Collective Buying Power

Collective Buying Power

Buying power is the number of services or goods a company, person, group, or currency is able to purchase. Collective buying power is the ability of a group of consumers to leverage the group size in exchange for discounts. The collective can be comprised of businesses of any size from any industry who want to leverage economies of scale to gain more competitive energy prices.

In the marketplace

One of the worst feelings in the world is to launch a new product that no one buys. Many different companies have used this concept to build business plans. Warehouse clubs function in a similar way by offering products in bulk to consumers who pay membership fees. Developing and promoting products can take hours of hard work and innovation, so you want to ensure that your product launches excite customers enough to purchase. In the same sense, collective buying power is a cooperative approach to leveraging group size to benefit the consumer by offering. When the numbers and consumers are behind a company, collective buying power can make all the difference in price negotiations with suppliers and, in turn, can provide more longevity to the online retailer as well.

Internet companies have been leveraging this concept, bringing people together online. Today’s online retailers usually collect data on what their customers regularly purchase while also tracking customer preferences and keeping an eye on current and upcoming trends. The company will arrange a coupon offering, that will only go into effect if more than a before agreed-upon number is sold. However, the power goes beyond product launches and promotions. Collective buying power also can give company leverage with certain suppliers.


The huge number of suppliers in the market and the variety of contracts available can make the presentation of the future costs of your energy difficult to compare. Once a company has collected data on customers’ shopping preferences, they can launch and promote the products customers need. This revolutionizes the sales process by replacing risky decisions with calculated choices backed by numbers and customer feedback.

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