each member should do. And seeing as you only need that money in to cover each person for the ordering; when they leave, they get it back. The idea of this deposit is to ensure there is always money in the account so you can purchase from suppliers and allow the members of the group to pay after they pick up their box, and all the adjustments are made for things that didn’t turn up.

Let's break it down

Pros

• You get to support your ethics;

• Build a community;

• Save money;

• Save packaging;

• Save car trips

Cons

• A bit of work

• Less convenient for impulse buys or niche purchases (but once you have your group, you can do special buys);

• Working as a group can be tricky

While a buyers’ group can be a tricky thing to navigate, we have had experience with quite a few that have been going for 10 + years. The main thing they have in common is a dedicated community that is keen to see a change in the current system. The current system is one where the people growing our food are the ones under the most pressure to drop their costs, while CEOs and shareholders see the profits from their hard work. Buyers’ groups allow people to take control of their own supply chain and offer a chance to facilitate the change they want to see. With a dedicated group of people, you can make that change.

If you're a group that would like to buy in bulk, hit us up.