Group Purchasing Organizations vs. Buying Groups: Key Differences

The choice between group purchasing organizations (GPOs) and buying groups directly impacts the financial health and operational efficiency of senior living communities. This blog outlines the essential differences between GPOs and buying groups, providing valuable insights to guide your community towards strategic and cost-effective procurement.

What is a GPO?

GPOs harness the collective purchasing power of multiple organizations to secure cost-effective agreements with suppliers. By joining a GPO, members often obtain lower prices and/or more favorable terms than would be possible if they contracted with a vendor individually. Oftentimes, participating in a GPO program can result double-digit savings in some categories.

A distinctive feature of GPOs is their specialization. GPOs specialize in a variety of industries, with healthcare, hospitality and food service being among the most common. This specialization enables GPOs to deeply understand the unique needs and challenges of specific industries, ensuring that the contracts and solutions they provide are finely tailored to meet the requirements of their member organizations.

What is a Buying Group?

Buying groups pull together a large group of businesses to create discounts in bulk. Unlike GPOs, buying groups can be sector-agnostic, and are often more widespread in their product offerings. GPOs can be understood as a specific type of buying group, as items on contract are driven by products purchased in specific industry segments.

In short, the fundamental difference between a GPO and a buying group is specialization. While buying groups focus primarily on achieving bulk discounts, GPOs allow organizations to work directly with vendors for their specific product needs, with opportunities to negotiate specialized contracts.

Choosing the Right Procurement Partner

When it comes to selecting the ideal procurement partner, senior living communities have several factors to consider. Making an informed choice begins with a careful evaluation of your specific needs and priorities.

While exploring your options, it's essential to weigh the value offered by different procurement solutions. Beyond the immediate cost savings, consider the long-term benefits and industry-specific expertise that some partners may provide. This specialized support can significantly enhance your procurement strategies.

Moreover, flexibility is a crucial aspect to consider. Ensure that your chosen partner aligns with your long-term goals and can adapt to changes in your community's needs. By making a thoughtful decision, you can secure a partnership that empowers your community to thrive and meet its procurement requirements effectively.

Experience Success with CPS

Navigating the complexities of procurement can be a daunting task, but reaping the benefits of a specialized GPO doesn't have to be. Care Purchasing Services (CPS), a trusted national group purchasing organization exclusively dedicated to the senior living market, makes the process simple.

Our experienced team at CPS understands the unique needs of senior living communities. That's why we're here to save you time and money while anticipating the evolving needs of your community. To learn how partnering with CPS can streamline your procurement efforts, enhance cost-efficiency and empower you to focus on delivering exceptional care and services to your residents, contact us today.