3 Things Every Business Needs to Know About Group Purchasing Organizations
By Mackenzie Oakley | September 2, 2021
Here at Una, we have an entire resource center dedicated to empowering procurement to make informed decisions regarding their sourcing strategies and ways to improve their bottom line. That includes spreading the word about GPOs and how working with a group purchasing organization could be one of the best moves you make for your business this year.
Despite its long history, the concept of group purchasing isn’t widely known amongst companies in the private sector, yet the ability to work with a GPO is something that is available to most businesses out there.
Here are 3 key things every business owner needs to know about group purchasing organizations.
A group purchasing organization is a buying solution
Most businesses – small, medium, and large – have operating expenses which include everything from office supplies and telecommunications, to travel and more. A GPO allows businesses to increase their buying power to access discounts for those expenses that they’d never be able to find on their own.
What does it mean to increase your buying power?
A GPO leverages or combines all of its members and their purchasing volume to negotiate discounts with suppliers on its members’ behalf. When you join the GPO, you get to take advantage of those pre-negotiated contracts and pre-determined volume without having to hassle with setting your own terms and hoping you’re getting the best possible pricing available.
Most of the time, a GPO is used to help businesses save on their indirect spend or unplanned spend, but can also be used for direct spend categories as well.
The best group purchasing organizations are free of obligations
Any business regardless of size can join a GPO and most are free. At Una, we never charge membership fees which means our program is free to join and our contracts are free to use.
Depending on your needs, you’re able to pick and choose which suppliers to work with, without ever having to worry about minimum purchasing requirements. You can also cancel at any time.
What's the catch?
To some, the concept of a group purchasing organization sounds too good to be true and it’s one of the most common things we hear during the process of educating others on how GPOs really work.
The best group purchasing organizations increase your purchasing power, deliver value beyond cost savings, and give you access to better contracts and suppliers. A real GPO partnership should work with you to build a recipe for success based on your own goals, focusing on specific categories that will directly impact your business as a whole.
If you’re working with the right GPO, there truly shouldn’t be a “catch.” Transparency is key and Una strives to take a consultative approach with each of our members to define what success looks like for them, and figure out a plan together to make it happen.
The benefits of a group purchasing organization extend beyond cost savings
Saving money is crucial, and oftentimes at the top of your list of priorities. However, the real value of working with a GPO will be found beyond the initial cost savings. GPOs have the ability to offer assistance on everything from supply chain management, data and analysis, education, and more.
Beyond cost savings and increased buying power, other benefits include:
- Supply chain and contract management
- Cost comparison analyses and data analytics when it comes to your direct and indirect spend categories
- Customized member programs
- Category management services
- Personalized consulting
- Speed to savings
It's the real deal
The problem isn’t selling the idea of working with a GPO to a business – it’s a clear win-win situation for everyone involved. The problem is that most companies just don’t know that working with a group purchasing organization is even available to them.
The truth is, working with a GPO and obtaining significant cost savings, along with additional value-added benefits, is completely possible for many, if not all, of the businesses in the private sector.
Supplementing your current procurement strategy with a GPO is a great way to add additional resources to your team. With Una on your side, you’ll have access to dedicated Sourcing Advisors working behind the scenes to ensure you’re connected to the contracts that make sense for your business, and a Member Experience manager researching additional savings opportunities that may benefit your organization.
With supplier and contract negotiations off your plate, you’re free to focus on other strategic initiatives and ways to grow your business.
To learn more, reach out to Una today.
