What is a Group Purchasing Organization? How can it benefit procurement in numerous businesses? How does a Group Purchasing Organization fit into your overall procurement strategy? In this episode of Negotiations Ninja, Anthony Clervi joins us to answer these questions and convey the usefulness of a partnership with your business.
Anthony Clervi is the president and CEO of Una. He helps companies of all shapes and sizes save money on indirect products—from office supplies to telecommunications. His goal is to connect with their supplier partners and members in a way that offers value to all parties.
Outline of This Episode
- [2:32] Who Anthony is and what he does
- [3:35] What is a Group Purchasing Organization?
- [6:33] What’s been happening in the industry amid the COVID crisis
- [9:31] The biggest factors that lead to success with supplier-partners
- [13:33] What’s happening in the group purchasing space
- [17:08] The general business community is missing out
- [19:54] How to ascertain what a business needs from the GPO
What is a Group Purchasing Organization?
A Group Purchasing Organization—often shortened to GPO—negotiates contracts with major brands in thousands of different categories. They’ve leveraged and negotiated contracts that allow for speed-to-savings and speed-to-service. Anthony simplifies it even further: “We help you as the small or mid-cap businesses buy like the big guys.” Anthony points out that most GPOs are free to join. You jump on contracts that make sense a-la-carte and work directly with the supplier. Anthony refers to a GPO as a sourcing hero. They help you find a blended approach with your procurement strategy, with the goal to help you stop worrying.
How Una takes it one step further
A GPO can achieve scale and leverage in ways other people just can’t do. Anthony lets us in on a secret: Una offers average savings anywhere between 10 and 20% on hundreds of different categories that they have in their portfolio. But then they try to go beyond that to have conversations with C-suites or owners and ask: “What does an additional 10% to your bottom line do for your valuation as a company? What does it do for your employees? If you can save 10% and there’s an increase in your bottom line, what other investments can you make?” So there’s this cascading effect where they try to go beyond just the savings. They like to think strategically and long-term with their members and future members.
Most businesses don’t know the opportunity is available
A group purchasing organization isn’t a novel concept in business, yet the general business community doesn’t even know that this opportunity is available. They don’t know the value they’re missing out on. Anthony points out that it’s been amazing to see the general business community—from shipping to office supplies, technology to PPE—are learning they can access GPOs.
The average member that Una targets is anywhere from a thousand employees to 5,000 employees. Anthony is shocked by how much businesses don’t understand the space, what’s available, or even that there’s not a lot of strings attached. “We are continuing to find ourselves educating different verticals just in the general business community that continues to surprise us on a weekly basis.”
For an in-depth discussion on who Una is, what they do, and how they offer unique value to their supplier-partners and members—keep listening!
The important job of a group purchasing organization
Anthony points out that their job is to help supplier-partners and members partner to find real wins—not just short-term opportunities that don’t benefit both parties. It may be a mindset shift for a lot of procurement people to think that way. But with all of the risk that’s involved, we need to start having those types of conversations.
You need to make the conversation a proportionate back-and-forth. Are you working with your incumbent? Are you going to bring another party in and that’ll change the conversation? Their job is to facilitate healthy tension between various supplier partners and the end-user/members.
They work together to find co-marketing and co-branding opportunities. There is so much value in simply saying “I’m using this company.” The vote of confidence is huge. Many brands will make serious concessions if they get marketing opportunities.
Above all, Anthony is a big believer in the value of transparency and building relationships. You treat people how you want to be treated and exercise patience. Building relationships and strategic partnerships take time—but all good things take time.
Resources & People Mentioned
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