Whether you are just starting out in business or have experienced many years of success, you will consistently have questions. At the top of that list may be: “How can we increase profits?”
You can approach your bottom line in two ways: you could develop marketing strategies to increase your sales, or you could reduce your expenditures. However, rather than approaching your business goals with an either/or methodology, joining a group purchasing organization (GPO) could help you do both.
How would a buying group benefit you?
There is power in numbers. A buying group might benefit your business through:
- A support system. Trade associations, lobbying organizations and industry bodies often join together to support the business interests of the members of their group.
- Time savings. Purchasing a variety of supplies through one place increases your buying efficiency, saving time in the process.
- Reduced costs. When small businesses come together to buy goods or services, it increases your group purchasing power. Buying in bulk can allow you to purchase items at a lower cost and can also save you money on your freight and delivery fees.
As part of a GPO, you may not be able to continue purchasing through one of your preferred vendors. However, being able to save money on payroll or maintenance services, in addition to securing lower purchasing prices on your supplies, may provide enough of a benefit to offset any exclusive supplier contracts you hold.
If you consider joining a buying group, look for one that specializes in your industry. You may find that becoming part of a group that aligns with your interests provides even more benefits than the financial boost you initially sought.