How do small companies gain the Purchasing power of big companies and how do big companies gain the Purchasing powers of giant corporations? They join Purchasing Consortiums.
Purchasing or Buying Consortiums are simply a group of two or more companies that band together to do their buying together. They are therefore treated as a single account to their vendors. They then enjoy pricing, account management levels, and increased efficiencies in Purchasing processes that they would not have on their own.
Another benefit is getting to work more closely with colleagues at other companies to see how they handle different commodities and challenges of the jobs. This cross-communication may be as valuable in soft dollar savings as the new pricing is in hard dollar savings.
Another way to achieve some of these same benefits, especially for smaller businesses is to join group which offers its members admission into Buying Consortiums such as a your local Chamber of Commerce or an organization such as the Small Business Service Bureau.
See the next post for a discussion of some possible negatives to joining Purchasing Consortiums.
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