In modern business one of the most important aspects of your continued success is a functional and responsive supply chain. Not having access to the materials and products you need for day-to-day business tasks can easily put a financial strain on any company. However, if you’re a small or midsize business finding suppliers and contracts to fit your business needs can be challenging. A fair amount of your company budget can easily be used for supply needs and third-party contracts between costs and economies of scale.
These supply challenges are why many companies in various industries join a group purchasing organization. When you work with a GPO you gain a lot of advantages in the business marketplace that can reduce costs and increase efficiency. If you are unfamiliar with the benefits of working with a GPO here is a brief explanation of what a GPO is and why you’d want to work with one.
What Is a GPO?
A group purchasing organization or GPO is a service provider that helps companies with their purchasing needs. GPOs are often found in the medical profession but can also be found in other specific industries or for generalized supplies used in many industries. GPOs assist their clients by locating the best deals with product suppliers, negotiating the price, and also providing relevant industry news, so their clients are well aware of any concerns.
The Advantages a GPO Offers
When you join a GPO there are many advantages you gain by being a client alongside several other companies and businesses. Four of these advantages include the following.
- Lower Costs: one of the key advantages of a GPO is you pay a lower cost on your item and supply purchases. Many sellers offer bulk discounts for purchases of a certain size and frequency. However, many smaller companies simply cannot afford (or do not need) that much of a particular item. With a GPO a more affordable bulk purchase can be made and divided among various companies. This can also make prices more predictable.
- Access to Valuable Information: GPOs often have long-established relationships with various suppliers and third-party companies. Many GPOs report industry trends and news to their clients meaning that you are not only aware of any industry changes but also prepared for areas where issues can arise.
- Increased Efficiency: for many companies having to manage various contracts and supply chain needs takes a great deal of time and effort that could be used on more mission-critical needs. With a GPO you have industry experts managing your supply chain needs and making the process far more efficient.
- Networking Opportunities: when you’re part of a GPO you are part of a larger group of companies each with similar needs, in some cases, you may even be in the same industry especially if it’s a specialized GPO. This can offer networking opportunities and even if this is simply an exchange of information this can be very beneficial to your business and future strategies.
Finding a good deal on essential supplies and suppliers you can trust can be a hurdle for many midsize and small businesses as some of the best suppliers tend to work with larger corporations. By joining a GPO you gain access to the types of deals and features enjoyed by multinational corporations. Being in GPO gives you the purchasing power you and your fellow GPO members would not have on your own. This gives you access to the features and supply chains enjoyed by industry leaders. This makes getting the supplies you need easier and saves you work and money in the long run.