What is a Group Purchasing Organization (GPO)? We’re so glad you asked! A group purchasing organization is an entity that combines the buying power of multiple businesses to negotiate better prices and terms with suppliers.

GPOs allow members to access discounted goods and services by leveraging their collective purchasing volume. These organizations act as an intermediary between buyers and vendors to secure better deals than individual companies could achieve alone.

How Group Purchasing Organizations Help Businesses

Most small business owners often pay retail rates for office supplies and materials. They don’t have large-scale buying power or skills to maintain better rates. As small businesses grow, retail pricing strains their working capital. They must learn to optimize cash flow and manage increasing costs. This is where group purchasing organizations come into play.

A group purchasing organization helps small businesses leverage collective buying power. This helps businesses leverage buying power for discounts from retailers and suppliers. When you belong to a GPO, you don’t need to buy in bulk or supplement an entire procurement organization. Most businesses prefer GPOs, including industries like technology, financial, legal or manufacturing.

It helps reduce costs and gives a boost to the supply chain. Group purchasing organizations are like big-box membership clubs. But you don’t need to give them any membership fees or a warehouse facility.

History of Group Purchasing Organizations

Group purchasing organizations are vital partners for businesses or associations seeking competitive advantages within their industry. In the past, tailored for the healthcare industry, GPOs streamlined procurement for doctors and hospitals. This ensured that healthcare professionals could get the best prices.

Today, GPOs serve diverse industries beyond healthcare. They offer consolidated purchasing power that boosts profitability across sectors. GPOs leverage an extensive network of suppliers and negotiate terms, so businesses of all sizes grow.

This allows companies to focus on growth initiatives. GPOs do so while also using cost-effective procurement strategies. That means businesses get quality and quantity at the best price!

What Do Group Purchasing Organizations Do?

As previously mentioned, GPOs operate by combining the buying power of many businesses. They negotiate contracts with suppliers to secure competitive prices and favorable terms. Members of GPOs benefit by accessing these contracts to buy a variety of goods at reduced costs.

GPOs work in an organized manner, which includes the following terms:

Negotiates Contracts with Suppliers

Group purchasing organizations work with suppliers to negotiate contracts for their members. By aggregating purchasing volume, GPOs can secure better pricing from suppliers. GPOs also negotiate better terms than individual businesses could get on their own.

This maximizes savings and benefits for all participating members.

Purchasing Goods and Services

Another advantage is that members can buy goods and services through contracts set up by the GPO. This allows businesses to enjoy discounted rates on essential business products and services.

Benefits of Partnering with Group Purchasing Organizations

Only a business that is a member of a GPO can know how much they are benefiting from it. Here are some of the benefits if you become a member of a group purchasing organization:

Cost-Effective

One of the best benefits you can get from GPOs is cost savings. Businesses can take advantage of bulk pricing! It lowers their cost of purchasing goods and services, enhancing their overall competitiveness.

Increases Business Efficiency

GPOs act as catalysts to streamline the purchasing process and remove any friction. Members can negotiate contracts before purchasing them! This saves time and resources, and businesses walk away with peace of mind.

Access to a Diverse Range of Products

One of the advantages of GPOs is that they offer contracts that consist of a variety of supplies including office supplies, business equipment, operation supplies, promotional products, and more. Members can enjoy a diverse range of products and services.

Lowers Burdens and Stress for Businesses

Being a member of GPOs will take a lot of burden off a business owner’s shoulders. GPOs can negotiate and manage contracts, reducing burden, and relieving stress.

Types of Group Purchasing Organizations

There are two types of GPOs that you can find for your business:

1. Vertical GPOs

Vertical GPOs focus on a niche segment or industry, usually focusing on direct spending specific to markets. Vertical GPOs are typically found in public sector businesses, education and not-for-profit organizations. They often process contracts for business-specific products and services.

2. Horizontal GPOs

Horizontal GPOs focus on multiple industries or market segments, usually targeting indirect spending such as office supplies, IT services, and general business services. Horizontal GPOs are typically used by small to mid-sized businesses across diverse sectors. They often process contracts for commonly needed products and services that apply across industries.

Things To Consider Before Joining a GPO

Becoming a member of GPOs means entrusting significant responsibilities to them. It’s essential to understand key factors before selecting a group purchasing organization. Here are some important key factors to consider when debating whether joining a GPO is right for your business:

Evaluating Membership Requirements

When considering joining a GPO, it’s important to note that each GPO has its own set of membership criteria. This could include minimum purchase volumes fees to join or specific industry classifications. Unlike many GPOs, joining Windfall GPO is absolutely free – there’s no catch, no fees to join and no obligations to buy become a member. Businesses of all sizes and from all industries can realize immediate savings from some of the world’s most recognized brands when they choose to partner with Windfall GPO.

Check the Vendor Supplier Network and Discounts

To be successful, any GPO has to find savings for its members. Group purchasing organizations also need to have a broad selection of suppliers to offer considerable value to participating groups and businesses. The best GPOs will have a rigorous process for competitive solicitation and vetting suppliers.

Windfall GPO prides itself on our strong supplier management. Our ongoing contract evaluations as well as regular communication and collaboration with our suppliers ensures we are bringing our members the most favorable benefits and savings. Windfall actively seeks out partnerships with top vendors that can deliver exceptional business products and services to our GPO members.

Look at Member Support

Another essential component when you join a GPO is the services and expertise behind managing contracts and driving cost savings. There will also be varying amounts of service and support that are available depending on the type of group purchasing organization you choose.

Windfall GPO provides white-glove member care services and continuous support to ensure long-term success. We are committed to providing outstanding customer service to our members. Our US-based Member Care Team can help with program questions, registration assistance and other member needs. Inquiries are answered promptly for an unparalleled personal touch.

Consider the Program’s Reputation and Expertise

Finally, it’s important to consider the GPO’s reputation and the program reviews. Consider the following questions:

  • How long has the GPO been around?
  • What metrics do they offer on how they have helped their members save?

Look for reviews and testimonials directly from members using the group purchasing program to gauge their experience.

Windfall is one of the largest and oldest GPOs in the US, serving more than 10.5M businesses, in over 250 industries with more than $40M in buying power. With over 30 years of experience, Windfall has made it our mission to help businesses of all sizes, from all industries, realize significant cost savings to help them grow and profit.

Choosing a GPO: Why Windfall Is the Right Choice

Now you know the ins and outs of what a GPO is! When shopping for the right GPO for you be sure to remember these key tips. Consider fees, relationships with current suppliers, and discount offers. Are you a business wanting to progress and take off any of the burdens of buying goods and services?

Join a prominent GPO! It is the best business decision you can make to save time, money, and hassle. Windfall is here to assist you along the GPO journey.

Join Windfall today for free!