# CO-OP being contemplated



## Daniel (Aug 8, 2008)

For several reasons I have seen a need to change the structure of group buys. i would also like to see the line of goods offered at discount prices get increased. Not only would it be nice to have more products available, It would be easier for everyone involved to have them available on a full time basis.
In some ways this would even simplify things for those that run the current group buys. in some ways it can and most likely will complicate things.

I have contacted Jeff concerning the above thoughts, and basically what has come out of our brief conversation is exploring the possibility of organizing a I.A.P. CO-OP.

I have started looking into this and in the interest of furthering this effort I decided to start this thread.

In order to not get to lengthy, the nut shell of the idea is that the CO-OP would buy and sell the same items that are currently being offered here as group buys.
The main change is that the CO-OP would charge a mark up on the items. this profit would be used to.
1. purchase extra items to have on hand at all times for shipment.
2. expand the products the CO-OP has to offer.
3. address any business related expensis or losses.

Although there are many questions raised by this idea. many of them that are organizational etc are fairly easy to deal with. those that are business realted or of a legal nature are not so familiar to me.

I am looking for advice, suggestions or persoanl experiences with anything like this, definitly anything about where to look for how to set this up leglly both from a businesss view point as well as a tax viewpoint.

There are CO-OP's in existence so there must be some regulations as to how they are set up. But basically I am pretty clueless as to where to start.

of course all comments of any sort are welcome. remember this is your group. help make it what you want it to be.

Thanks to everyone in advance.


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## rjwolfe3 (Aug 8, 2008)

sounds interesting, but can't offer much in the way of advice


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## turned_for_good (Aug 8, 2008)

So what it sounds like to me is that you are going to open an IAP store and try and run the group buys out while charging us more for the product than what we would have normally paid to cover mic. expences.  Sounds great...


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## randyrls (Aug 8, 2008)

Daniel said:


> For several reasons I have seen a need to change the structure of group buys. i would also like to see the line of goods offered at discount prices get increased. Not only would it be nice to have more products available, It would be easier for everyone involved to have them available on a full time basis.



An interesting concept....  Could be a way to fund the expenses for the IAP...

One possible stumbling block is that most reseller contracts specify that you cannot resell from other suppliers.....  :frown:

I do know that several others started this way and in at least one case didn't start out that way....


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## Hayseedboy (Aug 8, 2008)

Though it sounds interesting I am cautiously optimistic.  There would be many business related issues with your idea.  Not the least of which is how would you warehouse, inventory and initially fund it.

Do you have a business plan?

Larry

p.s.  Man I hate to think seriously this early in the mornin'


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## toolcrazy (Aug 8, 2008)

The way I see it, is: Someone will run a for profit store and not get paid for their time. I'm sure Jeff doesn't have the time to run it, so who will? This will, also, cut into the profits of the wonderful suppliers that sell to all of us on a regular basis. Because to do this right, you would need to contact the manufactures direct in order to make the prices competitive or better than what the other suppliers sell them for. And as Rand S says, there are a lot of exclusive items that some of the suppliers sell, so why would they sell their exclusive items to another store. Just my thoughts.


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## DocStram (Aug 8, 2008)

Will you carry drill press stretchers????  

On a serious note ....... can you give us an example of how the CO-OP would work?  Just use a couple of items as examples, let's say .... Barons and drill bits.  And, include comparison prices of how much an item might cost if we did a group buy as opposed to a CO-OP.


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## Daniel (Aug 8, 2008)

Benjamin, mmmmmm no not reallly on most of what you said. Although it is pretty complicated i will try to enlighten just a bit.

First it will not run out the Bulk Buys since I am working with some of the people that are running the current bulk buys. The CO-OP would actually include the current Bulk Buys.

Second on a few items the price may actually go up. mainly the things that bulk buys are already being done for, (but not necessarily) with the added advantage that these products would be available for ordering and shipping at any time. even in some of these cases it might be possible to do this without changing the prices. Effort would be made to get to the original source of our products, This would make it possible for the CO-OP to purchase it lower prices. This would not be possible on all products though. Currently to keep products on hand has required the cash outlay for those products to be put up front by a single individual. this is not right in my mind. 

Finding products at there source generally means overseas. It also means rock bottom prices. conducting traditional bulk buys from overseas sources is extremely complicatedand in order for this method to become something that can be done on a regular basis some changes are required. Just F.Y.I. the few group buys I have done from overseas sources have been done when I have been on vacation from my regular job. There are not many people in this group that will be willing to do that. I will have in invested over 100 hours on the drill bit idea by the end of the week. According to what I get paid at my job, my time alone is worth more than 2200 dollars.  I and many others simply consider this a donation to this great group. But there is also a concern for what is the return for our donation. 
Simply there is far more being considered than what members pay for products. There is consideration for those conducting group buys. Being able to take advantage of other opportunities such as Dayacom and many others. and there is consideration for those that cannot take advantage of a group buy in the short period of time they are offered.
in addition there is consideration for the new member that was not even here to take advantage of them.

this issue is extremely complicated and I do not expect anything to be oganized or decided any time soon. For now I am seeking informatioin on details as to how it needs to be organized so that everyone has there butts covered.


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## Daniel (Aug 8, 2008)

Just a note, I am reading as fast as I can and will be replying asap. just letting yo know I have not gone anywhere.


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## Daniel (Aug 8, 2008)

Ok well thanks for all the interest in this. I will try to address shortly each post  above. If you would like more in depth in formation please feel freee to con tact me privatly. phone calls woudl be welcome if you really have a lot of questions lol.

So far I have not had any issues with reseller issues except when it comes to exclusive CSUSA kits from Dayacom and those cannot be bought by anyone anyway.

As far as warehousing. My thinking has been that the least changes the better. so those that are already managing group buys would simply continue what they are doing, making any adjustments necessary to there own program in order to meet the new structure of a CO-OP. Anyone wanting to open a new group buy iunder the Co-OP would need to realize they would have to meet the requirments for storage, inventory an managment of there part.

So far the organization of this includes only people that are already doing group buys, Although I am not ready to announce any names at this time. 
as far a s any "Business plan at this time. Mainly just general diractions i hope to give us guidance. as I said before the simpler the better. keeping things as much the way they already are is high on my priority but also meeting any other requirments must be done. I am looking to put together a core of 3 or maybe 4 people that already have experience with group buys to "Head up" the CO-OP. depeding on how large it grows it might need a network of people that actually manage individual parts of it as far as receiving and shipping orders as well as maintaining inventory. 

all of this raises massive complications in the way of creating, organizing, and checks and balances. creating accounts ofr each part fo the CO-OP is just one issue that needs a lot of discussion. how can you set up a pay pal account that all the people that need access to it have it.

I would like to see web pages created for ordering any items the CO-OP sells, who will create and maintain these pages.

Personally I do not think this group has that much of an impact on the overall sales for any suppliers. otherwise we would get a lot more attention from them. Other than that CO-OP's exist all across the country. and they struggle in the market just like everyone else. This idea is theis group using it's purchasing power to it's best advantage. i have never seen CSUSA try to start there own group in order to develope there own purchasing power. They simply do not need it.

The Co-Op cannot and even if it coudl likely woudl not provide everything a penturner coudl possibly want or need. it woudl still be much like the group buys currently are in being pretty hit and miss. concern CSUSA and other group buys they woudl very likely remain just as they are. The CO-OP as far as I am concerned is looking for far greater savings than are offered there.  This would not always be possible but it would be the goal.
Doc, I will address your question in my next post.
Thank you all for your comments questions and concerns.
and one other note: i have already mentioned all this to Jeff. Tentativly it is something he would like to have looked into. There is a ton of stuff yet unknown that will determin the outcome of this.


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## marcruby (Aug 8, 2008)

We already have a workable volunteer run method of running group purchases.  Someone wants to buy a enough of some things that it becomes worthwhile for them to put up with the hassle of collecting orders, negotiating with vendors, and shipping  the goods.  The period of involvement is limited, and the runner can reel off when it's over and paw through his goodies.  The good part about this is that there is no risk and minimal management requirements.

