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Community Buying – The organisers’ view…
The benefits
Without doubt the main aim in setting up or joining a buying group is to save money – most of the groups that FON spoke to were united on this point.
Richard Holland, the instigator, designer and facilitator of the Wellow Oil Group in Somerset believes: “Substantial financial savings to members and less traffic movements and pollution into the various communities,” are key factors. “There’s no charge to belong to the group as I co-ordinate it as part of my voluntary commitment to my community. I can always beat national oil groups such as BoilerJuice on price – in fact they’re almost, without exception, the most expensive price I receive!”
For Barney Lodge however, who runs the 1550 strong Essex-based Oil Buying Group, having a membership database is one of the key advantages. “It can do so many other things for rural membership,” he explained.
My Consortium covers areas in the south west and East Midlands. Owner, Lisa Poole, told FON that there were a number of reasons for setting up the group. In addition to saving rural people money on heating oil, Lisa wanted to give power to the rural community, keep consumers at the heart of the business model and help those close to or in fuel poverty. As far as the benefits are concerned: “My Consortium does the work and the customer can sit back and let it happen rather than ringing round lots of suppliers themselves.” She believes that sharing market information and intelligence is also a huge advantage.
Running a group
Running a community buying group can be a full time job, but for most co-ordinator’s this is simply not a viable option. Steve Blood, co-ordinator of the Oxfordshire Merton Oil Buying Group (MOBG) set up the group in 2008 with just 19 participants. The group, which is not for profit, now boasts nearly 600 registered members. “My current employ is not a nine-to-five job so the time available to run MOBG is stretched and it’s very time consuming. Although the group was initially free to join, Steve introduced an annual £10 administration charge to cover his expenses and a small fraction of his time.
Lisa Poole however, runs My Consortium as a commercial business. “I run the group as flexibly as possible. I have half a dozen local suppliers in each area and some that cover the whole country. Suppliers advise me of their bulk buying price each morning and I place orders every day.”
Carole Seward runs Enstone Oil in Oxfordshire, with help from her husband. “I’ve asked for volunteers in the past but none were forthcoming. We’re a small group though so we can manage.” The group was set up in 2008 by housing association, Cottsway Housing. Having established one in neighbouring Burford, the association wanted to encourage other communities to do the same.
Administered by Barney Lodge, the Oil Buying Group places orders for approximately two million litres of oil per year. Barney believes that as a result of not charging for membership or commissions, the group’s numbers are climbing. “Members’ orders are posted online against a pre-determined buying date via their own village website, and orders are consolidated and exported to Excel for the winning supplier. The entire project, including a super-fast response to any enquiry, is managed on my iPhone and only takes a few hours a month.”
Preparing for winter
Getting members organised for the colder months is no mean feat. Lisa Poole has been galvanising customers into early action. “The first thing I did was advise customers when the price was at, what I felt, its lowest. Back in June I contacted customers, advising them that it might be a good time to buy so they are topped up for winter, and many took advantage of this. We also encourage customers to purchase their oil before December to try and avoid paying an inflated price.”
Keith Weller, co-ordinator of the Worcestershire-based Bayton Oil Syndicate agrees: “I get people to buy when the price is low, usually during the summer months. I also advise people to have at least two weeks reserve in their tanks when ordering.”
Having being caught out in December 2010 by the sheer volume of new members wanting to order oil just before Christmas, Steve Blood plans ahead. “I avoid placing a group order in December. Obviously everyone’s needs are different so I would place a small order for those that actually need it, but my aim is to have the bulk order delivered at the beginning of December. I also place two orders in January.”
Carole Seward has also learned the hard way: “The first year, I placed an order in December. As soon as I did that it snowed and the temperature plummeted! Just about everyone received their oil before Christmas except me. So I learned to never place an order in December.”