¹ In the last few years, the electronic marketplace has witnessed an exponential growth in worth and size, and projections are for this trend to intensify in coming years. Yet, the tools available to market players are very limited, thus imposing restrictions on their ability to exploit market opportunities. While the Internet offers great possibilities for creation of spontaneous communities, this potential has not been explored as a means for creating economies of scale among similar- minded customers. In this paper, we report on coalition formation as a means to formation of groups of customers coming together to procure goods at a volume discount (“buying clubs”) and economic incentives for creation of such groups. We also present a flexible test-bed system that is used to implement and test coalition formation and multi-lateral negotiation protocols, and show use of the test-bed system as a tool for implementation of a real-world “buying club”.