Redefining the Group Purchasing Organization Business Model
By Mackenzie Oakley | March 24, 2022
The concept of group purchasing is not new. In fact, the first group purchasing organization was formed well over a hundred years ago, rising to prominence within the healthcare industry. GPOs first started out as a way for hospitals, nursing homes, pharmacies and acute-care agencies to secure discounted pricing on the products and services needed to run their facilities.
Since 1910, the number of healthcare GPOs in the United States has skyrocketed thanks to the inception of Medicare and Medicaid and correlating legislation efforts. It’s now estimated that nearly 98% of all acute-care and community hospitals within the US have at least one GPO membership. Likewise, approximately 97% of not-for-profit, non-governmental hospitals also participate in group purchasing.
Group purchasing, often referred to as cooperative purchasing in the public sector, is popular there as well. State and local governments, K-12 and higher education, and nonprofits all benefit from utilizing the group purchasing method of sourcing.
What is meant by group purchasing?
Group purchasing occurs when a collection of buyers pool their purchases together and negotiate discounted prices with vendors and suppliers based on the higher volume of spend. Leveraging the collective buying power of a group of businesses encourages suppliers to offer better pricing based on the committed amount of spend coming from a particular group.
Redefining the group purchasing business model
Group purchasing organizations are entities that do the supplier negotiations on behalf of their members. And more importantly, GPOs have risen in popularity amongst private sector businesses. What was once thought to be only available to healthcare entities and government agencies is now widely accessible to businesses across a broad spectrum of industries.
Any company can obtain a GPO membership and take advantage of established supplier relationships and pre-negotiated contracts, joining hundreds – if not thousands – of other businesses in receiving discounted prices.
From savings to a partner in procurement
The main goal of a GPO is to save their members money. The GPO is able to negotiate steep discounts in a variety of categories including office supplies, shipping and packaging, facilities maintenance, Jan/San and more, and passes those savings along to its members.
Modern-day group purchasing organizations, however, are looking to position themselves as more than a vehicle for cost savings. The GPOs of the 21st century understand the challenges that come along with running a business and the economic factors that make it difficult to grow and succeed.
Today’s GPO is looking to come alongside those business owners and form partnerships that not only deliver cost savings, but create an avenue for innovation, value, and growth.
The Una Difference
Una’s goal is to shatter any previous preconceived notion of the group purchasing organization business model. We do this by providing education and resources designed to simplify the procurement process and empower organizations to find savings solutions that complement and fit within their overall approach to procurement.
In recent decades, procurement has moved from tactical to strategic, and teams are looking for ways to streamline the purchasing process, align itself with the organization’s objectives, and deliver value beyond the typical costs savings. Partnering with a GPO like Una can help you reach those goals.
At the very center of our organization is the notion that we treat your business like our business. We also build relationships based on speed, communication and respect. The Una team understands that in a lot of circumstances, time is money. With our commitment to prompt communication and “keep it moving” mentality, our team delivers at a pace that sets us apart.
Una’s dedicated Sourcing Advisors handle each account with white-glove service, focus on building a strong relationship with our members, and strive to first define what success looks like for them so we’re able to provide exactly it is that you need.
Our core values guide each conversation so trust is built, we keep your best interests in mind, and are always ready to adapt to the ever-changing procurement landscape.
Every business, regardless of size, has the ability to capitalize on the power of group purchasing in a way that increases the speed at which your organization saves money and streamlines the way you procure goods and services.
Better yet, Una membership is completely free of charge, which means there’s nothing prohibiting you from accessing unprecedented savings and a true partner in procurement.
Ready to start saving? Contact our team of Sourcing Advisors to learn more by visiting www.una.com/signup.