How are you going to ensure that your business is one of the 45% that make it past the 5 year mark? You are going to find the best way to maximize profits while reducing costs.
You can only reduce your supply costs so much on your own. If you’ve done everything you can, then it’s time to consider joining a group purchasing organization.
Keep reading for six ways your business will benefit.
1. Buying Power
This reason uses the theory of scale of economies. The most obvious advantage of having more volume. When businesses join together their demand is greater and subsequently so is their buying power.
2. Negotiating Power
The simple fact is that the more you buy, the bigger the discount you can negotiate for. So when purchasing groups join together, they can see savings on average of 30%.
There are about 28 million small businesses in the United States. Imagine what kind of power you can wield when you join up with even a handful of them.
3. Lower Processing Costs
When you join a purchasing group, you simplify your supply chain for the items or services you intend to buy through the group. The number of individual transactions you make reduce.
Because of this, you pay less in processing fees. Which in turn reduces your per unit cost of the goods.
4. Shared Knowledge
You don’t know what you don’t know. When businesses come together for a common goal, they bring with them their individual experiences.
While you can go online and read reviews for consumer businesses, this isn’t always the case with B2B businesses. By working with a purchasing group, you gain valuable information about potential suppliers without having to take the risk of trying them out yourself.
This results in a reduction in costs and a more streamlined supply chain for your business.
5. Less Work
Find the right purchasing group, and they will take over the management of the supply lifecycle and any associated contracts. Each business will benefit individually by having this workload taken off of their plate.
Now you and your employees have more time to focus on your core business purpose.
6. Improvement and Innovation
What do you do when you find a supplier who can meet your demand at a price you can afford? You contract with them, and then move on to other things. The problem with this is that you miss out on better opportunities because you are not consistently looking.
When you work with the right purchasing, they are experts in their industry. This means that while you focus on your core business, they focus on theirs. What results is better processes and greater discounts for you and the other member businesses.
Look for a purchasing group provider that values innovation for their business and the industry.
Group Purchasing Organization
If you are looking for a way to improve your bottom line, reducing your operating and supply costs can help. But you can only reduce those costs so much at your current demand volume.
When you join a group purchasing organization, you give your business a jump start. By leveraging the power of the group, you can give your business an edge to help it grow to the next level.
Ready to start using the power of group purchasing for your business? Join today and start saving today.