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Taking It to the Next Level

THE FIFTH INSTALMENT OF “HARNESSING THE POWER” As the group purchasing program becomes firmly established, there are some additional steps that can be taken that will further reduce acquisition costs to its membership.  (a) Many successful groups have their own private label lines of products.  Groups are often able to obtain significant discounts when the manufacturer produces the products under the group’s private label, rather than their own branded name.  One need only visit that grocery store and look down ...
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Starting Out

THE FOURTH INSTALMENT OF "HARNESSING THE POWER" At the beginning, the group probably feels like the proverbial mosquito in a nudist colony and wondering, “where do I begin.”  A good starting point would be to do an analysis of the purchasing patterns of the group to see where it is.  It would be wise to analyze which product lines have the largest amount of the group’s purchasing volume and then going down through the spectrum to the least important lines.  ...
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Taking the Program to the Vendors

THE THIRD INSTALMENT OF "HARNESSING THE POWER" Once a group is poised to deliver its prized purchasing volume to those vendors who are privileged to be selected, it should develop a format to solicit proposals from the vendors.  The group should have its own vendor proposal form that it requires each vendor to complete and submit.  In addition to the legal terms designed to benefit the group (such as a good indemnity provision), it could also contain spaces throughout the ...
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Setting Your House in Order

THE SECOND INSTALMENT OF "HARNESSING THE POWER" In order to win meaningful concessions from the vendor, the group must give them something they don’t already have.  They must be able to deliver significant additional volume to them.  In some rare instances, it may make sense to have two or three vendors of similar lines be “approved” or “preferred” vendors in exchange for “group” deals without the requirement of any particular amount of support from the group for any of their ...
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