Although most people are enticed with the idea of one person owning a business, in reality, the success of many businesses depends on mutually beneficial relationships and successful partnerships.

Whether at the individual level or across industries, teamwork helps you reduce stress and workload, thereby improving productivity, profit and performance.

This is why group purchasing organizations, or GPOs, are one of the best ways businesses of all sizes and specializations can save costs and achieve greater returns on their investment (ROI).

What Is a Group Purchasing Organization?

The idea of a group purchasing organization is that you can identify the most important products your business needs and create purchasing contracts with the best vendors in your supply chain. These vendors will then buy the most essential goods and services you offer using optimal purchasing power.

All around the world today, people leverage group purchasing power from multiple partners to reduce costs and get the best value from vendors using discounts and other benefits. These Group Purchasing Organizations can also be identified as leveraged buying or procurement groups, collectives, co-ops, purchasing alliances, and consortia.

With the best group purchasing organization, your business will enjoy lasting value, reduced risk, shared benefit, better contract terms, etc., on purchased goods and services using a better ROI and reduced Total Cost of Ownership (TCO).

These group purchasing organizations are financed by administrative fees usually charged to either GPO members, the vendors within the supply chain, or both. For very large GPOs, these administrative fees may be more suitable for more significant members that have bigger ROI than smaller businesses due to the large volume of their purchasing power.

The level of participation differs within the organization because, although this is quite rare, one member can decide to buy the bulk of their goods and services using a single GPO or buy just a couple of items from several GPOs as a result of their deal on offer and their specific needs.

Who Uses GPOs?

Most businesses now take advantage of the buying power they have as a common tool for obtaining goods and services. Some of these industries include;

• Healthcare providers
• Hotels and Resorts
• Industrial manufacturers
• Restaurants
• Grocery and retail enterprises

While these industries cover all segments in the business marketplace, the origin of American GPOs is in the healthcare and human services industries which started in 1910 with the Hospital Bureau of New York.

Today, GPOs are one of the most important parts of the healthcare industry, with 97% of hospital systems, including not-for-profit hospitals and surgery centers. There is no shadow of a doubt that healthcare organizations are major beneficiaries of Group purchasing organizations.


From top-tier service, better pricing, additional contracts, and even resources you might not have been offered, there are actually different reasons why your business needs to use the best group purchasing organizations.

So what are you waiting for?

It’s time to embrace the possibility in GPOs, and find out how best your business can be profitable to its individual goals.