The Benefits of Group Purchasing
Collective or group buying is not a new concept, but may be new to you and your organization.
Imagine if agencies could pool their resources in order to get the benefits that buying in bulk from suppliers can provide them. This is collective buying power. But how do you access a service like this?
Most public safety services don’t know all the resources that are already available to them for little or no charge at all.
In most cases, the purchasing in your organization is being handled by people who are already doing three other jobs at the service and do the buying in their "spare" time. This gives you little, if any, time to do any real pricing comparisons, much less time to go out and develop your own RFP in order to fulfill your three-bid process.
This is where a Group Purchasing Organization (GPO) can assist. GPOs facilitate contracts with suppliers for dozens or hundreds of companies at once, meaning they are able to offer cost savings to their members on purchases they already make.
Are you sure that your local salesman is giving you the price that you deserve on things you purchase every day for your facility? A GPO can provide you discounts on the products you already purchase regularly, sometimes from multiple suppliers. GPOs have pre-negotiated contracts that you can simply tap into.
GPOs work as an extension of your purchasing department and as an additional resource for efficient sourcing, supplier and contract management. Not only can GPOs leverage the combined purchasing power of multiple agencies, they can also bring balance to the negotiating equation because they already have relationships with vendors and suppliers.
“We have found that by using a GPO we are saving more and more money every day,” says Christopher Montera, Assistant CEO of Eagle County Paramedic Services. “Don’t think that you are too big or too small to use the help a good GPO can offer. We are a medium size service and thought we were getting pretty good deals from our vendors on our own, it turns out, we learned this lesson the hard way. Our GPO is free to use and supports our state association as well. It is a real win, win for everyone.”
So how do you find the right GPO partner?
It is important to find the right match to maximize your savings because not all GPOs are created alike. Ask if they specialize in your type of business. Do they support your industry? Do they require that you give them all of your business in order to participate? What are the annual fees?
It is also key to not overlook your flexibility. Make sure that you are not getting tied down to an agreement that is not good for you. Ask questions and learn all of your options.
GPOs can also assist more than just the individual service.
Associations are uniquely designed to provide incredible education and networking opportunities for your members, but the value doesn’t have to stop there. Many forward-thinking associations want to provide membership discounts with efficient and standardized purchasing options for all their members. GPOs can provide easy and lower-cost access to products and services while helping the association increase its value proposition and membership retention.
Mickey Schulte is affiliated with Savvik Buying Group. Interested in learning more? Contact Mickey at mschulte@savvik.org.
