Group Purchasing

Processing of buyers coming together to make a single bid/transaction for an offering, in order to get a lower price.

Why might a seller accept a lower price for a big purchase? (Economies Of Scale)

  • lower manufacturing cost for big batches (Setup Cost)
  • lower CostOfSales
    • reduce need for Advertising
    • avoid cost of negotiating/closing many individual transactions (gives talks to big groups of employees, rather than 1-on-1 Q And A)
    • lower account servicing cost

Does this justify Price Discrimination?

How does the Robinson Patman Act apply? http://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act


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