Too Small to Bag a Bulk Discount? Join the 'Crowdsourcing' Clubs; Shoppers Fighting Soaring Prices Are Banding Together in New Groups to Boost Their Buying Power

Article excerpt

Byline: Jo Thornhill

As food and fuel prices continue to soar, now is a great time to club together to get the best deals. From forming community-based co-operatives to using cutting-edge websites offering special rates on the cost of utilities, a joint approach can boost spending power in these tough times. Financial Mail looks at the best ways to team up.

ONLINE COLLECTIVES

TRAINEE barrister Emma Knight signed up to incahoot.com a month ago but she is already telling her friends to join. Incahoot is one of a new breed of 'collective' or 'crowdsourcing' websites that use bulk buying to negotiate special rates and discounted deals.

It is free to join and Incahoot currently has a handful of deals on offer - these include broadband, gas and electricity, iPhone handsets and mobile phone packages.

Emma, 24, who lives with husband, Matthew, 26, a research executive, in Wandsworth, south London, went to Incahoot on the recommendation of a friend as she wanted a better mobile phone deal with O2. A simple switch saved her [pounds sterling]360.

'I've been with O2 for six years and was spending [pounds sterling]20 a month for which I got 600 free minutes and 1,000 free texts each month,' says Emma. 'With the Incahoot deal I got a free smartphone and for [pounds sterling]20 a month I now get 900 free minutes per month and 5,000 free texts.

'The same deal with O2 on the High Street would cost me [pounds sterling]40 per month - so I've made a big monthly savin The cherry on the cake was the [pounds sterling]120 cashback for doing the deal.'

Emma is so impressed with Incahoot she says she will switch to the broadband and energy deals once her current contracts come to an end. For each friend she recommends who signs up to a deal, she will also get a [pounds sterling]10 reward.

'I've made a note in my diary to switch using Incahoot once my current contracts expire as I don't want to have to pay a penalty,' says Emma. 'Incahoot will email an alert.'

Another collective website - groupon.co.uk - claims to be able to negotiate discounts of 50 to 90 per cent on deals with popular retailers as well as local businesses.

You register for free and can check out the national and local deals in your area - from discounts on restaurant meals and cinema seats to cut-price spa treatments.

CO-OPERATIVES

THE co-operative model is becoming more fashionable in this age of austerity, but it is certainly not new. The first co-op was set up in 1844 by workers in Rochdale, Lancashire, angry that food prices were too high and that the shops were owned by the mill owners.

The workers began their movement by offering staple products such as butter and sugar in their own shop, banding together to negotiate the best wholesale prices for members.

Today, as more households are seeing their budgets stretched, the idea of banding together with others in the local community to maximise buying power has never been more relevant.

Ed Mayo, secretary general of trade association Co-operatives UK, says there are more than 400 buying cooperatives.

'Our research shows half of consumers are planning to save money by co-operating with others this year,' he says. 'Co-operatives have always had a good reputation for being ethical, sustainable and membercontrolled, but now the cost-saving aspects are becoming increasingly important.'

The Government will launch a consumer White Paper next month that will include proposals to encourage everyone to join local co-operatives, for example to buy groceries.

There are a wide range of co-operative businesses, but they all have basic principles in common - they are owned and run by members and profits are used for the benefit of members.

Joanna MacDouall helps to run the True Food Community Co-operative in Reading, Berkshire. The group has grown out of a small buying club set up by several independent wholefood shop owners who were forced to close their businesses following the building of a large shopping centre in the town 12 years ago. …