A group purchasing organization (GPO) leverages the collective buying power of its members to secure discounted prices on the goods and services they need to run their businesses.

The group purchasing methodology of sourcing encourages vendors to give GPO members aggregated volume-based pricing. Most individual providers spend a limited amount in any particular category, like office supplies or services. Because most of the time purchasing is all about volume, individual providers end up paying more because they have limited volumes to negotiate pricing. Individual vendors usually sell in limited quantities to specific providers.

Joining a group purchasing organization (GPO) allows you to leverage the collective buying power of a group of provider members, meaning you can take advantage of those larger discounts without actually purchasing more. The hard negotiation is already done by the GPO and the negotiated contracts with top vendors are already in place. All you have to do is guide your procurement team, select your contracted items based on requirements and start saving.