What you are proposing instead is really opening a store for IAP members (and remember, IAP membership is not difficult to get).  This means all the management hassles of running a business become a reality on a permanent basis.  It also will put you in competition with our regular vendors and I'm not sure they will appreciate having to drop their prices because of our effect on the market.

Every scenario I rehearse mentally winds up with a store that offers a limited amount of goods at decent, but not exceptional, prices.  And then we would still need to organize group purchases for everything else.

It makes more sense to me to simply charge a nominal surtax for the privilege of running a group purchase in the IAP site, like 1%, for the upkeep of the website.  It would have the same effect without any repercussions or limitations.

Marc


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## maxwell_smart007 (Aug 8, 2008)

I'm still a bit hazy on this.  Essentially, the advantage to this CO-OP that you're proposing would be that there would be less of a down-time in waiting for the kits as they would be held in storage somewhere, on-hand...right?  THe downside is that costs might go up, and it would be a logistical nightmare.  

Isn't this essentially what people like makaiolani and penworks already do?  If they decide NOT to join the co-op, they would be in direct competition with it, would they not?  I'm sure that they contribute to the IAP's operating costs, so I'm not sure what the advantage would be to it... 

Basically, it would be a perpetual group-buy that is affiliated directly with the IAP.  

As far as NEEDING a coop, I don't think that that is the case.  I'm not sure if it's wanted yet...time will tell...but I'm a bit leery about it...


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## Daniel (Aug 8, 2008)

here is an real life example of a group buy as well as how  a CO-OP would effect it.

there are many expences realted to a group buy that most people would never consider. in the event that a web site is created and maintanined there is the cost of hosting that page, there ore costs of having internet connection so that e-mail, orders, paypal accounts etc. can be maintained. there is the cost of various supplies such a printers and paper. (i estimate it costs 5 cents to print a shipping label), tape, packing materials and other various items. these will add up in time.
there is also the cost of lost or damaged items. as of now most group buys are organized to charge 8% over actual cost in order to cover these extra expensis. At least that is what I advice people to do. There are actualy other ways that this money can be accumulated but it starts to get complicated. let's just say that even current bulk buys must charge more than actual cost, and have been.

Pen Mills.
Currently the pen mill group buy has prices set for a 4 cutter head set at $11.97
Since this set can be bought from P.S.I. i want to beat this price by a precentage set by the organizers of the CO-OP. so lets say everyone agreed on 30%. I can mark up this price by 20% and still meet that goal of 30% savings to the group. making the new price $14.37.
So what happens to the extra $2.40. It is used to purchase additional cutter heads to be available full time for members to order. this means that for evey 5 sets ordered by the group in a group buy. 1 set can be ordered for inventory. In addition this money woudl be used to seek out and purchase new items such as acrylic pen stands, pen boxes, drill bit sets, pen kits and parts, glue, turning tools, chucks, vices, basically anything that can be found. this woudl be something that the entire group is relied on finding and bringing to the CO-OP's attention. 

I would like these numbers to actually be better, more like 1 to 1. for every set ordered the CO-OP coudl order one. After an adiquate supply has been built up there woud not longer be a need to organize a traditional pay before things are ordered group buy. and even further there would stop being a need to do the pay before it is ordered on anything.

In the case of Drill Bits I am seeing I can mark up the price 100% even and still offer a great savings. this would mean a full set of HSS bits would be priced at  $63.00 (less than $2.00 per bit)compaired to the next best source I can find at a price of $234.98 one stop shopping for the same bits. I can double the price of drill bits, be able to purchase sets to have in stock and still save the members of the group 75%. you can buy a set of bits from harbor freight, order a couple from P.S.I. a couple more from CSUSA and still a couple more from Berea, still be missing 3 bits and at a cost of about $150. More likely the average turner will put off buying that other pen kit cause they don't have the bit to make it anyway. 

The Ti coated sets have no comparison. an example of this would be that the only price i can find for a Ti coated 14mm bit is $105.00 and that is only 1 bit out of 35. My entire set looks like it will be offered for less than $80.00


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## maxwell_smart007 (Aug 8, 2008)

So would ALL of the extra money go to the IAP, or would it go into the pockets of the organizers of the Co-op...

I still don't see why people would pay extra so that the group-buy co-op could have extras on hand...doesn't make sense to me yet...

I think the purpose of a group buy is that everyone who contributes gets a good deal, and the organizer doesn't make any money, but covers his expenses...what you're proposing sounds like a business to me, with 'investors' who act as co-operators in a business...not really a group-buy at all, but rather an investment business.


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## marcruby (Aug 8, 2008)

You seem very focused on generating income.  Regardless of it's use, you are in danger of losing non-profit status.  So now you need a group of 'managers', and accountant, and maybe even a lawyer.  That's a lot of overhead for guys whose idea of fun is making sticks out of trees.

Marc


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## Daniel (Aug 8, 2008)

Marc, First I assume that you have never conducted a Group Buy, The reason for this is that the only people I hear say it is easy are those that have never done one. This is just one reason that only people that have conducted group buys (and a lot of them) should be in charge of it. 

I have witnessed time and time again that people will get involved in group buys even though doing the math shows it is actually costing them more for the itmes than ordering them themselves. i have time and time again pointed out to people in my own group buys that they could get a better price by ordering it directly themselves and they still choose to go through my group buy. so there is more to the reality than just the final price.
Finally this is not an issue to accrue funds for running the I.A.P at all. I want to make that perfectly clear because I do not want people comeing back later wondering how much money Jeff has gotten to pay bills a year from now. so that point is completely mute. 
Again this is not a way to raise money to run this group,

Likewise I do not agree that the issue is only "down time" it is about items that cannot be gotten with the current Bulk Buy methods. Dayacom kits woud be one example, even pen mills could be sold at a lower price if they where bought in larger quantities. Actual costs of getting items is better known. also frequency of group buys is getting to spread out int he face of quantities they must reach. In some cases ther is a demand for a next buy only in a year or more.

Here is an example of a group buy and what is involved in putting one together.
Item cost: from most suppliers this cost changes depending on how many are bought. this is true with nearly all suppliers. It is very difficlut to calculate a price without kowing the size of the order.
Shipping: this must be figured per item, So if I order 300 cutter heads I need to add the shipping it cost for each head. of course I don't know what that shipping charge is going to be or how many heads I will have until I actually place the order. so that is real easy to figure. 
postage: now just how much of what can I fit in a box. seriously folks I have psoted notices for a group buy and within 24 hours had e-mails asking how many heads will fit in a video box. the truth of the matter is I have no idea and have no way of getting one. I don't have a box full of these things laying around. If I did I wouldn't be doing a group buy.
finally how much will it cost to mail one head as apposed to 20, or 12, or 11 or you name it. nobody can be axpected to be prepeaired for evey posible compination.
then there is the added complication of those that want soenthign other than what is being offered in the group buy. Nobody orders the same thing. so not only do you have to keep track of every individual order, you have to keep track of the running total on each item, and don't get it wrong or you will nto be able to fill somebodies order. eating a 460.00 order because your a cutter head short will end your carer at bulk buys in a hurry.
Oh yeah keep in mind that while you figure all this out with no information. you want ti to be successful and on going. so that those that do eventually decide to step up can have a positive experience and not a disaster. 

so there are jut a few things that a new method woudl help simplify. and now you get to spend one two or even three evenings packing up individual orders and hauling them to the post office. all the while your spouce is giving you this look like that says "Why are you doing all this and get it out of my house"

yep just simple and easy way to get a few new goodies. Oh by the way, I don't have personal need of anything i do bulk buys for. so my box of goodies is at sombody elses house I guess???


