Addressing group purchasing myths and highlighting how strategic teams use GPOs to reduce costs and drive value all without sacrificing control.
I was chatting to one of Una’s sales managers the other day, and she told me that when she first gets in contact with a procurement professional, the conversation usually goes in one of three directions:
- They already know all about group purchasing organizations (GPOs) and their benefits. (Great!)
- They’ve never heard of GPOs and they’re interested in learning more. (Also great!)
- They’ve heard of group purchasing, but unfortunately they’ve picked up one or more misconceptions about what we do. (Face-palm!)
Let’s take a moment to address and debunk five prevalent myths about GPOs that our sales team hears all the time. Our aim here is to set the record straight and illustrate how strategic teams use GPOs to reduce costs, free up resources, and drive value - without sacrificing control.
Myth 1: GPOs Are Only for Healthcare or Small Companies
Reality: While GPOs originated in healthcare, they've evolved to serve all types of industries, including manufacturing, logistics, retail, and more.
Did you know there are two types of GPO?
- Horizontal GPOs (like Una!) serve organizations spanning all markets and industries. This type of GPO works with businesses of all shapes and sizes, offering assistance on a broad spectrum of goods and services, mostly related to indirect spend. After all, every business needs indirect goods like office supplies!
- Vertical GPOs serve niche segments and are usually created as a way for management or association groups to benefit their member companies. This type of GPO is commonly found in the healthcare, hospitality, dental and veterinarian industries.
In other words, those people who mistakenly believe GPOs are only for healthcare have probably only heard about Vertical GPOs.
Moving on to the question of size: we often say that the buying power offered by group purchasing means that even the smallest players can access hefty supplier discounts thanks to volume purchasing. But this doesn’t mean larger organizations are excluded. Businesses of all sizes can leverage GPOs to access better pricing and terms.
How? Because even though a large business will benefit from economies of scale, these will pale in comparison to the massive size of a volume purchase placed with a supplier by a GPO.
Case study: Campus Cooks is a national food service provider that serves over 150 Greek chapters in 26 states. Despite their existing economies of scale, they faced challenges in securing favorable pricing and reliable service from larger food distributors. To address these issues, Campus Cooks partnered with Una.
This collaboration led to savings of up to 15% on food costs and streamlined their procurement process without sacrificing relationships with local vendors. Ultimately, Campus Cooks was able to enhance service delivery and focus on supporting Greek life more effectively.
Myth 2: Joining a GPO Means Losing Control Over Procurement
Reality: A common concern is that GPOs will override existing procurement processes. In truth, reputable GPOs like Una offer non-exclusive agreements, allowing businesses to choose which contracts to utilize. In other words, we’re here to support your procurement strategy and act as an extension of your procurement team. It’s your strategy, your process, and your success.
Case Study: YPurchasing is a group purchasing organization dedicated to providing savings programs to YMCAs across the United States. Combining their already impressive buying power with Una’s catapulted YPurchasing into another realm of cost savings when it came to food and food distribution.
Together, YPurchasing and Una formed a trusted partnership that meant that YMCAs around the country would see an additional 10-15% savings on food costs, and allowed YPurchasing to focus on growing and providing value to their members.
We didn’t enter the relationship looking to change YPurchasing’s strategy or impose “our way” of doing group purchasing. YPurchasing members could access Una’s contracts free-of-charge with zero long-term commitments, and with no product limitations.
Myth 3: GPOs Replace Internal Procurement Teams
Reality: We’re not here to take procurement’s jobs! In fact, we’re here to make you look even better at what you do. GPOs like Una complement, not replace, internal procurement functions. We handle the tactical aspects of sourcing in specific categories, slashing timelines and freeing up internal teams to focus on strategic initiatives.
Case study: A discovery call with a network for behavioral health centers identified areas of concern including office supplies, staff uniforms, and JanSan where indirect spend was out of control. The member needed to deliver these savings right away. However, no one in the procurement team had worked with a GPO before and they were unsure what to expect.
