“Just sign up and start saving”. Sound too good to be true, right?
We have all been taught nothing worth having or doing is ever free. DPOP firmly believes this to be true and our services are certainly not free. We receive an administrative fee from suppliers based on purchases made by our GPO members.
Some GPOs or similar models charge members a fee. Our philosophy is that the member shouldn’t have to pay for providing suppliers the opportunity to sell to a bigger customer.
Because a GPO works on behalf of a large number of buyers, contracted suppliers save on sales and administrative expenses. That’s why they are motivated to work with the GPO and provide discounted pricing to members.
No job is complete until the paperwork is done
By law, the GPO / Member relationship doesn’t exist without a written agreement between the parties. It clarifies the roles and responsibilities of each party to ensure everyone is on the same page.
It protects the member’s ability to not have to do anything it doesn’t want to do. Members are free to use or not use any of the GPO contracts, at no cost. Additionally, members are ensured that any information DPOP receives about their business is never disclosed to anyone for any reason.
The agreement protects DPOP by stating that we do not buy or sell products and aren’t responsible for product performance, warranty, or service issues.
The devil is in the details…and so are the savings
Without spend detail, a buyer is unable to quantify and categorize crucial information needed to negotiate the supplier’s best offer. It takes some work but is well worth doing. Flying blind isn’t our idea of an effective strategy
Think about it – when a big box store’s top purchasing person is negotiating a contract for stock room supplies for 11,500 stores, he/she knows exactly what each store uses, how much it uses, what it pays, and from whom it buys.
The 80/20 rule says 80% of a company’s spend occurs with 20% of its suppliers. A spend analysis also helps DPOP identify the group’s major suppliers, ensuring they have an opportunity to participate while providing members choice and flexibility.