Purchasing Direct VS Through a GPO

Businesses everywhere are looking to improve their purchasing processes and find hidden value within their supply chain. When trying to get the best Purchasing Value there are two schools of thought. Negotiating contracts directly with suppliers or utilizing group purchasing.

So, Which purchasing strategy is best? 

The purpose of a GPO is to leverage the committed volume of thousands of companies to secure deep discounts. Yet, When you join a GPO, you retain purchasing control since members order based on individual needs.

That all sounds great, doesn’t it? GPOs should be on any sourcing manager’s radar, but that sourcing manager will also have quite a bit of research to do.

Overcoming Decision Paralysis

Too much choice can be overwhelming. Unfortunately, this often is the case with finding a GPO that best fits your needs, as there are simply so many of these organizations and buying services out there. 

Where does one even start?

To reduce costs, or become a supplier in our network, feel free to reach out to us today to see how we can help your business grow. You can use the calendar link here to schedule a time to chat with one of our representatives. 

Where does one even start?

To reduce costs, or become a supplier in our network, feel free to reach out to us today to see how we can help your business grow. You can use the calendar link here to schedule a time to chat with one of our representatives.

Ultimately, you want to treat the GPO like a supplier. And you don’t want to put yourself in a position where it’s all or nothing with one group purchasing organization.

One tried and true avenue to create savings is the utilization of Group Purchasing Organizations. GPOs are a quick way to save because they connect clients with the suppliers the GPO has already partnered with. They have done the heavy lifting of identifying the best providers in their respective industries and then negotiating a deep discount. A GPO is an entity created to combine the purchasing power of a collective of businesses to leverage better pricing and service with desired suppliers.

The idea is that we pull together all of the customers’ expenditures to qualify for discounts and rebates that they otherwise wouldn’t be able to achieve independently.

If we continue to use our example before of being a company that owns a fleet, that fleet will need repairs, fuel, and maintenance. If you are a smaller business, you may not have the purchasing power to qualify for rebates from large suppliers. If you were to need new tires, you would be stuck buying them at retail value.

However, if you were to join A GPO, your company’s spend is combined with all other clients participating in that GPO program. Here you qualify for better discounts and better service due to that now improved purchasing power.

By leveraging pre-negotiated contracts with leading suppliers to source the products your organization uses every day, you benefit from the best possible pricing and service levels. It’s the ideal solution to get everything you need to optimize control of your indirect spending.

To reduce costs, or become a supplier in our network, feel free to reach out to us today to see how we can help your business grow. You can use the calendar link here to schedule a time to chat with one of our representatives.

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