SMEs save with Group Purchasing- Why pay more when you can pay less!

“United we stand, divided we fall”

This may be the inspiration behind group purchasing which gives small businesses the collective buying power to compete against their larger counterparts as they can take advantage of the economies of scale which they can so readily exploit. Keeping costs low is essential for small businesses, so any strategy that reduces operations costs should be explored and group purchasing is one such option.

Small businesses use a wide variety of products and services in the course of their operations, everything from office supplies and equipment to information technology, payroll processing, and employee benefits administration. Unfortunately small firms often pay more for such goods and services than large companies because of a lack of volume or scale. But there is a way small business owners can enjoy the same kinds of cost savings their big brethren do on essential goods and services: by participating in group purchasing.

Group purchasing is the collective participation of many different individuals or small businesses in the purchase of products or services, thus enabling participants to benefit from discounted or group rates. While it isn’t new, group purchasing has generally been under utilised by small businesses in the United States.

This may be starting to change, however, with the emergence of a number of different online consumer-group buying services, such as GroupOn and LivingSocial. These services primarily offer localised deals and discounts on items such as restaurant meals, retail store purchases, and event tickets.

If you don’t want to commit to group purchasing co-ops or membership-based associations, you can still apply the principles of collective buying by bartering with other businesses. Through a bartering agreement, your business can offer its products and services at a discount, or in exchange for, the goods or services offered by another local business.

There are many group purchasing groups within the UK developed to meet the needs of particular industries including Spiral, Beacon, Aliaxis and PPG Premier Purchasing Group.