Empowering Procurement To Do More With Group Purchasing
Una is on a mission to empower procurement leaders like yourself to save more money, time, and effort. We do this by giving you the tools and resources you need to elevate your existing procurement strategies with the power of group purchasing.
The Complete Guide to Group Purchasing is a tool designed to explain group purchasing, simplify the procurement process and empower you, the Sourcing Hero, to form an overall procurement strategy that meets and exceeds your business goals.
This guide covers the basics of group purchasing, how a GPO can work to complement your procurement efforts, and highlight the type of service you can expect when working with Una.
Download a full PDF copy of this guide and be empowered to make the best sourcing decisions for your organization.
Introduction to Una
As a group purchasing organization (GPO), Una partners with the best suppliers to provide businesses access to unbeatable savings on essential products and services. This is done all in the name of forging new relationships and embarking on a path to procurement success.
Our brand promise is to empower procurement teams and accelerate their profitability. Simply put, we work to save you money, time and effort.
Our goal is to simplify procurement, increase cost savings and deliver value through increased buying power, comprehensive savings solutions and superior service.
Download a copy of our value sheet to learn more about the power of group purchasing and Una.
What is a Group Purchasing Organization?
A group purchasing organization (GPO) is an entity that leverages the collective buying power of its members to secure discounted prices on the goods and services they need to run their businesses.
Any business, regardless of size, can take advantage of the GPO’s purchasing power and access pre-negotiated contracts with some of the nation’s top suppliers and retailers, saving big on their portion of spend.
Partnering with with a group purchasing organization paves the way for procurement leaders to utilize purchasing solutions that elevate their existing procurement strategies, increase cost savings, and refine their overall approach to spend management.
GPOs tend to be procurement’s best-kept secret – until now!
The accompanying resources you’ll find throughout this guide are committed to educating and empowering procurement. Read and click through to learn how to save more money, time, and effort – and even simplify your procurement program – by exploring the concept of group purchasing.
Learn how to best work with a group purchasing organization, and what to look for when it comes time to choosing a GPO partner.
GPO Explainer Video
This quick video explains the group purchasing concept and how a GPO like Una works.
Take a look - you'll never look at a jar of mayo the same way again!
History of GPOs
The first group purchasing organization was established in the healthcare industry in 1910. Growth was slow at first with the number of healthcare GPOs reaching only 10 by 1962. There were approximately 40 GPOs by 1974 and that number nearly tripled by 1977 as medical costs and scrutiny increased.
Soon after, the GPO model caught on in other verticals like the business, hospitality, and non-acute healthcare segments.
GPOs succeed in reducing procurement costs by aggregating the demand for non-strategic, or indirect cost supplies and services, used by a broad number of member organizations. The consolidation of purchasing power and the GPO’s ability to establish contracts achieves preferred pricing, terms, and service standards for their members.
Why Group Purchasing?
The group purchasing method of sourcing motivates suppliers to give GPO members discounted pricing.
Most businesses only spend a modest amount in a particular category, like office supplies or parcel shipping. Because purchasing is all about volume, you end up paying more since you only need a small quantity.
Joining a GPO allows you to leverage the collective buying power of a group of people, meaning you can take advantage of those larger discounts without actually purchasing more.
The heavy lifting is already done – there are negotiated contracts with top suppliers are already in place.
Types of Group Purchasing Organizations
There are two main types of group purchasing organizations:
Horizontal GPOs serve organizations spanning all markets and industries. This type of GPO works with businesses of all kinds, offering assistance on a broad spectrum of goods and services, mostly related to indirect spend.
Vertical GPOs serve a niche segment of industry, 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 segments.
Average Cost Savings
Una members save an average of 18-22% on products and services needed to run their businesses by using group purchasing.
See how much you could be saving by using Una’s free cost savings calculator tool.
Simply enter your spend amounts and get an instant quote based on actual contract terms and conditions.
What You Need to Know About GPOs
By developing a holistic approach to procurement that includes group purchasing, you can reclaim your valuable time, find new cost savings, and focus on leading your team.
Let’s start with the basics.
How Group Purchasing Organizations Work
Group purchasing organizations leverage the collective buying power of their members to obtain volume discounts from suppliers and retailers. Any business can join a group purchasing organization and take advantage of a “strength in numbers” concept when purchasing goods and services.
When you join a GPO, your collective buying power increases, which means you join forces with a group of consumers to leverage the GPO size in exchange for discounts.
The best GPOs will have strong relationships with the world’s top suppliers. Una has spent years developing partnerships with high performing, culture-driven suppliers that are typically out of reach for most businesses. We happily serve as the gatekeeper, connecting our members to the best enterprise-level contracts available.
While some GPOs charge a fee, membership with Una is always free. Once you’re signed up, you have access to all of our supplier contracts and business savings can be achieved in just a couple week’s time.
