Top 8 Reasons Why Your College Should Join a Group Purchasing Organization

We do not have to tell you about the current economic environment in colleges and universities. To say it is challenging is an understatement.

Procurement teams are being asked to rise to the challenge and find new ways to reduce costs and streamline processes to produce tangible savings. In today’s academic institutions, the pressure to cut costs without jeopardizing core services and programs can be immense.

Here are some of the ways group purchasing can help.

1. Cost Savings

By combining the purchasing power of other academic institutions, group purchasing can leverage economies of scale to negotiate deeper discounts. These savings are typically significantly greater than you could negotiate on your own.

2. Streamlined Procurement

Opting into competitively solicited contracts with pre-vetted suppliers reduces considerably the amount of time spent sourcing and negotiating. For procurement teams that are already overwhelmed—and the increased pressure to reduce costs—this can be a significant benefit.

3. Time

A streamlined procurement process gives you one of the most precious resources: time. Thanks to streamlined approaches and negotiated savings, you benefit from a larger pool of available resources, freeing up time to be spent elsewhere. With more time to focus on strategic goals, you can be even more valuable to your organization while also reducing administrative overhead.

4. Market Intelligence

A purchasing group that does significant volume has access to industry trends, insights and market conditions. This can help identify innovative solutions, potential new suppliers in the market, and benchmark pricing to ensure you are getting a best-in-class deal.

5. Wider Pool of Suppliers

Group purchasing organizations have access to a broader range of suppliers, giving you more options. Because of the aggregate volume, these contracts are more lucrative for suppliers, so they often bid on projects through a GPO that they may ignore if you solicit them.

A broader pool of suppliers can also be extremely helpful when you need to find vendors to meet specific sustainability goals or diversity requirements.

6. Financial Control

Cooperative contracts often span multiple years, making it easier to forecast expenditures. This can simplify budget planning cycles and be a hedge against rising prices.

Think about lab supplies, for example. Prices often fluctuate greatly year-to-year, making it difficult to set accurate budget allocations. A multi-year group purchasing contract can include set pricing to eliminate any uncertainty. Locking in prices for the duration of the contract can also be a hedge against rising prices, inflation, and supply chain disruptions—shielding your college or university from rapid price increases.

7. Risk Mitigation

GPOs vet suppliers and ensure they meet certain quality standards. This can help colleges reduce the risk of purchasing inferior products or services.

At the same time, procurement leaders can use GPOs to bring more spend under contract, reducing the amount of non-compliant or undermanaged spending. In most cases, procurement teams focus on the big-ticket categories that make up the bulk of your spending. Not many organizations have the time or resources to manage indirect spend categories.

Another area where group purchasing can help mitigate risks is with supply chains. We have all seen the impact over the past few years when critical materials are suddenly in short supply. Vendors that do volume business are more likely to have access and be able to deliver on contracts. Suppliers are also more likely to take care of their biggest customers. So, cooperative contracts may also help you keep getting the goods you need even when others may struggle.

8. Data Analysis

Working with a purchasing group may also provide access to data to look for additional savings. For example, consolidating your purchases may produce greater volume discounts while also reducing the number of suppliers you have to work with.

E&I Cooperative Services offers Strategic Spend Assessments (SSAs) to compare your existing contracts with what E&I has negotiated through its competitive solicitation process. This often uncovers significant savings that can be achieved by opting into the Cooperative’s contracts.

Group Purchasing Organizations vs Sourcing Cooperatives

GPOs act as intermediaries between buyers and sellers. Cooperatives are owned by their members, with shared goals. In the case of E&I Cooperative Services, the sourcing cooperative is made up exclusively of educational institutions that have common needs. Contracts include negotiations to produce favorable terms specifically for the education sector.

As a non-profit procurement cooperative, E&I returns any profits to its members in the form of patronage rebates based on a member’s purchasing volume. For-profit GPOs do not.

While both GPOs and cooperatives act as a purchasing group to leverage economies of scale, cooperatives like E&I Cooperative Services work solely for the success and benefit of member institutions.

View available contracts through E&I Cooperative Services or contact your dedicated rep today.


We use cookies to make your experience better!

Skip to content