GPO's (Group Purchasing Organizations) have been around for about ten
years primarily in the healthcare industry. The basic concept of a GPO
is that a group of businesses can come together and buy products
cheaper than any single company can. This model may or may not be
beneficial for the Coca-Cola's, Wal-Mart's, or Johnson & Johnson's
of the world, but they are great for the small to medium size business
because they allow the little guys to buy their products on the discount
level of one of these huge corporations.
As
industries are expanding and products are being developed, we are
seeing GPO's spread into the education, printing, office supplies, and
consumer products fields. Manufacturers are willing to cut their
margins and deliver products at wholesale prices for the volume of
customers the GPO's offer. In most scenarios GPO's can save businesses
anywhere from 20% - 40% off their already competitive prices.
GPO's are exclusive to members meaning that your business would pay a membership fee to be a part of the wholesale buying group.
Two things to consider before becoming a member of a GPO.
1.
Know what and how much you're buying throughout the year for your
business ex. (brochures, catalogs, envelopes, forms, paper, ink
cartridges, etc)
2. Consider the membership fees versus your
current cost and the savings that the GPO would deliver. If you are
buying 500 business cards or 1,000 envelopes a year then a GPO would
probably cost you more money than you would save.
All in all a GPO is a good way for you to effectively cut cost without having to compromise quality or service.
