How Do GPOs Work Within My Overall Procurement Strategy?

Una is on a mission to empower lean procurement teams - we lovingly refer to them as “Sourcing Heroes” - to overcome the daily challenges of indirect spend, supplier management, and cost reduction. With a holistic approach that incorporates group purchasing, procurement leaders can reclaim valuable time, unlock new cost savings, and focus on leading strategically rather than executing tactically.

One of the most common questions we hear from procurement professionals is: how do GPOs actually work, and where do they fit into an existing procurement strategy? This article answers both. We'll cover how group purchasing organizations function, who's involved, what it costs, and how to think about GPO membership as one component of a broader sourcing strategy.

How Do GPOs Work?

A group purchasing organization leverages the collective buying power of its members to negotiate volume discounts with suppliers. Those discounts, normally reserved for large enterprises with significant purchasing volume, become accessible to any organization that joins the GPO, regardless of size.

Imagine a Fortune 500 company spending $50 million a year on office supplies gets dramatically better pricing than a mid-sized business spending $50,000. A GPO pools the purchasing volume of thousands of members so that the mid-sized business benefits from the same pricing tiers as the enterprise without having to negotiate independently or grow its own purchasing volume to qualify.

Buying Power: Strength in Numbers

Most organizations spend a modest amount in indirect categories like office supplies, shipping, or facilities maintenance. Because individual spend volume is relatively low, pricing reflects that. The gap between what a business pays and what a large enterprise pays for the same goods can be significant.

By joining a GPO, your organization's purchasing power is combined with thousands of other member organizations. The GPO uses that collective volume to negotiate contracts with suppliers at enterprise-level pricing tiers. Once you're a member, you access those pre-negotiated rates immediately.

Una currently represents over 100,000 members and more than $100 billion in collective buying power. That scale is what makes the pricing available to Una members difficult to replicate through independent negotiation, regardless of how skilled or resourceful the procurement team is.

How Supplier Relationships Work

A GPO's value is directly tied to the quality of its supplier relationships. Una has spent years building partnerships with high-performing suppliers across indirect spend categories like office products, shipping, food service, JanSan, MRO, uniforms, travel, and more. Those relationships produce contracts that are actively managed, regularly benchmarked, and structured to deliver real savings rather than nominal discounts off inflated list prices.

When you join Una, you're not handed a directory of suppliers and left to figure out the rest. Una's Sourcing Advisors introduce you to the right suppliers for your categories, facilitate the connection, and stay involved to ensure the relationship delivers value. The suppliers Una works with understand that Una members represent committed, ongoing volume which is why they're willing to offer pricing that individual organizations couldn't access on their own.

Saving Time and Effort

Procurement professionals managing multiple categories, supplier relationships, and cost-savings targets simultaneously know that time is a constrained resource. Every hour spent running an RFP for an indirect category is an hour not spent on strategic sourcing, supplier relationship development, or higher-value initiatives.

A GPO compresses the indirect procurement timeline significantly. According to McKinsey, a single supplier search takes an average of three months and more than 40 hours of work through the RFP process. For categories covered by Una's pre-negotiated contracts, that timeline shrinks to days or weeks from first conversation to active savings. Una's advisors deliver an average of 22% savings on categories members are already purchasing.

Sourcing suppliers on your own can be a months-long process. Group purchasing shrinks that timeline down to days or weeks.

— McKinsey Research

For a deeper look at how a GPO compresses each step of the procurement cycle, see our playbook: How to Improve the Procurement Process & Increase Cost Savings.

How GPOs Make Money

Not all GPOs have the same fee structure, and the model matters because it directly affects your net savings and flexibility. There are three main approaches:

• Supplier administrative fees — the most member-friendly model. The supplier pays the GPO a small percentage of each transaction. The member pays nothing, and the GPO's incentive is aligned with yours: the more you save, the more they earn.
• Member fees — onboarding fees, annual dues, or participation fees charged directly to members. These reduce your net savings and need to be factored into any ROI calculation.
• Minimum purchase requirements — sometimes buried in contract terms as "free" membership that carries volume commitments or long-term lock-in. These limit flexibility and complicate broader category strategy.