This GPO comparison chart has proven to be a great resource for procurement professionals who are still researching GPOs and deciding which partner is the best fit.
We've also included additional information about Una so you can get a clearer idea of what membership entails and how we work to complement your existing procurement strategies.
How GPOs Fit Into Your Procurement Strategy
Before joining, consider how a specific GPO will offer value beyond cost-savings. Are you saving time, or are you still having to negotiate terms with suppliers? Are the supplier contracts offered to you better than what you can get through your own effort?
Is group purchasing even the right solution for your business?
There are many ways to operate a successful procurement program. At Una, we encourage a diversified approach to sourcing where group purchasing enhances the values that drive your business. As your GPO partner, we will always be forthcoming about our role, where we fit, and where we don’t.
How Group Purchasing Organizations Make Money
Typically, GPOs make money by collecting participation fees from their members, collecting administrative fees from the suppliers or a combination of the two. The membership fee may be a one-time thing paid upon joining or a set fee collected on an annual basis.
At Una, our membership is always free to join and free to use.
Every time you entrust your purchasing needs to Una, we get paid an admin fee by our suppliers. The negotiated committed volume Una brings to the table is much more efficient for major suppliers and they want business to reach our members.
In turn, we use the administrative fee to finance our services, allowing us to make and keep membership free for our members.
When researching GPOs and their pricing structure, we recommend working with one that is completely transparent about the way they conduct business and what they expect of their members when it comes to fees and purchasing volume.
What to Look for in a Group Purchasing Organization
Entering into a new business relationship is a big deal and forming a true partnership that is mutually beneficial takes time. Selecting the right GPO to work with is an essential step in developing new comprehensive sourcing strategies.
Here are things to look for when deciding to partner with a group purchasing organization.
Find a GPO that offers complete transparency when it comes to membership, pricing or fees associated with joining, purchasing expectations, and the supplier partners they work with. The direct point of a GPO is to deliver instant value but a GPO focused on members will allow for flexibility and autonomy. Most importantly, be comfortable with the details of how everything works upfront so there are no surprises on the back-end after purchasing begins.
Analyze your organization’s culture and work with a group purchasing organization that mirrors your own values. The right GPO will spend a lot of time validating suppliers to make sure they’re a good fit, which in turn makes it a win-win situation for your organization.
Your GPO should connect you with a contract quickly, allowing your business to start saving within days or weeks versus months. Pre-negotiated contracts exist so the procurement process can run faster and more efficiently.
A GPO should help you buy smarter and understand what it is you really need by taking an active advisory approach, listening to your pain points and leading you to solutions. If done right, they will find a resolution whether it’s something they offer or not.
When choosing the right GPO partner, make sure they know their place in your overall procurement strategy. GPOs are a supplement to come alongside the C-Suite strategy. Group purchasing isn’t the end-all-be-all and your GPO should know that.
Your GPO’s main goal should be to provide immediate value to your non-strategic spend and then over time, look for additional ways to provide value in other categories or, better yet, in areas like reporting function, data and supplier transparency and accountability.
Download our playbook on how to maximize your GPO relationship.
Misconceptions About Group Purchasing Organizations
Whether you’re new to the concept or are a GPO pro, you’ll run into objections when introducing a new sourcing strategy that includes group purchasing.
Prepare for those tough conversations with these resources that debunk common misconceptions and offer up solutions to overcoming objections:
- Group Purchasing FAQs
- GPO Checklist
- 10 GPO Myths Debunked
- Benefits of a Group Purchasing Organization
- The Truth About Group Purchasing Organizations
Be sure to visit Unaversity, Una's online resource center dedicated to empowering procurement.
Download a full PDF copy of this guide and be empowered to make the best sourcing decisions for your organization.
Your Partner in Procurement
No matter the circumstances, group purchasing can be used as a way to reduce costs and free up your time to further develop your procurement strategy. GPOs are designed to save you money, time and effort.
Group purchasing is procurement’s best-kept secret. Being able to obtain savings (sometimes up to 80%) on products and services you need to run your business is an incredible advantage.
At the end of the day, your GPO of choice should act like an extension of your procurement team that ultimately improves your bottom line.
The Una Difference
Each organization has its strengths and many have unique product offerings in addition to the benefits of group buying power.
Una’s people, our values, and our community engagement set us apart. Our passion lies in being value-driven, member-centric, partner-focused, and committed to educating, advising, and enabling businesses to achieve tremendous savings.
From dedicated account managers and personalized consulting to spend analytics and supplier management, membership with Una is all-encompassing and supportive every step of the way.
Join now and find your true partner in procurement.
Be empowered to take advantage our increased buying power, comprehensive savings solutions, and superior service today.
