GPO’s (Group Purchasing Organizations) have been around for about 10 years primarily into the medical business. The fundamental notion of a GPO is several companies can come collectively and get services and products cheaper than any solitary company can. This model may or may not be good for the Coca-Cola’s, Wal-Mart’s, or Johnson & Johnson’s worldwide, but they are perfect for the little to medium size business simply because they enable the little dudes to purchase their products or services from the rebate degree of these huge corporations.
As companies are expanding and products are being developed, we have been seeing GPO’s spread into the education, publishing, workplace materials, and consumer services and products areas. Makers are willing to reduce their margins and deliver services and products at low cost for amount of consumers the GPO’s offer. Generally in most situations GPO’s can help to save companies anywhere from 20% – 40% off their already competitive rates.10
GPO’s are exclusive to members which means that your company would spend an account fee to be part of the wholesale purchasing group.
a couple of things to think about before becoming a member of a GPO.
1. Know what and how a great deal you’re purchasing over summer and winter for your business ex. (Brochures, catalogs, envelopes, forms, paper, ink cartridges, etc)
2. think about the account costs versus your present price together with cost savings the GPO would deliver. If you are purchasing 500 business cards or 1,000 envelopes a-year then a GPO could possibly cost more income than you would save your self.
On the whole a GPO is a great way to efficiently reduce price and never having to compromise quality or service.