I have been pretty silent about the whole group buy process since the incident with the Novelty buy but I think that I can offer some sort of insight on how all of this works out to be sketchy and yet stable at the same time. First, let me respond to a few quotes I found noteworthy.
If you think the organizer isnt taking any risk your nuts. Ask the couple people who have had their banks accounts locked because of "suspicious" activity on paypal.
While a lot of people may have dismissed what Lpb45 was trying to say this one hit home the hardest for me. Saving the story for later what I can say is that as a result of Paypal not liking me I lost the $70 I made from selling a handful of SC2 caps in October, I cannot use Paypal ever again in any way, and I had to get a new debit card (two because my bank misunderstood what I meant by a new number) in order to buy my new Leopold. What this means, for the misinformed, is that I cannot pay for or be payed for things using Paypal and in turn I do not have the capacity to create, run, or buy from group buys unless I have a proxy handle the payment for me (which he has done in the past and is a good friend of mine) or pay in cash (which I have the capacity to do with Rag). Furthermore, I was forced to back out of a buy I found to be rather awesome in the form of Hashbaz's RGB kit. These buys can be dangerous and at the blink of an eye all of the hard work put for them can vanish. Luckily for my buy Tsangan was there to sweep it off its feet and make it happen smoothly, regardless of the bumps faced by the 120+ buyers who had already paid me.
This is why you don't see me participate in all the group buys. If you don't agree with the group buy's organizer (or his/her principle) then just don't buy it. lol It isn't the end of the world if you don't own certain keycaps. =P
I read the group buy section about twenty times a day and every time I find a new post I evaluate the organizer. If they are not a prominent community member, if their structure is shotty or full of gaps, or if I just don't like their signature, I dismiss the post entirely. While I may want the product, I may NEED the product, it is necessary to walk away if it feels like a back alley deal.
Now, on to what I feel I can contribute to this discussion.
At the end of October 2011 I followed Rag in making a group buy but this time I took the keys that were in GB4 (People thought I would never have it done before they shipped in that buy) and create a moderately structured buy with loose ends for more keys and options. At the beginning there were about 15 options, including the StarWars keys that were later thrown out for copyright reasons, and reception was somewhat spotty. When the order post was put up the prices were $2 a piece for any cap and in the first week we had about ~300 key orders overall.
From this point I began looking at the SP pricing structure and decided that if the prices were flexible based on count and if I were diligent enough there could be rapid decreases in the prices of the most popular keys. This model, for the most part, started off slow until about the end of the second week when there were a few notable orders that were more confidence orders than anything. With these the prices of the Awesome faces and LoD fell to under $1.50 and the week later most of the keys were at the $1.50 mark with the best 1x keys being $.80. By the end of the buy this structure had everything popular down to $.41. What this meant, however, was that any profit I could make from this buy would become down to zero for the overhead and down to whatever I could make for the extras I bought on resale.
This, of course, was a judgement call. It is the job of the organizer to make these decisions to see the buy succeed. From what I recall the Novelty Group Buy ended up being the largest single order for novelty/single keys in the history of GH's group buy system because of the pricing structure; low prices brought on more orders and it snowballed because of SP's awesome price system.
Now, obviously, I was not the final figurehead doing the Novelty Buy because at the time of the money collection, three days after the invoices were sent out in fact, my Paypal became locked by the company and the dispute which followed forced me to do a reversal of all money collections. With this I was forced to pay all of the Paypal fees back, lose my Paypal account, and lose access to Paypal's instant pay services. My existence as a group buy organizer ended because of this and I promptly had to back out of several buys I was partaking in.
Therefore, I look at Group Buys a little differently than people. The organizer takes the risks to make a buy, and make it run smoothly, and in turn makes decisions on what will benefit them the most. Some take direct profit, others draw profit from free keys, and the special breed do it for the love of keyboards. There is no one rule of thumb which can and must apply to Group Buys because they are not a store, a corporation, or a foundation. They are, in the end, one or multiple people sticking their necks out there to do something amazing.