The level of customer services offered by the Una team, along with our ability to act as an extension of their lean procurement team, showed the member what kind of partnership was possible. Our team worked category by category, conducting spend analyses, comparing current pricing to our pre-negotiated contracts, and working with the their national account managers to ensure members are able to start saving immediately. As a result, this member was able to save an average of 27% across all categories of spend.
Myth 4: GPOs Require Significant Time and Resources to Implement
Reality: Implementing GPO solutions can be swift and straightforward. Una's streamlined onboarding process allows businesses to realize savings quickly, often within days or weeks. Their team works closely with members to identify opportunities and integrate solutions seamlessly into existing procurement strategies.
Onboarding with Una is as easy as 1, 2, 3:
- Discovery call: Our team likes to begin each relationship with a 30-minute discovery call. This isn’t about Una selling our services; it’s a two-way chat between you and one of our Sourcing Advisors to help decide if we’re a good fit. They'll ask a series of questions about the challenges you’re facing and the goals you plan to achieve. We want to understand what success looks like for you, so we can determine the opportunities and timelines involved.
- Cost analysis: Next, we like to conduct a cost analysis, one category at a time. This will help us identify potential savings, improve spend visibility, look for opportunities for consolidation and streamlining, and benchmark your current pricing.
- Connecting you with suppliers: Finally, we'll help find and connect you with top suppliers to lock in savings. Una’s catalog of pre-negotiated contracts is already in place, meaning you will get access to the best possible pricing, fast.
Watch this quick video that answers some FAQs regarding Una's onboarding process:
Case study: Ascend Wellness Holdings needed to consolidate spend and strengthen their supplier relationships. Speed was important, but not having worked with a GPO, they didn’t know what to expect. However, the very first discovery call they had with the Una team explained what they needed to know: Una’s robust supplier portfolio and readily available pre-negotiated contracts were the quickest way for AWH to realize savings within certain categories. Turnaround times were fast and Una’s level of customer service appeared to be unparalleled.
Together, AWH and Una developed a plan to deliver cost savings quickly and efficiently in key categories like shipping, packaging, and industrial supplies first, and then branched out to find ways to improve the contract management process and enhance procurement efficiencies. By partnering with Una, Ascend Wellness was able to improve their bottom line in terms of monetary savings and unlock resources that allowed them to remain focus on company growth.
Myth 5: GPOs Are Only About Cost Savings
Reality: GPOs like Una do so much more than just save you money! We help organizations stay on top of compliance, cut down on procurement risks like maverick spend, and boost overall efficiency. By building strong relationships with pre-vetted suppliers, GPOs make communication smoother, leading to better quality and innovative solutions. We also help manage supply chain risks and promote sustainability and diversity in sourcing.
Case study: Una stepped up for Savvik Buying Group in more ways than just saving money. By teaming up with Una, Savvik boosted its purchasing power and gained access to contracts that were previously out of reach, helping them expand their portfolio significantly. This partnership allowed them to offer new medical supply contracts and additional perks to their members, which now includes over 14,000 agencies across all 50 states.
The best part? Una streamlined the contract negotiation process, saving Savvik tons of time and effort. Mickey Schulte, Savvik's Executive Director, noted how valuable it was to access contracts that someone else had already negotiated. Plus, Una's member experience team provided fantastic support, allowing Savvik to focus on what really matters—serving public safety agencies effectively. Overall, the partnership has been a win-win, helping Savvik grow and enhance its offerings.
Group Purchasing Myths - Busted!
We’ve busted five common myths about GPOs that often hold organizations back:
- GPOs aren’t just for healthcare or small companies; they serve all industries and businesses of any size.
- Joining a GPO does NOT mean losing control over your procurement process - it's all about support and flexibility.
- GPOs complement internal teams, helping them shine rather than replace them.
- Implementing a GPO is quick and straightforward, not a lengthy hassle.
- GPOs do much more than save money - they enhance compliance, reduce risks, and improve overall efficiency.
If you’ve been misinformed about GPOs, it’s time to rethink and explore how they can truly benefit your organization!
Let us help - get in touch with the Una team today.