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## Daniel (Aug 8, 2008)

Marc, the issue of being non profit is being considered anD is a concern. the pourpose of this thread is to seek in formation as to how to deal with those questions more than anything. it is not to decide if the group likes this idea or not, not intended to but if that is where it goes that is ok with me. but the decision about how group buys will be, will lie with those that do them. I would prefer that it remains connected to the I.A.P. but I am finding that the effort and expense out of my pocket to develop new group buys is becOme excessive. In the case of the drill bits, it will cost me $100 out of my pocket just to find out if the bits are good enough quality, and I don't even get any bits out of the deal, I don't need any. 
anouther issue is that in some cases purchase of a product could very well be a one time thing. I may put together a group buy for drill bits and never have the need to do anouther one. this is a lot of work for a one time shot. at best it might be a year or two before anouther one is needed and who knows if anyone would be willing to go to the extreme effort it takes.
In my thinking it would be much simpler at my end to be able to just get samples decide if the bits are a good deal. Which group buys have done for years. and decide to order and offer the sets. knowing what really needs to be charged for them and actually having sets to mail as the orders come in. I as the organizer have far more in formation that I can actually work with to make decisions than the current method offers. 
as it is now there is at least one person doing group buys that has (I think) about $1000 of there own money tied up constantly in keeping an inventory. 
So this thread is not so much a question of does anyone think this is a good idea. the poeple I have talked to that are doing bulk buys think it "could" be a good idea if it will work. I'm looking for information needed to try and make it work.


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## DocStram (Aug 8, 2008)

I, like many others, would like to see "more products made available" under groups buys. I also think that the idea of a CO-OP is worth investigating.  Daniel and others have raised some important points for our consideration. 

However, while we are in the very early stages of just discussing a CO-OP, I think  there are additional points to consider.

1. The commitment and integrity of those running the CO-OP.  Suppose Joe Blow is one of those in charge ...... he has a basement full of kits that belong to the CO-OP .... and Joe decides to blow town.  

2. A lawyer needs to be consulted right from "the get-go" to make certain that all involved are covered and protected.  Additionally, is it time for Jeff to incorporate IAP as a not for profit corporation?  An additional benefit would be tax deductible donations and the freedom from paying sales taxes.  

3. The need for a physical facility needs to be more carefully considered.  Assuming that those "already managing group buys would continue what they are doing" isn't going to cut it for those group buy leaders who use their kitchens as temporary warehouses.

There are lots of questions.  It doesn't mean that it is not worth pursuing.  Again, though, my biggest concern has to do with who runs the CO-OP and whether they're going to leave Dodge with our moola.


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## jeff (Aug 8, 2008)

Let me jump in and clarify a couple things...

First, I told Daniel that I thought this was an interesting idea as an alternative to a for-profit operation and I encouraged him to solicit help from experienced people and get general opinions. I have no real feeling either way - I endorse whatever is best for our members, and that's a very complex equation! (As others noted... Maybe it's "best" for members to support our existing for-profit suppliers...)

Second, I would not entertain the establishment of any financial link between a co-op and the site. We do just fine on existing donations, and I don't see a need to complicate matters.


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## Daniel (Aug 8, 2008)

Marc, I don't think I am looking so much for in formation regarding profit or non profit. Every person conducting a group buy at this time is living under a liability that comes with providing a service or good. most if not all are doing so completely un protected in any way. i don ot carry any sort of insurance and my success or failure relies highly on the nature of this group. I don not know any laws or regulatioins that I might fall under in regard to what i do, and have never cared to know. That very well may be foolish. I also believe that every other person that has done a group buy ist he same. so being better prepaired and in formed woudl very well be a good thing as well. 
What i think I am looking for is how to set up a CO-OP. they exist and I believe there are regulations that they need to meet. At this time I have no idea what those are.


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## Daniel (Aug 8, 2008)

Doc, I have had a few thoughts along the lines of your list. in tegrity and accountaility is a must. At this time I have contact only people that have conducted group buys for a long time and have established themselves as realiable and trustworthy according to this group. so there is no Joe Blow that will be in charge.
In fact I hope that there is no one person that has the power to do anything on there own. there are such things a dual signature accounts and things like that.

Money will be in volved, this actually introduces a whole new element that is potentially dangerous. and to be honest this one alone bothers me the most. there will be an account or accounts somewhere than will contain a lot of money at times.
this alone will require a lawyer in my opinon. It will not be the first time such a thing wa needed adn i am positive it can be done. the question is figuring out how and then is it worth it. jeeesh mesus hates money, such discusting stuff lol.

there are those that are currently doing group buys that one, there product simply would not fit into this plan, or those that operate them simply will not be willing to become a part of it. this is why I say that the final decision will be made by those that already do the buys. 
this effort would work best with items like pen kits from Dayacom that have to be ordered in 500 kits quantities, drill bits that need to be ordered in 100 set lots or 300 bits packages, Acrylic pen stands that never seem to be in stock so 10,000 of them could be ordered, it would be no big deal to wait two months for them to be delivered and them they would be available always, pen parts that are sold by the gross.


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## Daniel (Aug 8, 2008)

as Jeff mentioned, the Idea os a CO-OP is an alternative to simply charging a profit on my items in order to accomplish the same thing. The profits would be used by me to do the same thing but there woudl be "No" organization at all. This would be greatly simpler for me personally, but not nearly as good for the group. A Co-OP could answer a lot of problems, it could cause a lot more. In  perfect world I can set up a Co-Op that anyone that wants to protect themselves under can. But I don't know if it will actually work that way.


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## Gagler (Aug 8, 2008)

Daniel said:


> Currently the pen mill group buy has prices set for a 4 cutter head set at $11.97
> Since this set can be bought from P.S.I. i want to beat this price by a precentage set by the organizers of the CO-OP. so lets say everyone agreed on 30%. I can mark up this price by 20% and still meet that goal of 30% savings to the group. making the new price $14.37.
> So what happens to the extra $2.40. It is used to purchase additional cutter heads to be available full time for members to order. this means that for evey 5 sets ordered by the group in a group buy. 1 set can be ordered for inventory. In addition this money woudl be used to seek out and purchase new items such as acrylic pen stands, pen boxes, drill bit sets, pen kits and parts, glue, turning tools, chucks, vices, basically anything that can be found. this woudl be something that the entire group is relied on finding and bringing to the CO-OP's attention.
> 
> I would like these numbers to actually be better, more like 1 to 1. for every set ordered the CO-OP coudl order one.




Is there really an overwhelming need for the user population to have something like this readily available and kept in stock?

I'm all for saving a buck or two here and there, but what about the costs of maintaining this inventory?  Who is going to be the bookkeeper for this inventory?  You mentioned (I think) individuals would continue doing what they were doing with group buys.  Under this scenario, I'm picturing say a dozen people across the globe holding onto various IAP-specific inventory.  Does John or Jane Doe in {insert city name here} really want to keep on-the-shelf inventory, and be responsible for packaging and mailing boxes each and every day?  I don't think they would.

Is there something inherently wrong with the way the group buys are working presently?  In other associations I am a member, I personally see nothing wrong with the organizer of the group buy getting whatever "cut" or free product out of the deal if they are willing to take the time and effort of organizing the buy, ordering the product, sorting it out on the dining room table, and packaging and shipping everything to each person - as well as taking the responsibility for shortages.  That's the name of the bulk-buy game.

Many folks have mentioned the current vendors may step away if this proposed co-cop becomes direct competition.  I imagine they would, and they are also IMHO one of the many reasons that makes this site unique in that you can see lots of different product available you many not be able to find elsewhere online (or know where to start looking) or may not be available to you at the local Rockler or Woodcraft - or you may not have one of these stores available in your small town.  While I live in the Houston suburbs, wood stores or stores catering to penturning are a pain in the neck to get to from where I live.  My Dad, who lives in a small town, has to drive a couple of hours to find his penmaking supplies and relies on the vendors who participate in forums like this.

If it's a matter of IAP needing funds to keep the server, etc. going (there are operating costs), why not adopt a "member" and "contributor" system?  The vbulletin software supports it.  Members won't be allowed to post, say, classified ads, and "contributors" can.  Sawmill Creek has something similar.  I am sure many folks would contribute $5 - $10 bucks to the cause: I would.

My two cents-

Michael


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## railrider1920 (Aug 8, 2008)

Sounds like a decent idea.

 Something that came to mind, who can buy from it? Members of the IAP? What about that person that hears about the prices that might be available. He joins the IAP just to buy from the co-op. Possibly buying the supplies that are on hand. He has what he wants, the IAP gets their "cut", but when you or I go to buy those same exact items, we find that they are no longer in stock, but will be resupplied in 2 to 3 weeks. This would cause you or I to go and buy from PSI AS or whoever.

I'm not necessarily looking for a solution to this scenario, just something I figured I'd bring up, something that the co-op / IAP members might run into.


