You just opened your e-mail only to see an ad from a big-box or chain store offering the same merchandise to consumers at a lower price than you’re paying for it. How many times have you commented on (or griped, complained and ranted about) how these businesses have all the buying power because they have leverage with vendors due to their number of locations?
We’ve all witnessed this, and it’s not fun. Actually, it’s extremely frustrating. Some dealers simply accept it, saying, “That’s the way it is,” and try to focus on products that are not heavily discounted. Others are doing something about it: They’re joining buying groups.
The coming together of similar
independent businesses to leverage
their combined purchasing power to
receive better pricing and terms on
the products they buy.
What’s a buying group? In its simplest form, a buying group is the coming together of similar independent businesses to leverage their combined purchasing power to receive better pricing and terms on the products they buy. Successful buying groups bring benefits to their members and participating vendors that extend beyond simply flexing their “strength in numbers” to leverage a better deal. Vendors appreciate the efficient manner of dealing with a group, as compared to incurring the added costs associated with making individual deals. They place value on working with a committed group of retailers and justify discounts from these cost-saving measures. Smart vendors understand the benefits, and they’re gaining more floor space, increasing sales and nurturing commitment as a result.
Why join a buying group? Because they help generate margin at all levels. Without decent margins, no one survives. Buying groups do more than help you buy; they also inform. And, in today’s business climate, information is the currency of survival.
Many buying groups do substantially more for their dealer members than just negotiate better pricing. They focus on building stronger relationships with vendors, educating retailers and encouraging collaboration at every level. Participating vendors do more than just sell product. They work together to create special promotions, and many provide valuable support materials like ad content for print and e-mail. They may offer sales training and in-store visits utilizing product specialists and clinicians to help influence your customers’ buying decisions.