Group Purchasing Organizations (GPOs) provide significant purchasing power to small businesses by aggregating their spend with similar entities. As you consider the merits of joining a GPO, here are some factors that could help with your analysis.
GPOs aggregate the spend of multiple companies and properties, providing members with significant leverage, and the purchasing power of a much larger organization.
Savings on time and resources
GPOs use their resources to find the most favorable vendors and offerings based on your needs and requirements, allowing you to allocate your time, efforts, and resources elsewhere. Utilizing historical data and market information they can also negotiate the most competitive pricing benefits on your behalf.
Relationship with suppliers
Your ability to build a good rapport with supplier partners is critical in the world of procurement, and when it comes to effectively managing your properties. Relationships, and commitment are strong factors that suppliers consider when offering discounts, rebates, and/or incentives. Building supplier partnerships and establishing a plan takes time and resources, and GPOs have multiple resources that focus on this 24/7.
Networking and shared knowledge
When you become a GPO member, you join with thousands of other multifamily properties that share purchasing power across similar products and services. You can also stay more informed, and abreast of significant industry trends in the market.
Customer service and problem solving can be an enormous challenge when dealing with multiple vendors. By partnering with a GPO, you will have access to a dedicated Account Manager that can perform multiple tasks on your behalf, such as troubleshooting, bid solicitations, analytics, training, and others.
Complimentary spend analysis
GPOs will generally offer a complimentary spend analysis report to determine how they can help you save time and money. These reports provide historical purchasing trends and related costs, as well as actionable data to guide planning, resulting in more effective purchasing outcomes.
While joining a GPO is an individual choice based on the need of the organization, the benefits of being part of a purchasing group far outweigh any cons. Even a small membership fee. It is always encouraged to reach out to the GPO you’re considering to have a conversation with them about their offerings and if membership in their organization is the right fit for you.