5 Things to Look for in a Group Purchasing Organization

When you hear about group purchasing, most of us think of visiting our local wholesale club –Sam’s, Costco, BJ’s – and buying our favorite products in quantities that we may never actually use. But the reality of a group purchasing organization (GPO), is something much more useful. It goes like this: According to some well-known group purchasing organizations (GPOs), their business model goes back to at least the 1700’s. They were (and in some cases, still are) called cooperatives, and one of the first was founded by Benjamin Franklin. Franklin’s co-op was an insurance company where members all shared the risk. The model was such a good idea that it stood the test of time. That’s right, dear multifamily reader – group purchasing is still around today (and so is Franklin’s cooperative). While a lot has changed, the premise is still the same. A single organization will negotiate contracts with vendors to provide discounted prices. Then it will provide those prices to its members, promising the vendors higher sales. Beyond that is where the nuances begin, from industry-based GPOs to subscription fees. Regardless of the details, joining a GPO is a money-saver, and that’s something your organization can take to the bank. So now that you know what a group purchasing organization is, why join one? Here are five good reasons. 1. Your company will save money This one is obvious. Joining a group purchasing organization, by definition, will actually save you money on thousands of items. Even if you think you have a great discount with your favorite store, it’s probably not as great as you think, especially if you’re the only one who’s in on it. By rule, the more buyers, the less something costs. 2. Fewer “errand” trips Most 21st century GPOs operate with an online component. That means you can order online and the item shows up at your door. There’s no driving, parking...