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## Mikey (Aug 8, 2008)

My take on this:

IAP doesn't need the money because of member donations and other organized fund raising. 

A "store" will still need to charge shipping and have a wait time for delivery. In addition, unless you are only buying one of any specific item and nothing else, you are more likely to save money at any given supplier based on quantity discounts. 

Why buy from the store at a markup when I can organize or participate in a group buy and get the same thing cheaper? 

If I organize a buy I know that my time will not be paid for. What I get is cheap stuff and a lot of times my shipping paid for and I don't pay Paypal fees. In exchange I spend a lot of time organizing the buy and making sure everyone gets the correct items. Sometimes the people screw up and send too many of something. This is a bonus that you cannot count on. (at least they don't ask you to return it most times)

I don't know where you came up with 8% additional cost or that it is more than buying direct. Perhaps if I needed to order 2 pen kits from CSUSA then yea, it would be cheaper going to them, unless they were $70 kits. With shipping rates as they are now, even ordering directly from a company will cost $8 or more in charges. Thay don't ding you for Paypal fees, but those are 3% A current buy i am running s charging the 3% plus shipping costs. The shipping is actually what you would pay from them. So you are getting the product for more than 25% off and giving up 3% in return. 

Why would I buy from you when I could pay less through a buy? The whole idea is to save the member money. if the member doesn't need to wait or cannot wait, we have the many distributors.

People already do this. We have them as members here. They take certain items that people like and make sure they stock the stuff. One person sells kit pens, ink, shaving brushes, and other stuff from his stock. Aomeone else sells CA glue. Another sells blanks made from special material in resin. Don't you harm their business by competing then?


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## Daniel (Aug 8, 2008)

Rob, there has been at least one suggestion that there be a fee to be amember fo the CO-OP. but nothing has really been descussed along that line, it is simply the only other comment I have heard along the line of your question. on the other hand in my thining it benefits the CO-OP  to sell it's products regardless of who they are sold to.

as far as there being a dozen people in a dozen locations holding inventory at any given point. That is what happens now. the only differnece is in how long that inventory is in there posession. in believe that in most cases those that run bulk buys keep extra on hand. it is one of the simplest wayss to deal with mistakes. i for one usualy don't but from time to time have some bits and pieces thrown in a drawer.

as for the demand, yes there is such a demand, I have never conducted a group buy that is not followed by months of e-mails asking if I have any left overs. the most recent was an e-mail just two weeks ago asking if I still had any pen mill cutter heads. It woudl be a huge boost in customer relations if I was able to say yes rather than sorry you will have to wait until who knows when the next group buy is done.
by then that parson has ordered it from P.S.I. at twice the cost.

Sorry if this sounds irritated but it really does get old to hear the same old "How we will hurt current vendors" line, it really is. I've heard that since I started the CA Bulk Buy. I've not seen one business fail in fact I see them cropping up left and right.
To address this issue I will say this. If there was not a market there would not be an opportunity to even do this. the market does exist. nobody involved has mentioned one concern as to wether it does or not. I do not think we are able to put anyone out of business. and history has proven me right.

AND AGAIN, YES IN ALL CAPS, THIS CO-OP IS NOT RELATED TO THE I.A.P.
IT DOES NOT BENEFIT HE I.A.P. NON OF THE MONEY WILL GO TO THE I.A.P.
any money that the CO-OP has will be used to support and expand the CO-OP.


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## Daniel (Aug 8, 2008)

Mike, I know you are doing a group buy for bottle stoppers right now. But I do not know how many group buys you have done in the past.
I have done them for years. does your pricing consider that your printer will one day need to be replaced? Do you even use it to print shipping, invoices or any other related things? Do your prices consider that you will need printer cartridges for that printer? does it pay for thepaper, tape, or any ohter packing marerials that you cannot get free from USPS. does it allow you to purchase other materials for shipping other than priority mailing? How many orders have you had lost in the mail? Do you replace these orders at your expense or does your pricing allow for lost orders to be relplaced? Do yo have to just tell your customer sorry you loose your money? how many of your items have been unatisfactory to your customer and you have issued a refund? and how often have you either mailed the wrong itmes or mailed an entire order to the wrong person? I have done all the above and more. I have had CA glue open while being handled by the post office and replaced it. I have had products be defective and replaced them. and i have never asked that anything be returned. If I make a mistake somebody just got free stuff. and as far as I know I have never had a permanently unhappy customer. that is why 8% is needed for a healthy repeatable ongoing group buy. I have read comments from people doing group buys mentioning how much it costs them in gas to run the packages to the post office. this is an obvious managment mistake. the group buy should be paying for that gas. my standerd is that no buy costs the person doing it one cent ever for any reason. and the first group buy I ever put together is still running strong. pretty much the way I set it up in the first place. not to mention a fine person that has kept it going. I think it is about 5 years old now.


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## Daniel (Aug 8, 2008)

The CO-OP is not ment for things like someone doing a group buy for CSUSA pen kits or even in Mikes case where he is trying to take advantage of a discount form a traditional supplier.

The CO-OP is intended to make it possible to buy items at far greater discount and in far larger quantities than are now being done. Without the need to take orders before hand. IN large this is items that are not even currently being offered do to them not working for the way group buys are being done. 
drill bits are one example, kits from dayacom are anouther, pen mills would fall into this catagory as well since demand has to be pretty high for there to be enough orders to make anouther one. there are also other things that will become available that require that large purchases be made from the supplier/ manufacturer. 

In a real life example I will have in vested around 100 hours of my time and $100 of my money checking out the drill bits. and I don't even know that I will do a group buy on them yet. IF I do it requires that I order at least 100 sets. getting 100 pre payed orders for sets will be a challenge alone but there would be no question that 100 sets would get sold say over the next year. not to mention what would be needed in the next year in the way of individual bits.
having to send people to other sources because they did not order during the one or two weeks the buy was opened directly harms my efforts and leaves the group buy an unrealiable source. But I cannot take from my own pocket to keep extra sets on hand, and under the current group buy rules I cannot charge extra in order to buy extra sets. thus the idea of a way to charge this extra have items on hand and be able to take advantage of new items that are not easy enough to really do a group buy for.


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## marcruby (Aug 8, 2008)

I don't believe I said anything of the sort.  What I said was that the person doing a group buy does so because he or she perceives benefits that outweigh the effort.  Since I've been associated with a number of enterprises I can honestly say I have some grasp of the complexity of mercantile efforts.  And that is really what you are proposing -- establishing a mercantile enterprise under the aegis of the IAP.  

What you are describing sounds very little like a co-op.  It certainly isn't to the benefit of the members, who can always organize a group buy and pay less.  Nor do I see how adding a lot of overhead and management it would benefit the IAP.  It might benefit held the post of manager, since they would gain control of a store with a preset audience with very little personal investment and nearly no risk.

As I recall 'co-ops' are based on a fixed 'subscription' which is put to use by a volunteer or minimally paid management team.  The gains of this unified buying power are then distributed to the subscribers for their use.  Distribution should theoretically be complete, i.e., no warehousing beyond immediate need, no purchasing on speculation, and no, I repeat no, earnings.  I'm not sure what you are describing is anything of the sort.

Marc



Daniel said:


> Marc, First I assume that you have never conducted a Group Buy, The reason for this is that the only people I hear say it is easy are those that have never done one.


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## Mikey (Aug 8, 2008)

Daniel said:


> Mike, I know you are doing a group buy for bottle stoppers right now. But I do not know how many group buys you have done in the past.
> 
> I've done group buys a handful of times with CSUSA and have bought direct from Berea here by me for members on a large number of occasions. I have also bought and sold Enduro and made a small little profit doing that as well. (although they screwed me on my discount) Have done a WPP blank and pen buy. Now doing the stoppers.
> 
> ...



From my perspective, the whole group buy this is designed to save the members the maximum amount of money possible This is why most of us don't take a cut of anything or charge extra for extra stuff. If I order 25 then i'd better get 25 to pass along. Anytime I have been shipped the wrong stuff it was made right in a hurry.I also don't have a problem spending my time or even a few dollars on supplies. Every dollar that a member saves can be spent on donations or other needs that member has. I know that while I may have spent $ this time, when i am in need of something another member will step up and help me out. We are a community here and I'd like to think we take care of each other.


