Managing a business require excellent time management skills. Owners have to keep an eye on everything from employee satisfaction to customer engagement, but other details don’t have to get lost along the way. This article explains more about group purchasing organizations (GPOs) and the benefits they provide to small business owners.
1. Provide Procurement Partners
Whether purchasing comes from a procurement department or a business owner’s personal preferences, GPOs make it easier to decide where future goods come from. After an owner joins a GPO, the organization uses a provided list of merchants to place supply orders. The experts can also continue using existing sourcing strategies to complement each company established buying plan.
Sometimes business owners think a GPO will overhaul their sourcing plans and potentially upend their management strategy. However, GPOs are more than willing to work with their members to maintain existing management structures as long as they benefit the company. The experts within a chosen organization will help identify what isn’t currently assisting a business and suggest procurement partners that may be more helpful.
2. Result in Better Pricing
GPOs wield the buying power of numerous businesses that partner with each organization. Speaking for so many brands allows GPOs to negotiate better prices and create unique deals that aren’t available to those unassociated with GPOs. Additionally, its focus is on transactions, reducing the likelihood of spending errors that hurt a business’ budget.
3. Reduce Prices
Negotiating prices for future orders takes time and may only sometimes be successful. GPOs contain the power of having numerous companies in their service, which gives them more negotiating strength to reduce prices for standard bulk orders. It’s a significant benefit for small business owners because it generates more revenue to reinvest elsewhere.
4. Streamline Purchasing Categories
Business owners often place their suppliers in distinct categories to gauge which brands give them the most savings. GPOs save time by filing suppliers into groups for their members. They also check each new purchase with the verified savings history to determine when buying supplies elsewhere may be more cost-effective. The savings history will always be up-to-date without costing owners valuable time.
5. Increase Business Profits
Any extra savings provided by a GPO directly results in increased profits. Business owners can use those profits to grow their emergency savings or invest in cyber attack preventative measures to protect their company from modern threats. Every extra penny counts for small business owners, especially those just starting their brand.
6. Establish Network Opportunities
When a company joins a GPO, the owner isn’t just in contact with a GPO representative. They can also access the other business owners within the organization to network. Sometimes GPOs schedule exclusive networking events to bring professionals together from various industries and learn from each other.
These events aren’t available to non-members, making them an exclusive benefit of GPO membership. Business owners can network with other entrepreneurs to learn things like budget improvements, sourcing tips and mistakes that turned into learning opportunities. Those moments could result in growth that wouldn’t have been possible without meeting those people through GPO-sponsored events.
7. Often Have Free Memberships
Some GPOs have free memberships to assist new business owners who don’t have extra revenue to spend. Joining a free organization provides these benefits without placing stress on a professional budget. When the owner feels financially able, they can always join a paid membership GPO with more extensive networks to access even more incredible savings opportunities.
8. Come With Extra Services
Sometimes, small business owners believe GPOs only help with procurement contracts, but that is not true. The organizations also offer additional services, such as consulting or auditing. Using a GPO’s auditing services could relieve an owner’s stress after an expansion because it would ensure the company’s compliance with local and federal regulations.
Obtaining extra peace of mind makes business ownership much more enjoyable. When considering joining a GPO, every entrepreneur must review the organization’s additional services to decide which membership would be most beneficial.
9. Lower Purchasing Risks
GPOs want to provide the best service for their members. Doing so results in long-term relationships and longevity for the organization, so reducing purchasing risks is a priority for many GPO procurement leaders.
These organizations take vetting seriously when adding new vendors to their roster of suppliers — the GPO’s reputation is on the line when they recommend new vendors. Members may feel more comfortable working with GPO suppliers because the vetting process reduces purchasing risks like buying from inexperienced brands or companies with unprofessional histories.
10. Include Vendors of All Sizes
Casting a wider net of professional relationships can result in better procurement. Business owners may find unique products available through their GPO connections. GPOs have links to national and international brands, but many also value working with regional companies.
Business owners can work with minority-owned vendors or regional suppliers to order supplies or merchandise that isn’t available through other contracts. It also lifts local suppliers to get them more exposure, which results in more funding and availability for future orders from those companies. Each business owner would benefit from the opportunities presented by GPO-membership connections.
11. Improve Supplier Relationships
Suppliers often provide better service and prices to business owners who maintain positive relationships with them. However, it’s challenging to do that while starting a company or growing a brand. A GPO becomes the influence maintaining supplier relationships by directly communicating with them so business owners can focus on buying their next property or improving their existing business plan.
12. Save Business Owners Time
Delegating can be challenging, but GPOs might make it easier for business owners to help their brands succeed without experiencing burnout. GPOs handle all supplier communication and contract negotiations, so business owners have more time for other management responsibilities. Depending on the organization, a GPO membership can also include fulfillment and distribution issue processing.
Learn More About GPOs
Small business owners looking to grow their companies without overexerting themselves can join GPOs to experience these potential benefits. They could save more money and time by delegating purchasing responsibilities to the GPO of their choice. It depends on what each owner needs and if they’re ready to make this potential step in their career.