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.

→ Watch: GPOs Explained — you'll never look at a jar of mayo the same way.

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.

Supplier Relationships Matter

A great GPO will have strong relationships with top suppliers. Una has spent years developing partnerships with high-performing, culture-driven suppliers that are typically out of reach for most businesses, serving as the gatekeeper that connects members to the best enterprise-level contracts available. 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.

Save 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 (and Why It Matters)

There are some GPOs that charge a membership fee, while others collect admin fees from suppliers instead. It's important to ask for that information upfront so you're completely aware of how your GPO makes money and whether its incentives align with yours.

Una never charges a membership fee. Every time you purchase through Una, we get paid a fee by the supplier because the negotiated committed volume is more efficient for major suppliers and they want our business to reach their customers. We use that fee to finance our services, allowing us to keep membership free for members. Simply put, we make money by saving you money.

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

Is a GPO Right For Your Business?

Group purchasing tends to deliver the most immediate impact in specific situations. Before committing, three questions help determine whether a GPO is the right move:

Are you set on a specific supplier?

If your organization has its heart set on a particular vendor, you may not be able to leverage GPO contracts; each GPO has a unique portfolio and may not carry an agreement with your preferred supplier. However, the best GPOs have partnerships with the industry's top suppliers, which makes this a good initial qualifier. If you're looking for the best overall savings in a category rather than from one specific supplier, group purchasing is likely a strong option.

How much leverage does your organization have?

If your category spend isn't high enough, many top suppliers won't consider negotiating with you independently — especially without an existing relationship. When you join a GPO, you join a group of buyers, so your buying power increases regardless of your individual category spend. You don't have to purchase in higher volume to access the best discounts.

How much time do you want to invest in supplier negotiations?

Does your procurement team have the bandwidth to run another evaluation, negotiate another contract, and manage one more vendor? Adding a GPO to your purchasing strategy eliminates those steps for indirect categories: no RFP required, agreements are pre-negotiated, and you can get connected to new suppliers quickly. It doesn't have to be either/or either: a good GPO is never exclusive, which means you can negotiate key strategic contracts directly while leveraging pre-negotiated agreements for lower-volume or lower-priority categories.

Finding Value Beyond Cost Savings

When choosing the right group purchasing organization, consider how it offers value beyond cost savings:

• Speed to savings: pre-negotiated contracts eliminate the RFP process entirely for covered indirect categories, reducing procurement timelines from months to days or weeks
• Time savings: supplier discovery, assessment, and negotiation are already handled; procurement teams reclaim weeks or months previously consumed by sourcing events
• Effort savings: getting indirect and tail spend under control often sits in the too-hard basket for years; a GPO makes it suddenly achievable
• Supply chain management: procurement consulting, category management, and analytics are included as part of the membership relationship
• Vendor accountability: the GPO monitors supplier performance and ensures vendors keep up their end of the bargain

Una members report a 97% customer retention rate which is a reflection of how much procurement teams value having a partner that consistently saves them time, effort, and money across categories.

How a GPO Fits Into Your Procurement Strategy

Any group purchasing organization you work with should come alongside and complement your existing sourcing strategy as a true partner — not compete with it or replace it. Group purchasing isn't the end-all-be-all and your GPO should know that.

At Una, we advocate for a comprehensive procurement strategy that incorporates a number of different sourcing options depending on your current structure, short-term challenges, and long-term objectives. The GPO's main goal is to provide immediate value in non-strategic spend, then over time look for additional ways to add value in reporting, data transparency, supplier accountability, and new categories.

"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

In practical terms: adding a GPO helps you create a well-rounded procurement function while getting assistance with strategy, contract negotiation, and supplier relationship management. Your time is freed to focus on the categories and relationships that require your deepest expertise.

For a full framework on integrating group purchasing into a broader procurement strategy, see Transforming Your Procurement Strategy With Group Purchasing.

What You Can Do With the Time a GPO Saves You

Apart from the boost in cost savings and efficiency that group purchasing delivers, there's an equally important question to consider: what will you do with the time saved? When a GPO takes over the heavy lifting of indirect spend management, procurement leaders consistently find capacity for higher-value work they never had time for before:

• Deepen strategic supplier relationships: build the long-term partnerships that create competitive advantage and drive innovation
• Improve stakeholder engagement: connect procurement's work to business objectives in a way that elevates the function's profile across the organization
• Focus on category strategy: concentrate on the top 20% of spend categories that require genuine expertise and internal ownership
• Build and upskill your team: invest in developing procurement capability rather than managing tactical purchasing
• Lead sustainability and supplier diversity initiatives: with tactical work handled, there's capacity for purpose-driven programs that create social and environmental value

A GPO won't make you look irrelevant, it gives you the capacity to become genuinely strategic. Think of it as adding a powerful tool to your procurement toolkit: the best procurement professionals use every tool at their disposal.

How Una Can Help

Una is on a mission to increase organizations' profitability using group purchasing. Our process is simple:

1. Discovery call: a 30-minute two-way conversation with a Senior Sourcing Advisor to discuss your goals, identify challenges, set timelines, and determine fit. No obligation to proceed.
2. Cost analysis: Una benchmarks your current pricing against our supplier base category by category, sending your spend data directly to suppliers to identify savings. If our contracts would yield additional savings, we can connect you within days or weeks.
3. Supplier connection: Una's pre-negotiated contracts are already in place. Sourcing Advisors walk you through the supplier catalog, recommend best-fit suppliers, facilitate introductions to National Account Managers, and assist with any contract questions.

Throughout the entire process, you remain in control guiding each conversation based on your desired outcomes. Una membership is always free, with no purchasing requirements. For a deeper look at what membership includes and what to expect from onboarding, see: How to Get the Most Value Out of Your GPO Membership.

For a full breakdown of how to evaluate GPO options side by side, see: The GPO Evaluation Playbook.

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 we can help.