What is Group Purchasing?

Group purchasing is a business model where a company buys goods or services from multiple suppliers in bulk, or as a group. The group is made up of member businesses that purchase similar or identical products or services. By pooling, member spending, and aggregating demand the group purchasing organization (also known as a GPO) can negotiate more favorable pricing for the products and services the member businesses require to operate their businesses.

What Are the Benefits of Joining a Group Purchasing Organization?

There are several benefits to joining a group purchasing organization (GPO). These benefits include:

1. Increased Efficiency and Savings – By working together as a group, businesses can save money on procurement costs. This can be especially important for small businesses that may not be able to afford to spend a lot on procurement. Group purchasing can also help companies save money on shipping and handling costs, and it can also improve communication between suppliers and customers.
2. Increased Innovation – By collaborating with other businesses, businesses can explore new procurement solutions and technologies. This can lead to new products and services that are more efficient and cost-effective.3. Increased Collaboration – Joining a GPO can help businesses build stronger relationships with their suppliers. This can lead to better deals and increased cooperation between the businesses involved. Additionally, businesses that are part of a GPO can build stronger relationships with their suppliers and can learn about their products and services to make better decisions about purchasing.4. Increased Prioritization – Joining a buying collective gives your small or medium-sized business greater purchasing power and greater prioritization from your suppliers. Suppliers benefit from more business and in return, your business becomes more important to them. The group purchasing organization you are part of gives you more power when it comes to receiving the products you need. This means that you will be at or near the front of the line when it comes to receiving the products you need, compared to businesses that are not part of a group purchasing organization.

What Are Benefits to The Supplier?

Aggregating GPO demand to select suppliers allows suppliers to get more business, and it can also lead to lower prices. The supplier benefits when the business is a part of a GPO because they receive more business and typically receive preferential treatment when it comes to ordering and receiving products. Additionally, suppliers can gain an understanding of the needs of the business and can develop relationships with the business to help meet those needs.

Like to Learn More About How Purchase Power’s Group Purchasing Team Can Help Your Business?

Reach out to a member of our team by emailing us at info@purchasepower.ca or call us at (852) 210-9733. We look forward to earning your business!