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.