How to Make Money When You Buy with a GPO

Time is valuable, especially in high-demand environments like the kitchen. Simply put, caterers don’t have time to try new strategies unless they can confirm a direct return on investment. For many, the idea of saving more money through a group purchasing organization (GPO) seems too good to be true — so joining one isn’t a priority.

Yet, the potential savings from a GPO are ripe for the taking if you’re willing to step outside your comfort zone. A bit of time upfront can save tens of thousands of dollars over the years, so it’s vital to know how to make the most of your membership!

Whether you’re interested in joining or a member who hasn’t seen a return yet, here are five ways a GPO will pay you back in dividends.

Avoid restrictive contracts

The whole point of GPO membership is to enhance how you do business, so it’s essential to find one that does not limit your options. Look for one that offers flexibility in the amount and frequency of your orders, avoiding any agreements with strict terms of use.

GPOs are designed to provide flexibility, so you should never feel like you’re losing control of any aspect of your business. So read all contracts carefully! If any policies seem unreasonable, it’s best to walk away and find a GPO that doesn’t infringe on your rights as a decision-maker in the company.

Get to know your supplier

Many catering professionals hesitate to let go of connections they’ve nurtured with existing suppliers. Fortunately, you don’t have to change a thing with a GPO. Instead, you simply gain access to more options. But first, you must confirm that the food quality from the GPO’s suppliers meets your kitchen’s standards.

Connect with your GPO representative to learn more about their food suppliers and, if necessary, do your own research to evaluate quality. Ideally, you’ll discover it’s a reputable food brand—like US Foods—with responsible sourcing practices you can trust.

Ask questions

Transparency is key when it comes to sourcing your food! If you work with local farmers or butchers, you might ask them about quality, seasonality, market demand, pricing, and other factors that impact your order. Treat your GPO the same way! Trustworthy GPOs have local representatives that are familiar with your market and ready to support you.

Do you need help finding a particular brand? Are you wondering about the current market price for lobster? All you have to do is ask! Customer service quality is a hallmark of great GPOs, as their mission is to uplift their members’ businesses. By leveraging such a helpful resource, you can shop smarter and access savings you didn’t know existed.

Try alternatives

When you’re comfortable with a certain brand, it’s easy to put it on auto-order and stick with what you know. But what if there were a product that was identical in quality but at a lower price point? You’d no doubt want the savings! With a GPO membership, you open up your business to alternatives that can save money in the long run.

For instance, say you’ve used the same flour for years at 50 cents per pound. But if your GPO can source a similar quality for even 48 cents per pound, your savings will stack up and your profit margins will rise over time. You may even find that you can order the same brands at lower prices, thanks to bulk discounts secured by the GPO. So don’t be afraid to try something new, and let your GPO help you find savings in every order!

Reallocate your time wisely

When you let a GPO handle the busy work of sourcing, you’ll free up more time in your schedule to dedicate to profit-driving activities. Use that reclaimed time to work on your business! Test out new sales strategies, create efficient systems for your team, build your local network, and take on other backburner projects that will boost your bottom line.

If you’re new to GPOs, your first step is simply to reach out for a quote and sign up! You can start saving money on your very first order. But if you’ve been in a GPO for a while without seeing the value, it’s a good time to check in with your representative to discuss more ways to save. They’ll help you review your orders and identify additional opportunities to trim costs and increase your profits. Either way, you’re on the right track to start making more money!

Article by Clint Elkins