Bulk Purchasing

Bulk purchasing or mass buying is the purchase of much larger quantities than the usual, for a unit price that is lower than the usual.

Wholesaling is selling goods in large quantities at a low unit price to retail merchants. The wholesaler will accept a slightly lower sales price for each unit, if the retailer will agree to purchase a much greater quantity of units, so the wholesaler can maximize profit. A wholesaler usually represents a factory where goods are produced. The factory owners can use economy of scale to increase profit as the quantity sold increases.

Retailing is buying goods in a wholesale market to sell them in small quantities at higher prices to consumers. Part of this profit is justified by logistics, the useful distribution function of the retailer, who delivers the goods to consumers and divides those large quantities of goods into many smaller units suitable for many transactions with many small parties of consumers. Retailers can also benefit from economy of scale to increase profit, just like a wholesaler does.

Bulk purchasing is when a consumer captures part of the benefits of economy of scale by doing with the retailer what the retailer does with the wholesaler: paying a lower price per unit in exchange for purchasing much larger quantities. This allows the consumer to satisfy more of his or her demands at a lower total cost by acquiring more use value per dollar spent.

Consumer demand for savings by bulk purchase has led to the success of big-box stores. Although effected by marginal cost, the total cost does not increase.

Music industry

In music industry, bulk purchasing is one of illegal practices to manipulate charts, beside payola and streaming fraud. In South Korea, it's called "sajaegi" (사재기).

In Korea, ''sajaegi'' generally refers to the illegal bulk-buying of any item — for example, a firm in South Korea recently ''sajaegi''-ed over four million face-masks due to fears over the coronavirus outbreak.

But in music, ''sajaegi'' has a more specific meaning — unethically and/or illegally boosting a chart ranking. For example, entertainment agencies bulk-buying their own CDs; or, probably more likely in the digital era, using bots or computer farms to repeatedly stream songs and hike up chart numbers. ''Sajaegi'' scandals are testing the Korean music industry, questioning the credibility of online charts, entertainment agencies and even some fan engagement.

While Sajaegi is when the artist or its company buy the units or songs themselves. It was a different case from the actual fans. Some bulk purchasing cases made by artist's fans were accused as mass buying. One controversial case is Dynamite by BTS. The band's fans (called "ARMY") made big fundraisers (or donations) roughly $40,000, according to Paper. Paper also stated that Blackpink's fans, BLINK also made a fundraising of $10,000 to buy Blackpink's first album, The Album. Other artists who got cited by Paper is Stray Kids, Taylor Swift, Harry Styles, Justin Bieber, and Miley Cyrus.

Chart manipulation has been a controversial topic in South Korea. South Korea's Ministry of Culture banned midnight release to avoid chart manipulation.

In order to stop chart manipulation that have done by fans, Billboard has introduced new rules, mainly for the Hot 100. Only 1 digital sale will be counted per customer per week for songs and albums. Bulk purchases of 2 or more will not be counted.

See also

* Bulk sale

Procurement

References

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