Facts and myths of Group Purchasing Organizations for multifamily housing professionals
This content has been provided by IREM Industry Partner, OMNIA Partners.
You’ve probably heard of a group purchasing organization (GPO), but have you ever stopped to wonder what it is and what they do? Or maybe you’ve heard of a GPO, but you aren’t sure that will benefit your unique circumstances. Follow along as we break down the basics of a GPO and shed light on the misconceptions surrounding the world of group purchasing.
A group purchasing organization acts as a fairy godmother. They make purchasing wishes come true by connecting the owners and operators of different businesses, like property management companies, with suppliers that have the goods and services they need in a timely and cost-effective manner.
Simply put, GPOs exist to streamline procurement processes by helping you purchase the goods and services your organization needs, at a discounted rate.
Now that we know what a group purchasing organization does, let’s discuss how it can benefit property owners and operators specifically.
A GPO can provide the following benefits:
Subject Matter Expertise Across a Variety of Spend Categories
By leveraging a subject matter expert, property owners and operators can gain valuable insights and guidance throughout the purchasing process, ensuring that they make the most informed decisions and obtain the best possible outcomes no matter the spend category.
Relationship Management
A dedicated representative from the GPO’s team works to make life easier by cultivating the mutually beneficial relationship between the multifamily housing owners and operators and supplier partners.
Discounts on Purchases
One of the most beneficial parts of the GPO model is the access property owners and operators have to deep discounts on products and services from world class suppliers. The GPO team negotiates deeper discounts, improved terms and conditions all while monitoring contracts to ensure agreements don’t decrease in value after implementation.
Save Time
Along with an opportunity for significant cost savings, the GPO model enables purchasers to bypass the RFP process, enabling them to dedicate more time and resources to other company priorities such as leasing, collections, service and more. Your team can tap into the tools and resources to support your internal stakeholders’ needs, increasing interaction and time spent with residents and prospects. The GPO's contracting experts complete all of the sourcing groundwork, which includes category research analysis and ongoing contract management.
Market Insights
Your team will also have access to the insights you need easily, with spend visibility and analytics provided by your GPO. This gives you the ability to make strategic purchasing decisions based on actual data from your organization’s purchasing habits.
Obviously, the benefits of a GPO are many but so are the misconceptions. Here’s a deep dive on the myths of the GPO world and the facts you need to know:
Company Size
Myth: Members of a GPO must be part of a large corporation.
Truth: GPOs work with properties of all sizes and can provide benefits for even small properties through collective purchasing power.
High Cost
Myth: Becoming a member of a GPO is expensive.
Truth: Membership can cost zero dollars, depending on the GPO you use.
Product Quality
Myth: You sacrifice product quality when buying in bulk.
Truth: GPOs provide access to world class suppliers (even ones you may already use) who offer the highest quality goods.
Limited Choice
Myth: By working with a GPO your supplier offers are limited.
Truth: GPOs work to find the most reputable supplier partners. This provides peace of mind so that your company doesn’t have to worry about the reputation of the supplier being used.
Products Only
Myth: Companies can only use a GPO to procure tangible supplies.
Truth: You can use a GPO for a variety of goods and services, such as temp staffing, internet solutions, energy, and more!
If you choose to work with a GPO, it’s important to do research and choose the group purchasing organization that can meet your specific needs. The right one will provide cost savings, efficiency, and access to the experts and data that will allow your properties and company to thrive.
About OMNIA Partners
As your ally in the purchasing process, OMNIA Partners is dedicated to optimizing procurement for your organization. Your free membership provides full access to our portfolio of value-driven contracts, spend visibility, analytics, and subject matter experts. Join thousands of members who are discovering a better way to buy. Visit www.omniapartners.com.