A buying group, also known as a purchasing group, is when two or more organizations or distributors join together in order to combine their needs and leverage negotiating strength. Instead of individual distributors, a group of them has contractual strength to access the best prices, services, and tech that they may otherwise be unable to negotiate.
Because buying groups are often able to offer their members many extra services that individual distributors alone may not have access to, this is a solution that many distributors are finding more and more appealing. They allow for distributors to work more efficiently, affordably, and nationally than an individual working alone.
There are a number of benefits that come with being in a buying group. If you’re an individual distributor thinking of joining one or teaming up to create one, check out some of the pros here!
Scale Economy
When the volume of the aggregated purchase demands and inventory requirements are higher than they would be for an individual distributor, the purchasing group has a greater access to scale economy. A purchasing group has more purchasing power than they could otherwise obtain on their own.
Reduce Transaction Costs
By joining a buying group, individuals can simplify their processes to reduce the cost per unit on the goods as well as the overall transaction costs. There are less individual contracts to be negotiated, prepared, and managed over time.
More Negotiating Power
Because there is a higher overall purchase volume, a purchasing group can usually negotiate lower prices for goods or services purchased compared to what an individual could do. These savings are often considerable – up to 35%!
Reduced Workload
Purchasing groups manage all stages of the contract lifecycles on behalf of the individuals in their network. This means that these individuals have a significantly reduced workload in day to day business operations and can focus on their core business.
Private Label
Some buying groups create their own private label name brand that their network can operate under. This is particularly appealing to individuals who don’t have their own brand identity. This comes with the benefit of helping distributors land national accounts using the reputation of the larger private label.
Hi-Tech Help
Many buying groups have the means to invest in technology that can help businesses operate more efficiently and globally. Things like Customer Management Systems, ordering and tracking systems, invoicing systems, accounting, and more can be costly and time consuming to handle as an individual distributor.
Work With Janitized
At Janitized, we offer show specials for all of our buying group customers during their individual conferences. We often attend these conferences and love meeting our buying group customers when we do! Make sure to check out our booth next time you see us at a conference to learn more about our products and take advantage of our show specials.
For more information about Janitized’s upcoming shows and information about how to join a buying group, contact us today!
