Village oil buying syndicates - ethics?

G_M

Just wondered how these normally operate, so anyone either running or using one could comment....:

There's presumably a certain amount of time / effort involved in running these schemes, so does the 'organisor' usually take a fee? Or get free oil/other incentive from the suppliers for passing them the bulk business? Or receive remuneration in some other way?

If so, do the users of the scheme know - is it transparant?
Or do they believe it's a 'cooperative' venture with no profit/overheads etc?
What is the ethical position?
How is the scheme 'sold' to new users (and does it matter)?

Any views welcomed!

[Deleted User]

i would have thought the easiest way would be for all those involved to agree to use the same supplier and negotiate a discount based on "bulk"buying
shouldnt be too much work involved for anyone really once a deal has been agreed

devildog

There is one on the go where I live. The 'organiser' drops a note through the doors stating that they will be looking to order oil on or about a given date and stating what the likely price per litre will be, and if you want some then contact them with your requirements by a certain date. They then contact supplier requesting a price for however many total litres required. The oil is delivered to each household and each householder pays the oil company separately.
There is no fee, renumeration or free oil. There are no profits or overheads because each customer pays the oil company direct and the scheme isn't 'sold' in any shape or form. The benefit to the organiser is that they order when they want/need the oil and if they can get more people to order at the same time, they and everyone else gets a better price per litre.

G_M

Sounds straight-forward.

Have you heard any hints the organiser might be getting a freebie from the supplier in return for ordering from them rather than a competitor..... and if you did hear, would you care?

And out of interest, do those ordering get given a firm price before confirming, or just get a price once the total order size is known and the order has been placed? I ask because prices vary so much that doing a wide shop-around might result in a better price than the bulk order if the organisor is only going to 2 or 3 suppliers.

RHYSDAD

G_M wrote: »

Sounds straight-forward.

Have you heard any hints the organiser might be getting a freebie from the supplier in return for ordering from them rather than a competitor..... and if you did hear, would you care?

People are always after free stuff but in terms of heating oil (and fuel generally), it ain't gonna happen.......
As for using one company over another, same applies. YOU need the oil THEY supply and they WILL sell it one way or another regardless as to whether it's you or not. Fuel companies don't really have to tout for business....

WhiteHorse

A bulk order also means that the company can tailor the vehicle size. This is useful in awkward rural locations were the use of say, a baby tanker, might not normally be a practical proposition.

kkgree1

The oil clubs I know of (in Cambridgeshire) order through a broker. Most are run by the local district councillors and I believe the Parish Councils get an bonus payment the more orders that are processed through the broker.

There has been an issue recently in that several people have beaten the broker price by 1 - 2p a litre by ringing around the oil companies and haggling.

devildog

No, no hints, as to if I was to hear that they were, would I care-difficult one really but I don't think so because I am quite capable of ringing around the fuel companies too and if I an get a better price I would go elsewhere, if not then I have got the best price so what is there to complain about.

When the note comes around, there is an estimated price with about 4p difference per litre in the lower/top price. After everyone has said if they are interested a firm price is then given and even at this point you can still opt not to buy(not sure about whether the price then does up for the others though) I wouldn't of thought so because a large majority do buy.

Personally I have only ordered once this way before, mainly due to when the organiser is going to order my tank has sufficient in and I tend to fill up in summer months after ringing round for the cheapest deal. I believe the organiser goes to the same supplier every year.

G_M

devildog wrote: »

No, no hints, as to if I was to hear that they were, would I care-difficult one really but I don't think so because I am quite capable of ringing around the fuel companies too and if I an get a better price I would go elsewhere, if not then I have got the best price so what is there to complain about.

When the note comes around, there is an estimated price with about 4p difference per litre in the lower/top price. After everyone has said if they are interested a firm price is then given and even at this point you can still opt not to buy(not sure about whether the price then does up for the others though) I wouldn't of thought so because a large majority do buy.

Personally I have only ordered once this way before, mainly due to when the organiser is going to order my tank has sufficient in and I tend to fill up in summer months after ringing round for the cheapest deal. I believe the organiser goes to the same supplier every year.

Sounds very similar to the scheme I'm looking at, except that the organisor does get a kick-back in return for using the same 1 or 2 suppliers each time (confirmed indirectly by supplier). And sometimes can be beaten on price as a result.
Worth it to the supplier I guess because it's a large scheme ordering significant volumes at least once a month.
Also has a list of recommended boiler engineers etc, but only recommends those who give him a commission (my engineer declined so is not on the list despite being a) excellent and b) local).

My impression is that most users of the scheme use it automatically having been convinced it must be the best deal available because it is a non-profit making organisation using bulk-buying price-power.

devildog

I think you are right about users using it automatically, specially those who maybe don't go online(most likely to be elderly) and check out prices or those that simply cannot be bothered.
I prefer to do my own' legwork' re prices but can see the benefit if the winter is long and cold and you just want a top up in case.
Here the order tends to go in twice a year, not monthlyl

I now tend to stay away from 'recommended' boiler engineers/plumbers, stove fitters etc. They usually end up being the worst of the bunch. Thankfully over many many years (and lots of poor experience) finally have decent ones that actually know what they are doing