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There are nearly 800 GPOs (group purchasing organizations) in the U.S., across a wide variety of industry sectors. They are common in healthcare, where more than 96% of hospitals use group purchasing organizations to lower costs. Manufacturers, retailers, grocers, and academic institutions are also heavy adopters of GPO buying groups.
In the education sector, however, the type of GPO you choose to work with makes a big difference. So, let’s explore the different types of group purchasing organizations.
The most fundamental distinction in the GPO landscape is between horizontal and vertical organizations.
Horizontal GPOs serve members across multiple industries, from hospitals and manufacturers to government agencies, universities, and private corporations. The appeal is breadth: these organizations negotiate contracts for a vast array of products and services, from office supplies and fleet vehicles to IT hardware and facilities maintenance.
For educational institutions, horizontal GPOs can provide solid value in common, standardized categories. However, the trade-off is specificity. A horizontal GPO negotiating contracts for hundreds of different organization types may not prioritize the unique requirements that matter in education.
Vertical GPOs
Vertical GPOs focus exclusively on a single industry. An education-focused vertical GPO serves only colleges, universities, and K–12 districts. The GPO’s staff understands your regulatory environment, from Title IX compliance to FERPA requirements. They recognize that research universities have needs that are different from those of community colleges, and both differ from K–12 districts.
When a vertical education GPO negotiates a learning management system contract, they’re thinking about integration with student information systems, accessibility requirements, and faculty support needs. When they solicit laboratory equipment, they understand grant funding cycles and specialized specifications that matter in academic research.
E&I Cooperative Services fits into the vertical GPO model. E&I is the only member-owned, nonprofit sourcing cooperative that exclusively serves the education sector.
There are also differences in how group purchasing organizations cover goods and services.
Product-specific group purchasing organizations concentrate on particular categories. For example, they might offer group contracts for technology or food services. They develop deep category knowledge and can offer expertise and deep supplier relationships.
The challenge, though, is fragmentation. Managing multiple GPO relationships means navigating different contract terms, reporting systems, and support structures.
In education, full-portfolio GPOs offer comprehensive coverage across the wide range of categories that educational institutions purchase. From athletics equipment to enterprise software to furniture, these organizations offer cooperative contracts across the most common categories you and your colleagues purchase.
For example, E&I offers more than 225 competitively solicited contracts across the categories that colleges and universities buy most frequently. Pre-negotiated agreements combine demand across member institutions to achieve volume discounts and terms that meet the unique needs of education.
Business structure also matters.
For-profit GPOs operate with shareholders or private owners. While they can provide savings to members, their main goal is to provide a return on investment for owners or shareholders. Transparency becomes crucial in understanding revenue sources and potential conflicts of interest.
Nonprofit and cooperative GPOs operate under a fundamentally different model. In a true cooperative structure, member institutions are the owners. The organization exists solely to serve member interests, with surplus revenue is returned through patronage refunds or reinvested in member services.
As a nonprofit cooperative, E&I’s leadership answers to its members, ensuring governance stays focused on member priorities. Without pressure to maximize supplier fees, contract selection can be based purely on member value: competitive pricing, supplier diversity, sustainability, and service excellence.
Nonprofit cooperatives also tend to offer more services, such as professional development opportunities, detailed data analytics, eProcurement tools, or other services that directly benefit the members.
How do you identify the GPO model that best fits your needs? Start by asking a few key questions:
Explore how E&I Cooperative Services’ nonprofit, member-owned model and education-focused expertise delivers immediate cost savings and long-term strategic value. Explore the benefits of becoming an E&I member and browse hundreds of competitively solicited cooperative agreements.