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4. Harnessing the Power – Starting Out

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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.  It is also important to understand which vendors are the most heavily supported by the group on any given line and which ones are not.  Thus, it should not be difficult pick out the top two or three vendors who should be invited to make competing bids on a given line.

Try an experiment to see what kind of price concessions the group can get from vendors by applying its purchasing power.  Start out by picking a line that is further down the spectrum of importance to the group’s members.  It should be a product category that fits all of the criteria set out in the “Overview’ discussion, above. Pick a product line that will cause less disruption to the members for them to change suppliers, so that they can more easily get behind the group’s selection.  If the group goes through this process a few times and it begins to rack up some successes, the members will be more willing to undertake the difficult work of developing a true group purchasing program.