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## Daniel (Aug 8, 2008)

Mike, You and I are simply not comparing apples to apples. You are talking about something that is done here and there as you have need for items or for other reasons that you are fine with loosing a dollar here and a nickle there. this of course is fine for a one or two time experience. i am talking about an ongoing month by month buy that even small losses would add up to big money over time. 
I actually started the oldest group buy on this group. that is the CA glue. It was started to support the Freedom Pen project. talk about a doozy to get going, that one has a ton of stories to go with it. i will say this much. i was offering super glue to nail salon technicians in order to get enough orders for the first buy. i think I had to join at least 6 completely un related groups. and was buried in e-mails telling about all the hungry and unemployed i was creating along the way. I think E-Z bond had a min order fo $125 at that time. If a business is going to go beelly up over my 125 dollar order I really dought I had much to do with it. A lot of it was really funny, at least today it is, but then it was really hard determined effort. Today nobody thinks twice about getting glue from the same place or has any dought that they will be happy. in fact few people ever wonder if they wiill be ripped off in a group buy. but back then it took weeks to get even a handful of people to take the risk. today I worry about our risk (the people doing the group buys) now there is a switch.


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## Mikey (Aug 8, 2008)

I know exactly what you are talking about. It's called a business. You use capital to leverage buying power. You then sell the products at a profit and re-invest. At least this is exactly what you seem to be describing.

Your $125 analogy is nothing compared to what you described a few posts back. To leverage your purchasing power you'll need to invest thousands in just a product or two. I suppose it could work with odd items like pen mills or other things where a buy wouldn't happen frequently. Maybe have a cash reserve set aside for the rare authentic mammoth ivory find or something like that. It still sounds like an actual business though. 

Only way I would see wanting to get involved is if through my work I am eligible to buy the products at actual cost. otherwise I may as well just work 12 hours a day at my regular job. I'd get paid the same but the boss would be happier.


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## Daniel (Aug 8, 2008)

somebody please explaint to me why eveyone seems to think this is under the IAP??
it is simply on the IAP, Group Buys are not conducted by the IAP. This idea is no more connected to it than group buys are. This Idea does not require that group buys become like it either. This is a NEW Idea that will provide NEW products at NEW Prices. and maybe some of the old stuff at new prices. 
group buys from places like CSUSA would not work for this idea. there is not nearly enough discount. Discounts I am talking about are more like 27 cents as apposed to $3.99 a 20% discount dousn't cut it. so call it what you want I call it savings, and I see it as the biggest avings that can be gotten, but it carries some pretty heavy requirments like buying 500 of them minimum. has a huge unknown shipping charge. is completely untraditional in jsut about every way.
the biggest problem with ordering 500 of these itmes is getting 500 orders for them right now in a reasonable amount of time for a group buy, even if I do that I am then strapped with packaging and mailing 300 to 500 packages in one stretch. 
in short the numbers in every way are getting out of line for something that is voluntary.
I'm thinking that a change in structure of how things are done will also make a change in peoples willingness to take some of these on. But if I have to take money out of my pocket to make it happen, i will charge a profit. if the money comes from this group, it will benefit this group in lower prices and better availability, and better selection. as is I cannot ask the group to pay anythign extra in a group buy and still call it a group buy, so i'm calling it something else, I'm not real concerned about what it is in fact. that is just a name. 
my experience with CO-Op's has been from Kansas where they have farming CO-OPs to me they looking like any other farm supply store in town only they sold there stuff for next to nothing in comparison. by the way no privately owned farm supply went out of buisness as far as i know, not because of the CO-OP anyway. you had to pay to buy there so most small time farmers didn't bother.
Gotta go folks will be back in the morning if not later.
thanks for all the thoughts.


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## maxwell_smart007 (Aug 8, 2008)

Daniel, I think the confusion occurred when you referred to it as:
"I have contacted Jeff concerning the above thoughts, and basically what has come out of our brief conversation is exploring the possibility of organizing a I.A.P. CO-OP."

That, to me, implied that it is 'under the IAP'...my mistake...


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## DocStram (Aug 8, 2008)

*CO-OP*

I'm with Andrew.  When you wrote:  "I have contacted Jeff concerning the above thoughts, and basically what has come out of our brief conversation is exploring the possibility of organizing a I.A.P. CO-OP."    I could only assume that the CO-OP would be an IAP CO-OP.  


I guess I'm more troubled by the following .....



maxwell_smart007 said:


> AND AGAIN, YES IN ALL CAPS, THIS CO-OP IS NOT RELATED TO THE I.A.P.
> IT DOES NOT BENEFIT HE I.A.P. NON OF THE MONEY WILL GO TO THE I.A.P.
> any money that the CO-OP has will be used to support and expand the CO-OP.



This whole thing raises a concern that I've had for quite some time now. While many of us perceive IAP as a community of penturners ..... a "family" comprised of members from very diverse backgrounds but all sharing a passion for penturning and penmaking ..... there are others who view IAP as an opportunity to financially profit from our camaraderie.  I might be wrong but it seems to me that this CO-OP idea seems to be a code word for "profit making business".  

I'll stick with the group buys .... unless there is some way that a CO-OP would sell supplies at the same price as a group buy while financially benefiting IAP.


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## Daniel (Aug 8, 2008)

My bad, so take the IAP off there. I do plan to conduct it here so that was my reason for adding the IAP there. But this will not be making money to run IAP.
By the way I think we have an attourney that will give us some advice on all of this so the entire idea is likely to take on some drastic changes or even be scrapped pending what the attourney has to say.
I do know that the Freedom Pen project (FPP) filed for tax exempt non profit status and it took them 5 years or more to get it done. I won't be getting anything started that is that complicated.
I'm gonna spend the est of my evening drooling over reeeeeallly nice classic cars. It is Hot August Nights here in reno this week and I havn't been out to see the cars yet. i actully like to find the bands more than the cars but then nobody ever accused me of being normal. can anyone say "The Beach Boys" yeah they are in town. Last year I found a band and ended up back stage with them getting taught licks on the guitar by there lead guitarist. And no I cannot be out there selling pens  anything sold in this town this week has to be liscensed with them. never bothered to even try I would rather be playing.
By the way everyone. have a great weekend.


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## cozee (Aug 8, 2008)

LOL!! Me thinks me smells something funny!!!!!!!


I'll stick with group buys. Well, that is until the CO-OP comes into to existence and takes control of them!!!!!


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## turff49 (Aug 9, 2008)

I see some problems here. Keeping inventory is not a good thing. All areas of the nation have natural disasters. Just like with Johnnycnc he lost everything. There are tornadoes, hurricanes, floods, etc. If one of these events hits one of the "co-op members" holding the inventory then that inventory would be lost. Now you could say the same thing could happen with a group buy but the time holding the items aren't the same so the chances are slim. Losing inventory would cost the CO-OP. What about flaws on an item that aren't seen with the item just sitting in inventory. Most vendors won't hold a guarantee forever. And you ARE talking about items that aren't sold every week. Pen kits from CSUSA and the woodcraft group buys which generate the most common items wouldn't be in the CO-OP. I've already seen one capital venture on here conducted by a member go south and right now members who bought into it are just out their money. Your description of what you want to do isn't a co-op either, it is a for profit business venture regardless if you use the profit to purchase additional inventory. The inventory alone is an asset that has to be accounted for since it's not been sold. Now you have the whole IRS thing to deal with at that point. Daniel, your intentions are good on the surface but I think the Hot Dry Air of Reno have gotten to you. I personally see this venture as a disaster waiting to happen. From a business standpoint holding inventory on items you sell on a regular basis is fine, because the inventory constantly turns over, but on items like drill bits, pepper mills, etc, you could be holding onto the SAME inventory litterally for years since you would have to purchase in such large bulk. Even pen kits with the plating issues could create havoc. I think you need to explain how these issues would be handled since anyone who ventured into the co-op would be an investor.


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## hilltopper46 (Aug 9, 2008)

*Not to be a downer, but my 'vote' is no...*

I have run a group buy (only one).  When I ran it, I was able to 'pay back' some of those who I had profited from for running prior group buys plus I got the blanks (acrylester) that I wanted to stock up on for a lower price.  Two things that appealed to me.  I think that is the appeal of group buys, there is something in it for everybody.

