Volume, Volume, Volume

Next week, the San Francisco based company called Accompany is launching what may well be the future of E-commerce.

The concept is fairly simple when when you think about it: Creating groups to get volume discounts on products. A single product was up for sale (3Com’s Palm V, which they offered for $350 to the first 50 buyers to come in) but the concept makes sense. If you’ve ever been into a Price Club or Costco store, you’ll understand it fairly quickly: the more people agree to buy the product at its current price, the lower the price gets. The buyer is guaranteed to get the product they want at the price they entered in OR LOWER.

Think Ebay in reverse… Imagine being able to go out and say “I’m willing to pay $2000 for this computer,” put in your order, wait a couple of days, and see that price drop to $1500. You net the saving, Accompany gets a transaction fee and everyone is happy.

As we all know by now, Amazon.com figured out that consumers wanted to be able to have an easy shopping experience online; Ebay figured out that people were willing to pay more for scarce good.

Accompany will most probably be remembered as the first company that went out and said “let’s get volume discounts.” Now, I’m not sure that they will be successful in the long run (their business model is based on a lot of people paying them commission fees on those sales) but I believe that the business model is one that will stick around and one that could revolutionize the way people buy products online.

This volume discount approach might also represent an interesting move in the buyer/seller relationship, moving the power directly into the buyer’s hands. Large corporations are usually wined and dined by big computer manufacturers, for example. Imagine now that this online volume buys model takes off and is coupled with something like a shopping bot and you have a veritable revolution in the shopping space, where complete disintermediation of everyone including the Amazon.com’s of this world is a possibility.

Why go to Amazon.com or Barnes and Nobles, when you can be part of a group of people that goes directly to the publisher and gets a huge discount as a result? What is the value add that a bookstore like Amazon provides?

Those are only a few of the questions Accompany’s new business model are raising.

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