Why Businesses Should Partner With GPOs To Manage Purchases And Inventory Costs

There are a lot of important variables that influence the success of any company. One very important factor is how much money you end up spending on supplies and materials. When you are looking to purchase inventory or other items, you can benefit by joining a group purchasing organization, which is commonly referred to as a Group Purchasing Organisations (GPO). There are several benefits of a GPO that can make it a great option for any business.

Take Advantage Of Bulk Discounts

One of the largest advantages that come with being in a GPO is that you can save money through bulk discounts. In majority of industries, suppliers will provide per-unit discounts to companies that put forth large orders. Unfortunately, smaller companies may not have the inventory needed or cash flow to facilitate these larger purchases. If you are part of a GPO, you will be able to combine your purchases with other organizations. This will provide a group mentality and approach to purchasing, which will allow even small businesses to benefit from bulk discounts without having to buy more than they need. 

Receive Improved Repayment Terms

Being able to cut down on your inventory and purchasing costs is always a major benefit for companies. However, having more control over your working capital and supply chain is another advantage of being in a group purchasing organization. When you are part of one of these groups, the increased power you have with suppliers can also help you get more favorable repayment terms. This could allow you to extend the date by which an invoice needs to be paid. This ultimately can help cut down on your working capital costs. 

Reduce Waste

If you are in an industry and have to create a product that uses perishable goods, waste reduction should always be a major goal for your business. Unfortunately, many businesses will find that it is hard to accurately predict inventory needs at all times. This could result in you purchasing more products than you need, increasing waste and hurting your bottom line. When you are part of a GPO, you will have more flexibility when it comes to purchasing needs. This could allow you to make purchases without having to buy more than you need, which can help you avoid the additional costs that come with waste or unnecessary storage. 

Learn About Alternatives

You can also benefit through the use of a group purchasing organization by learning more about product alternatives. If you use a certain supplier for inventory, you may get into the habit of not shopping around. There are always changes to supplier competition, however, and different options to consider. If you are part of a group purchasing organization, you will get to see more about what other products your competitors use in their processes. This could help you learn about other options, which could reduce your costs or improve your products as well. 

Gain Access To Analytics

As a member of a GPO, you may also gain access to analytics and data that could help you make more informed decisions. The administrators of these groups will have a variety of tools at their disposal that can be used to better assess your purchase orders and options. They can complete different analysis that could help you better evaluate your purchase options, which can help you make informed decisions about how to best manage your business. Ultimately, these tools can give an objective view and feedback that could be a value add. 

If you are looking to improve your business, you can save money and improve efficiencies by joining a group purchasing organization. These groups continue to provide a variety of benefits to businesses of all sizes, which can help you save money and be more efficient. This can free up cash flow and resources that could be used to invest elsewhere in your business, which can further help to fuel future growth.