Una uses the supplier administrative fee model exclusively. Membership is always free with no onboarding fees, no annual dues, no minimum purchasing requirements, and no contractual lock-ins. Every time you purchase through an Una contract, the supplier pays Una an admin fee. We make money by saving you money, which means our interests are completely aligned with yours.

For a full breakdown of how to evaluate GPO fee structures when comparing options, see: The GPO Evaluation Playbook.

Finding Value Beyond Cost Savings

Cost savings are the primary reason most organizations join a GPO but a well-matched GPO partnership delivers value across several dimensions that matter to procurement leaders and finance teams alike.

Speed to Savings

Pre-negotiated contracts eliminate the RFP process for covered indirect categories. Most Una members connect to an initial contract and start saving within a month of joining. That speed-to-value is difficult to replicate through internal sourcing for common indirect categories.

Category Management Capacity

A GPO effectively extends your team's reach into categories that don't receive dedicated sourcing attention. For organizations where one or two procurement professionals manage dozens of categories, a GPO handles the indirect and tail spend categories so internal capacity can focus on strategic and direct spend priorities.

Supply Chain Intelligence

Una's Sourcing Advisors work across thousands of member organizations in multiple industries. That breadth of experience produces market intelligence on pricing trends, supplier reliability, and category dynamics that individual organizations couldn't generate internally at comparable depth or speed.

Risk Reduction

Pre-vetted supplier portfolios, established contractual relationships, and multi-year price protection all reduce the procurement and supply chain risk that comes with unmanaged indirect categories. A GPO also provides alternative supplier options for categories where single-source dependency creates vulnerability.

Sustainability and Supplier Diversity

Una's supplier portfolio includes options that support sustainability and supplier diversity goals — making it easier to meet organizational commitments in these areas without running separate sourcing events for each indirect category.

How a GPO Fits Into Your Procurement Strategy

This is where the question gets more nuanced and where procurement leaders sometimes have legitimate concerns about GPO partnerships. The most important thing to understand is that a GPO is a supplement to your procurement strategy, not a replacement for it.

Your internal procurement team should own the categories that are most strategic to your business — the direct spend categories, the supplier relationships that differentiate your product or service, and the sourcing initiatives that require deep organizational knowledge. A GPO is most effective in the categories where individual purchasing volume is relatively low, where category expertise would be expensive to develop internally, and where the cost of running a full sourcing event isn't justified by the spend volume involved.

In practice, that typically means indirect spend categories: office supplies, shipping, food service, facilities, IT peripherals, uniforms, travel, and similar. These categories are essential for operations but rarely strategic in the sense that they differentiate the business. They're also exactly where collective buying power delivers the biggest relative advantage.

"The right GPO understands that they are a supplement and that they want to come alongside their C-Suite strategy."

— Anthony Clervi, Founder & CEO, Una

For a full framework on integrating group purchasing into a broader procurement strategy including the eight components of a robust strategy and how a GPO supports each one, see: Transforming Your Procurement Strategy With Group Purchasing.

Is a GPO Right for Your Business?

Group purchasing tends to deliver the most immediate impact in three situations: organizations with lean procurement teams that need to extend their reach without adding headcount; businesses with significant unmanaged indirect spend in common categories; and organizations that need to deliver cost savings quickly without the time and resource investment of running full sourcing events.

If you're unsure whether Una is the right fit, the starting point is a discovery call and a free cost analysis. Una's Sourcing Advisors benchmark your current pricing against Una's contract terms category by category, so you see the actual savings potential before making any commitment. There's no obligation to proceed, and membership is free if you do.

To learn more about what membership includes and what to expect from the onboarding process, see: How to Get the Most Value Out of Your GPO Membership.

Ready to find out if Una is a good fit for your procurement strategy? Reach out to our team of Sourcing Advisors. We'd love to learn about your needs and identify where you can save.