Aug 23

Crowdsourced / Group Buying / Discount Buyers Club for Property Managers.

I am always looking for a new ways to use ideas from other industries for our rental property business.  Affordable Rentals’ cafeteria style management was lifted from the concept of farmer’s co-ops.  I read scores of USDA info on farmer’s co-ops before putting the plan in place. Individual farmers could not afford many of the capital intensive tools and resources, but a collection of farmers could and thereby compete with or supply the corporate agribusinesses.

Well the latest idea is similar.

What if we were to create a buying group or at least a buyers forum?

I have kicked this around for probably a decade. Back in ’01 I had written out a fairly detailed plan, but scrapped it as it would either be logistically impossible or capitally intensive.

Fast forward eight or nine years.   Today there are online models that get around the issues that made this a foolish  dream just a decade ago.

Here are my thoughts on how landlords working in concert could achieve lower supply costs today.


The is the basis for the concepts laid out below. Wikipedia has a pretty good overview, but basically groups of people, typically unknown to each other, work together to find a solution to a problem for the mutual benefit of all participants. Sounds a lot like fancy schmancy term for the idea behind a farmer’s coop, doesn’t it.

Group buying

This has been around forever, but until recently had such a high transactional cost that much of the benefits were eaten by overhead.

Today companies like Groupon have neat business models wherein the subscribers commit online to buying goods or services. The vendor makes an offer to sell a certain minimum quantity at a better price than the market price.  If enough people sign up to satisfy the amount the vendor wishes to sell to offer the discount – game on.

To put it in landlording terms:  Let’s say latex semi-gloss of a certain grade sells for $14 a gallon.  But you negotiate with ABC paint to sell a thousand gallons of the paint at $9 a gallon. But what the heck are you going to do with a thousand gallons of paint?  Using this model the paint offer would be put out to many property owners who could commit to buying none to unlimited  pails.  If the thousand gallon offer was reached, everybody’s credit cards get charged and you go pick up the cheap paint.  If not, oh well it wasn’t a good enough deal to motivate the participants..

On line bulk purchases

Our company is doing this on a small scale, for example buying 300-500 smoke detectors at a time and often paying less than half retail.  But even at $3.25 a detector, a price we have paid recently, I had to lay out $1650 for a six month supply to get the price.

Most owners don’t have the capacity to avail themselves of such deals and those that can don’t like to buy six months of stuff at a time.


Companies like do this, but they don’t focus on our market.  You wade through too many $400 toilets before you find the $60 toilet you are looking for.

How would this work?

A couple of ways I envision this. They are not mutually exclusive, we could do both.

The easiest (with perhaps the lowest reward)

We start an online discussion group to share pricing recommendations.  The participants update the lists.  Maybe submitting something once every X would be a condition of membership.

Local and online sources are game here.

Software could be a Google Group, Twitter or whatever else you see out there and like.

Here is an article on grocery group pricing efforts using Twitter and Google Groups.  You can look at the Google Group, Price Check for an ida.  If you click on the topics list, I think this could be workable.

Something like IdeaScale may also be fashioned to work

A bit more difficult/more rewarding

We create a model like Groupon (here is an outside perspective on how Groupon works) and go the the manufactures and distributors for bulk purchased direct shipped bargains.

Another version of this is the Chinese model of Tuanguo while not exactly the same as it is more of a business than a group effort, it is worth looking at for ideas.

As far as software perhaps Pikaba (although they don’t appear to be very vibrant today) or a similar service could be used for such an effort. Another site aimed at Mazda car hobbyist, but an interesting model is at Flyin’ Miata.

The legal considerations

Buying Groups by Attorney Harry B. Ray

Leave a Reply

preload preload preload