I could go on for some time, but in a nut shell, I am against this idea (the co-op).  I strongly think that it will/would fail.  It might succeed for the first 2 to 6 months, but after a time it wouldn't stock what some person wanted and there would be interminable discussion as to why some persons favorite pen kit doesn't generate enough volume to be stocked and the person who ran the co-op would be accused of stocking only what he/she uses in their shop and, and, and...


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## Daniel (Aug 9, 2008)

Tony, First you sort of refer to something that is not true so I want to correct it. this is not somethign that would be ran by group consinces. As it is group buys are ran for what items are chosen by the person running them. so there is nothing new there. CO-Op buys would be the same.
The only difference in a group buy and a group buy for me is that the coop buy will charge a mark up in order to buy extra items to keep on hand. the first buy would have to be up front money like a group buy is. after that replacment products could be ordered as supply runs out.
The problems with this idea are many as is pointed out by this thread alone. 
simply organizing even a small group to work together to oversee the program. this alone creats expensis in order to even start to make it work. it woudl require that the people running it coudl cal each other as conversing by e-mail is not adiquate. it requires that those people make the commitment to be available to address issues.
just a few are accountability for money because now actual cash flow and holding funds for a long time becomes involved.
It requires managment of inventory as well as decisions about what will and will nto be purchased in the first place.
It requires protecting those involved from liability both personally and due to taxes on anything that is considered income. By the way this was mentioned in a post above. In the state of Nevada inventory is not taxed.
The problems reaches as far as what happens when someone wants to stop running a buy. It will happen. what about laws from state to state, what about laws form country to country.
personally I think this all gets way beyond "Volunteer" levels. But I don't make my decisions based upon what I think. i will give it my best shot and then have reality how me what is or is not possible.
The more complicated this gets the more expensis that get added. expensis  cause the bottom line price on goods to go up. since the whole idea is to get goods at the lowest price possible while still maintaining or even increasing quality. complications are a bad thing.

As far as the people that choose to do a group buy here and there for whatever reason they make that decision. this idea will not effect them. there are those that are doing group buys that "Like" the idea and might even move there group buys into this program if it actually does get off the ground. all of that is simply up to those people doing a group buy and if they think it is.
The truth is comments like the coop taking over or puching out group buys are simply ignored by me. It only shows me you are not willing to give this enough time and thought to even understand what I am talking about. That most simply want the savings with outgiving anything for it. ory but htose opinioins simply do not carry much qulification for me.
I have been doing group buys for a very long time. I have seen what is bought through group buys and i often do the math when I see one. in many cases people seem to get involved on the assumption they are saving anything when in fact they are not. in some cases they actually end up paying more. I know of people that will choose to buy through a group buy knowing they are paying more.


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## LanceD (Aug 9, 2008)

One scenario

I can see that you will have a nice inventory on hand. Kits, bits blanks etc sitting in a few boxes in your house or garage and everything has it's price.

Well someone says I can get these same items at an even lower price by starting up a group buy. He starts a thread advertising his buy and everyone jumps in because the group buy prices are lower than the co ops prices. He purchases his products and distributes them the same as always in two or three weeks and everyone is happy because they bought their supplies and saved a good bit of money. The items purchased to start the co op is still sitting there in boxes with no one interested in purchasing them because the group buy items were cheaper than the co op items.


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## cozee (Aug 9, 2008)

> The truth is comments like the coop taking over or puching out group buys are simply ignored by me. It only shows me you are not willing to give this enough time and thought to even understand what I am talking about.



Perhaps, if you attempted to tell us what exactly you are talking about, then perhaps you might find people better understanding you. However, even though you see it you choose to ignore what the majority of people want. . . . 



> That most simply want the savings with outgiving anything for it. ory but htose opinioins simply do not carry much qulification for me.



DUH!! No wonder people do not listen to you. You are trying to get us to take a hold of something we do not want. Plain and simple. And your attitude of our opinions, because they do not line up with yours, does nothing more than turn people away. I don't think it can get much clearer than what the majority has already made clear. They do not want a CO-OP.


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## Daniel (Aug 9, 2008)

Here is my opinion on this. i am asking the group to do there part in making these big China deals more managble for me. Period.
that part is accepting that I will double the cost of the products in order to buy additional products. this way I do not have to do the group buy thing and can still provide products at really low prices 50-90% savings.

in trying to figure out how to do this I run into several conflicts.
the first is that a group buy cannot charge a mark up of any kind for any reason.
My idea still needs to be ran like a bulk buy (money being sent up front) in order to get off the ground. after the first buy it would be ran more like a business looks with the buying and selling going on behind the scenes not in a thread like group buys do.

well both of those factors bring up the questioin of how does anyone but me really know what is going on with all that money. so new problems.

so fine I do all this to do a one shot you are either here or not to get in on it bulk buy (which I am really getting tired of telling people after the fact sorry).

Of course there are new problems with this bulk buy thing. anouther one will not be done until there are enough orders to meet the min order from the supplier. in this case 100 sets of bits or 300-500 individual bits. even if the 500 individual bit requirment was met the shipping on those bits will destroy the savings on them. so the order really needs to be the size to weigh 100 to 120 lbs. that is a huge number of drill bits (and orders to process). this demand may not accure for anouther year or more. in the mean time every penturners is still rellying on the old broken methods of getting drill bits, complaining about the cost of having to get this bit or that and once in a great while someone mentions this group buy that was done once. maybe anouther one needs to be done.

I really doubt that anyone has thought of this. How many new turners are there right now on this group that even need a brand new full set of bits? How many of you need one at any price? I think that most of you have already figured out how to get the ones you need and if i started right now and sold full sets to only new turners for the next three months I might be lucky and get 100 sets sold. and a year from now when it is time to do anouther regular bulk buy I would still be faced with the same handicap. i like the idea of being able to offer every new turner that comes into this group a full set of bits as they come in.

as far as I know you can't compare what i am offering in this one buy to anything because you can't find it anywhere else.

OK so fine the group does not like there being a profit. So i accept that all my effort will only result in so much and do a one time group buy anyway. now I have to solicite at least 100 orders for full sets in a one time stretch which results in weeks of effort and managment rather than a few minutes here and a few minutes there. it also requires that when the bits arrive, my house is overran with the affort to sort inventory, pick orders, package, and mail them. this does not take a couple of hours, at best it takes a couple of days. my effort to do a group buy has evolved from a few minutes each night or a couple of hours in the evening to mail orders. to money out of my pocket, weeks of organizing, and days of shipping packages. But the group does not want anything to change. i want to do group buys, but not bad enough to keep doing them they way they are going. My wife and family alone will not put up with it. The last group buy I did my wife flat out said, if this is the way it is going to be you need to be making money from it, period. and she is serious as a heart attack about it. she will not let the group buys effect the household and the family the way they do without there being some benefit for it.

for me it is either make changes that work better or give up the chance at these deals. 
So anyone have a better idea than a CO-OP?

So everyone knows just what sort of deal I am talking about when it comes to drill bits. a full set of TiN bits (35 bits) for $77.00 to your door. that is barely over $2.00 a bit and includes all the over half inch bits. a 14mm TI bit from MSC alone costs $105.00. Just one bit out of the set costs more than the entire set. I cannot find complete set of Ti bits anywhere for any price. MSC doesn't list Ti bits over 1/2 inch in there catalog. to get just HSS bits in all these sizes would cost about $250.00.

My wife has agreed to this buy as a compromise to the problems we have here with them. it will mean a one last ime processing 50 orders, which she is not happy about, but will then be a day to day effort that will not disrupt the entire house.

There is no question that my efforts to offer this group better prices on products will change, it will change to work better for me and my family or it will end, either way is a change. I would rather it did not end.


