Your Crash Course for GPOs

There’s been a lot of buzz about cutting costs amidst the coronavirus pandemic and subsequent economic downturn, but it may be time to get creative if your usual savings strategies aren’t cutting it. With revenue dropping industry-wide and a future that is still mostly uncertain, it’s critical for caterers to save their pennies where they can and be as efficient and resourceful as possible with spending.

A not-so-common yet highly effective way to pad your budget is to join a group purchasing organization (GPO) for caterers. For all intents and purposes, a GPO is like a mutual fund but, instead of stocks and bonds, you’re joining forces to buy food supplies. Essentially, a group of companies forms a GPO to increase their buying power and get better prices by collectively purchasing a higher volume of products. It’s no secret that bulk orders are often at a lower cost per item than small orders, but the truth is that we don’t personally need everything in bulk.

With a GPO, you combine your purchasing needs with others to place bulk orders at that discounted rate and only receive (and pay for) what you need. No two GPOs are alike and, if you’re interested in joining one, you’ll need to do your due diligence to find the right fit for your business needs. Here are a few things to keep in mind during your search.

Consider customer service quality

Customer service is key in any ongoing membership, as you may need support later down the line. With GPOs, the best ones will have representatives that are easily accessible to answer your questions and provide solutions when needed. For example, our program is designed around local reps who can assist our clients on the ground level in real time. Before signing anything, take a moment to reach out and ask questions about the program to get a feel for how it would feel to be in a working relationship with the organization.

Request supplier information

Joining a GPO is a cost-effective strategy, but only if you do your research in advance and can confirm the quality of the food you’ll receive. Ask about their food suppliers to see where your products will come from, then read up on those companies to determine whether it’s a high-quality source. We partner with US Foods, which is one of the most reputable food brands in the country, so it sends the message that our GPO cares about safe and responsible sourcing. Make sure your final choice aligns with your needs and your values before sealing the deal.

Pass on long-term contracts

GPOs are like clubs — membership is optional and you still retain all of your rights as an individual as a business owner. Contracts that require a set period of membership or tack on unnecessary fees for cancellation are a red flag. You run a business and should have the flexibility to purchase what you want and when you want it, so be cautious about groups that try to box you into their own parameters. Request a copy of their policies and restrictions before agreeing to anything. A great GPO is consistent and reliable, but does not limit your freedom to make smart business choices.

GPOs aren’t just kind on your wallet; they also open up your schedule as you save time on purchasing decisions. If you’ve been considering ways to cut spending and protect your bottom line, joining a GPO may be just the right move for you.