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What is a GPO?
A group purchasing organization (GPO) is an entity that is created to leverage the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the GPO members. The resulting combined buying power helps the usually mid-size and larger member client organizations save money on their purchases of categories such as temporary labor services, office products, safety supplies, office equipment, packaging supplies, uniform & laundry services, pest control, and expedited parcel delivery. The consolidation of purchasing effort with the GPO also allows member clients savings from reduced staffing overhead costs. The suppliers to GPS offer preferred pricing, terms, and service standards because they experience lower overall selling expenses and the increased volume usually associated with the addition of a single very large customer
Are there different types of GPOs?
If you’ve seen one GPO, you’ve really only seen one GPO, as they vary greatly in size, type of ownership and the services they offer their members. Some GPOs are owned by hospitals, while others do not have such a link to the facilities they serve. Some GPOs only serve not-for-profit organizations, while others serve just proprietary facilities, and some serve a mix of the two. Some GPOs offer members the ability to purchase nearly every conceivable type of product, while others focus on specific product categories.
Do I Have To Use Any Particular Supplier or spend at a certain level?
No. There is no obligation to spend or to use any particular supplier. Additionally, most of our suppliers do not require any minimum amount to be spent with them to enjoy our discounted prices.
What if I choose to cancel my membership?
You are free to cancel at any time. Unfortunately, you will lose access to our pre-negotiated discounts and terms.
What is expected of me?
Our only requirement as a participant is confidentiality. We have worked hard to develop our supplier partner relationships, and need to protect our trade secrets! As a result, in order to become a participant, you are required to sign a confidentiality agreement stating that you will not share our pricing with other companies, or use it to procure better pricing on your own with other suppliers.
Does a GPO agreement replace our Procurement?
While we do simplify the procurement process of many indirect items, we cannot replace your buying professionals and their knowledge of your company’s specific needs. Our aim is augment your internal team, freeing them to work on reducing costs on the goods and services that provide you with a competitive advantage.
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