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## flcad2000 (Aug 9, 2008)

Daniel
   Your idea is interesting, but I think it would more complicated than it is worth. The way I understand your proposal, is that multiple members of the CO-OP would organize a Large (as compared to a Group) Buy for different items that they find interesting and that there seems to be a demand for, i.e. pen mill cutter heads by you. The prices will be a little higher, I believe you  mentioned 8%, than the Group Buy was, but with the extra money they will keep on hand some extra cutter heads, so that someone can buy a few, 10 or 12 weeks later, and not have to wait for another Group Buy.  This would mean a price of (I don't remember the prices, so I'm going to make up some numbers, OK) $1.10 from the CO-OP compared to $1.00 for the Group Buy and $3.99 from some online source. (Close enough?)
   What happens when you run out of cutter heads? If the minimum order is 500 units, that is what you will have to order. Where is that money coming from? Unless your initial sales and purchase was like 6,250 cutter heads, there will not be enough extra to buy the minimum order. That is also assuming that none of the extra money went to pay for gas labels, printing, etc...
   Also, since multiple members are doing this, for different items, I can see where I would need to order 1 or 2 items each from 5 different members.  Now I will be saving quite a bit of money by ordering from the CO-OP, but what about the shipping and handling?  There would be a point where it would be easier, quicker, and maybe cheaper, just to order from, say, PSI.  
   That happens now. We can all find some of stuff sold by CSUSA or PSI, a little cheaper on other web sites, but sometimes it is just not worth the bother of ordering 2 items each from 8 different places - and sometimes it might be. I just don't think it would be often enough for the CO-OP. 
    I will stick to the Group Buys. I have missed out on a lot, because I didn't see one, or have the cash, etc... I did participate in the pen mill buy ou ran (Thank you very much.) but, how often will I be ordering new cutter heads?

Good Luck with it, anyway.


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## turff49 (Aug 9, 2008)

Then do it like you did the walnut buy. Either put up all the cash and sell the sets at a profit or get a few investors and divy up the sets. Each to do what they want with the sets. If you can offer them at such a great savings then you could make some profit. Offer them on ebay also. It really sounds like you are burnt out on doing group buys.Which you have a right to be. Pass the torch for awhile and let others do them. It sounds like you really like doing them, but have found that it really is taking up time the family wants and needs. So it's come down to I need to be paid for my time and expenses. When you get to this point you have gone from volunteering to I'm burnt out. That's normal.
As for your vision on all this as a co-op. You are basing things on volumes you see in the group buys. It won't be the same in a Co-op. A lot of people, me included, buy in the group buys just in case I may need those. I've got more drill bits, kits, and pen blanks than I'll ever have time to turn. I'm sure a lot of members are in the same boat. When it's an all volunteer buy then we tend to help out to meet the required # for the best savings. I'm not sure that would happen with what we know are inflated prices, even if they are cheaper than retail. Then there you are stuck with inventory. Things like CA glue or Enduro couldn't be kept in inventory for too long due to shelf life. So, we take most pen kits, CA glue, and finishes off the list of items the CO-OP would purchase, what does that really leave? Just more thoughts for you to ponder over before you try and make this work.


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## Jarheaded (Aug 9, 2008)

LanceD said:


> One scenario
> 
> I can see that you will have a nice inventory on hand. Kits, bits blanks etc sitting in a few boxes in your house or garage and everything has it's price.
> 
> Well someone says I can get these same items at an even lower price by starting up a group buy. He starts a thread advertising his buy and everyone jumps in because the group buy prices are lower than the co ops prices. He purchases his products and distributes them the same as always in two or three weeks and everyone is happy because they bought their supplies and saved a good bit of money. The items purchased to start the co op is still sitting there in boxes with no one interested in purchasing them because the group buy items were cheaper than the co op items.




And that would mean that if I wanted a few of the items at a better price, I would be forced to wait for someone to maybe do a group buy on that particular item or pay the full price for it instead of buying it at a savings from the co-op. I am all for this idea, it won't be hurting any of the vendors we use now, but if that was the case, maybe we should do away with group buys so the vendors can make a higher profit.


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## Mikey (Aug 9, 2008)

We generally do group buys THROUGH the vendors so they still make their cut and stay in business. Kauri, CSUSA kits, Berea kits, Acrylic blanks and so on have generally all gone through the actual vendor that we would normally buy from. The difference is that we pool our money to get a better discount. If we order direct through the mfg we become importers in most cases and eliminate the normal vendor all together. While I doubt that the $$ they wouldn't get from a group buy month after month may not hurt them short term, over the long haul there is a lot of $$$ not going into their business and the business might not be coming out with as many new products. This eventually hurts all of us. 

However, if the minimums are small enough for orders of items not normally ordered in group buys then it may pay offin the long run. I'm not sure anyone would want to invest their time for such a long duration for no pay.


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## Daniel (Aug 9, 2008)

I've had several ideas about how to deal with this. one is the way I did the walnut.
ont he walnut idea specifically, that was the single worst bulk buy I have ever done in some ways. in some part it was due to things that are specific to that situation, and would not apply to getting in vestors to buy the bits. one difference that does matter is the amount of money. for tha walnut I was asking for 5 investors at $120 each. in this case I would need 5 investors at over $1000 each. Just off the top of my head I am thinking this is unlikely.


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## marcruby (Aug 9, 2008)

I'm confused.  I can drive 2 miles and buy a set of 115 TiN bits for about 80.00.  For a few bucks more I can add the over 1/2 bits that I need.  And thats undiscounted and over the counter.  Since I drill wood and plastic and don't need hyper accuracy, that's 3 times what you're offering for about 30% more.  One of the points you're missing is that you simply won't have the buying power a commercial supply chain has.



Daniel said:


> So everyone knows just what sort of deal I am talking about when it comes to drill bits. a full set of TiN bits (35 bits) for $77.00 to your door. that is barely over $2.00 a bit and includes all the over half inch bits. a 14mm TI bit from MSC alone costs $105.00. Just one bit out of the set costs more than the entire set. I cannot find complete set of Ti bits anywhere for any price. MSC doesn't list Ti bits over 1/2 inch in there catalog. to get just HSS bits in all these sizes would cost about $250.00.


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## DocStram (Aug 9, 2008)

Not only have you confused us by first giving the impression that this would be an "IAP CO-OP"   ("I have contacted Jeff concerning the above thoughts, and basically what has come out of our brief conversation is exploring the possibility of organizing a I.A.P. CO-OP.") ..........

but now, as it turns out, this wouldn't be a CO-OP at all.  The fact of the matter is that you are interested in lining up partners in the hopes of bankrolling a profit making business.  

There's a big difference between a profit making business and a CO-OP.  Unfortunately, I see it as another example of certain members wanting to profiteer from our "IAP family".  I guess that's how capitalism works.

As for me ..... I'll stick with the everyday Joe IAP member who, out of the goodness of his heart and true desire for helping fellow IAP members, decides to run a group buy for the benefit of all .... not just a few. Get it?


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## Texatdurango (Aug 9, 2008)

Daniel,

I just read a few posts in this thread and skimmed through most of the others so excuse me if I am missing something here but here are my thoughts.......

I think there is no need for a CO-OP, as described in this thread for pen supply purchases.

I also think you are starting to take things too personal when someone says something against the CO-OP idea.

I've done several group buys and know what's involved, one last year exceeded $7,000, so please don't go there with me as you have with others.

I guess we all look at group buys differently and I have never made a nickel from the buys I have done and have actually lost a few dollars now and then due to unexpected postage, etc but NEVER did I consider fellow forum members and friends as "Customers" of mine and never thought about how much toner I used in printing out mailing labels or what the gas cost driving to the post office!  It's not a business to me and I never thought of these buys as ways to make money but I do see a growing trend on the forum where others do see them as ways of making a few bucks.

It sounds to me like this CO-OP is just a way to make some money by one or a few!  If I want to save 25% off retail on a pen kit, I'll contact a few friends, order 100+ kits and ship their portions to them while charging them the kit prices, actual postage and paypal fees.  It's as simple as that, doesn't need to be VERY COMPLICATED as you have mentioned in several of your posts.  

If the mere concept is so very complicated and difficult to explain, just imaging how complicated it will be to actually get rolling!

I don't see where a CO-OP saves anyone anything and don't see a need for one.  Just my opinion....... don't take this so personal.

As for me, if I run low on a particular item and want to save on ordering some more, I'll just start a thread saying "Group buy" and be done with it!

George


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## Daniel (Aug 9, 2008)

Tom, I had to paste your comment in my reply field just so i can adress everythign you mention. So this reply is going item by item down you comment.

as far as some of thiese things are concerend including cutter heads they are already getting to complicated to deal with. this is the whole reason I started thinking of other ways to do buys at all.

you ,mention numbers like 8% markup, CO-OP $1.10, Bulk Buy $1.00 and vendors $3.99

8% mark up is what a current on going bulk buy has to add to orders to make up for ongoing expenses that accour. the CO-OP would mark product cost up more like 100%

final numbers in this case is that the Co-Op coudl do this and still offer prices at $1.10 while group buys do not even offer the item and vendors charge anywhere from $2.20 to $90.90 for the same item depending on what it is. 
The mark up the Co-Op woudl charge would be determined by what price a product can be bought at and what is a good deal for that product. 

I think the CO-OP could compete directly with Bulk Buys on some items (Pen Kits and acrylic blanks) and provide them at even a lower price than group buys do. But I would not want to see this happen if it ment stepping on anyones toes. Consideration of others is sort of a standard around here and I would expect that to be one thing that determined the decisions of the CO-OP.

ONly the first buy in a CO-OP ould be structured like a group buy. with moey being payed up front for goods promised. after that it woudl be expected to "Hoe it own roe" so to speak.

In some real life numbers. i do a buy for drill bits for the price of $77.00 for a full set of Ti bits. i must actually collect 50 orders at this price. i will then place an order for 100 sets. i wil mail all prepayed orders and keep the other 50 sets to sell over time at the same $77.00 price that everyone else bought them at. excet now all cost of the buy have been paid. every set I sell from now on is money staying in my pay pal account. when those sets are sold i have $3,350 in my pay pal account and need to order 100 more sets. so I do but this time when all 100 sets sell I have $7,700 in my pay pal account. I order 100 more sets and can order some new stuff. well during this time I've had people asking me if there are other sizes of bits they can get, can they get jsut a couple of 7mm bits to keep around or whatever, well now not only do I have ome extra money I have some Idea of what to do with it. In the mean time I have someone e-mail me about ink refils that are really good but you have to buy a bunch of them at one time. so maybe the CO-OP will take this idea and run with it.
in each case every time the CO-OP buys and sells an item it doubles it's money (only in a perfect world) and is able to buy other things that are brought to it's attention as this money grows.

for now there coudl actually be a large amount of money that could be used in getting various items. if this idea does get started this list will grow even larger. but eventually there will be no need to double the money of the CO-OP and adjustments will need to be made. I woudl hope that it could eventually be  more like a 10 or 15% mark up on a lot of item but there is no way of really knowing that at this time. this also causes a problem for people that pay $77.00 today for a set of bits when there are people only paying $45.00 for a set two years from now. The only thing I can really say about that is it is part of the cost of helping the group do new things. i wanted to say bigger and better but in fairness what is better is a matter of opinion.
The above does not consoder other expensis and so is not a literal description but as can be seen the fewer other expensis there are the greater the benefit to the group in the way of new items being found bought and offered for sale.

In regard to having to shop from multiple sources. the way group buys are now you can only get the price break if there is a group buy going on when you need to buy and for the items you need to buy. this situation will not be mcuh of a challenge to improve on. There a re several way that actually orering could be handled. Right off the tip of my head I like a web site that to you look like just any other web site that you buy from. behind the scenes the orders are being sent to the various accounts and people they need to. the biggest difference to you woudl be when you start getting multiple packages delivered for what seemed like one order. this is something people would simply become used to. this is not the only way to deal with this just one idea.
as far as prices. I like to setprices that include everything. it is simpler for the customer. So I would like to see prices that have nothing added to them so you know what you will pay and in actuallity would not really care what bills had to get paid to get the items to your door. 
as far as beating anyones price. For the specific items i am looking at now this is a non issue. nobody even offers some fo htese items and even if they did it woudl be very hard to bet the price. maybe if I mailed each bit to you individually and even then I think you could save money in that case. of course there is always that one exception. I tell people when I know they can get a better deal. and in some cases this will be true. not every combinatioin of products can be figured. this is up to the person buying


On this issue I will first say you are welcome for the group buy on pen mills, and thank you for being a part of it.
You point out one fo the single biggest issues for me in this whole thing. How soon will you want to buy anouther cutter head? Hopefully never I like to think i provided you with that good fo a product. But since this is not likely, i know I have owned mine for a couple of years and not planning to need to replace it yet. I did buy a bunch of heads during my group buy but that was more to pamper myself than any real need.
But how many other people do need heads or sets. but because almaost every member that wanted or needed cutter heads did order them. those that are still in need are sort fo left out in the cold for a while. maybe even quite a while. this kills group buys as a realiable source of any kind and also fails to fullfill the very base reason for a group buy. to provide low prices on products. when a group buy is not offering anythign to anyone 50 weeks out of the year sorry but my vote is that it is not doing what it is supposed to be doing for 96% of the time. This may not mtter to anyone but me but it does matter to me. i managed to meet your need on that one item, But I also want to meet the need for the next person and the next after that.
on that note bulk buys miserably fail.

thanks for your post.


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## Daniel (Aug 9, 2008)

well due to comments like Docs above, not the only ones I am ending this thread and will request that it be locked. I don't need to be insulted by the very people I am trying to do things for.
thanks for the comments that where actually questions and concerns.


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## DocStram (Aug 9, 2008)

It's my understanding that a CO-OP is formed by a group of consumers with the sole purpose being to benefit those consumers.  Any profits from the CO-OP are used to benefit the group of consumers who are also the members. 

What you're describing as a "CO-OP" is actually a business venture in which you are seeking partners who will financially benefit from those of us who are your customers. 

The way I see it, a "CO-OP" and your business venture are two different things.  When I read your first post yesterday I was excited by the idea of ALL of us IAP members somehow forming a true CO-OP and using our joint buying power for ALL of us to benefit equally.  

There is no need to be insulted by my statements. I'm simply trying to help sort this thing out so we are all on the same page.


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## sdemars (Aug 9, 2008)

Well I am a newbie lurker to this group and have not turned the first pen, but I have been involved in retail, wholesale & purchasing . . . .

Let me save you some time and effort & bring you into the real world for a moment that is not supposed to exist . . . 

First off, as soon as you become a competitor and cost one dime by any means or method with people who have invested millions into being a "TURNING" supplier you will learn about something called pricing structures. Meaning you will be at the crappy end . . 

Example: 

Frank has built a small business cutting and selling pen blanks. After doing so for several years & selling everything he could by way of mouth to individuals, one day his phone rang & it was PENNSTATE & they told him they would buy ALL his blanks at a price they negotiated. Do you really think Frank is going to risk angering PENNSTATE to sell to you at a price low enough to compete with his best customer & lose that $3,000.00 check that has been coming in for the last 2 years. In case you don't know the answer to that, it will be NO!!!

I use Pennstate strictly as an example . . .

Another thing to consider, there are very few hobbies that allow you to actually turn a profit. There are even fewer hobbies that have dedicated solid suppliers as this hobby does. The day you take the even the smallest portion of marginal profit out of carrying pen supplies these big boys will simply drop pen supplies and move on. Now we are stuck with you who has no buying power. You see, in this country ever time someone build a profitable business there is always some "sharp" shooter that wants to come along and grab the gravy. Well my friend capitalism is older than you & any time you try to turn a profit under the guise of helping others you will always be shot down.

If you truly want to help IAP, then simply buy at the group buy discount and offer for @ list to members. Then the profit could be put into the coffers of IAP. But I can assure you, no retailer will allow you to buy from him @ a discount and sell to his customer base @ a lower price then he has deemed necessary to make a profit and continue to operate. Do you really expect a supplier to swallow the cost of maintaining a purchasing department, a warehouse & a sales staff so that he can sell to you at a price low enough for you to RESELL for the same or less than him . . . .? If he were that stupid he would not have a successful business . . . . 

I could go on, but I'm sure you would not appreciate it . . . .

Steve


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## jeff (Aug 9, 2008)

Thanks to everyone for the great comments. Daniel has told me he's gotten the information he was looking for and asked me to close this topic.


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