For many catering professionals, the off-season is a time to explore new opportunities and test different strategies for saving money, increasing efficiency, and managing labor. If you heard about group purchasing organizations (GPOs) during your busy season, you likely put a pin in it to revisit when business slows down. Perhaps you’ve never heard of a GPO, but you’re actively looking for innovative ways to boost your profit margins.
As the end of the year draws closer, now is the time to dig into your catering business and uncover areas where you can cut down on waste and prioritize cost-effectiveness.
GPOs are one such opportunity, providing business owners access to lower rates and exclusive discounts on items they already purchase. By leveraging the collective buying power of thousands of companies, GPOs can negotiate reduced prices and secure wholesale rates for all of their members. Since most GPOs don’t charge a membership fee, caterers who maximize their membership stand only to gain.
There is no catch, but there is some homework upfront to ensure you find the right GPO for your catering business. That makes the off-season the perfect time of year to explore your options. Here are five steps to join a GPO this year.
Step one: Research GPO options
It’s important to find a GPO that suits your business size and needs, so spend some time looking at the options in your market. An internet search is a good place to start, but don’t hesitate to ask around your network for recommendations.
When researching, consider product offerings, industry reputation, and supplier relationships. Look for GPOs that work with trusted distributors, like US Foods, so you know the quality of their food source. Review GPO websites to learn about their purchasing process, read FAQs, and get a feel for the customer experience.
Step two: Analyze your current purchasing needs
Before reaching out to any GPOs, you’ll want to have a solid understanding of your current purchasing habits. What products do you order most? How much do you typically spend on them? Do you face any difficulties with current vendors? Collect invoices from the past three to six months and run a cost analysis to see where you could stand to save more. Keep in mind factors like product quality, vendor reliability, and delivery schedules, as a GPO may smooth over some of those challenges experienced with other vendors.
Step three: Request information from GPOs
With your research and cost analysis in hand, start reaching out to the GPOs that caught your interest. Most GPOs offer consultations to discuss benefits in more detail, and some will even run a cost comparison to identify savings opportunities on recent invoices.
When communicating with a member representative, ask questions about their vendor partnerships, membership process, contract terms, and available programs for your business’s needs. GPOs are as much about customer service as food sourcing, so make sure you feel comfortable and cared for by the support team.
Step four: Compare contracts and terms
As you compare your options, thoroughly review the contract terms for each of the GPOs in consideration. In particular, look for membership fees, exclusivity clauses, cancellation policies, and minimum purchasing commitments that may restrict your flexibility.
Ideally, you should retain all decision-making rights as a business owner with the freedom to work with non-partnered vendors or cancel your membership as you please. A trustworthy GPO adds options to your purchasing decisions without locking you in.
Step five: Prepare for onboarding
Once you’ve settled on the right GPO for your catering business, you’ll need to set aside time to adjust your processes, implement new systems, and train staff to follow the new purchasing procedures. Be sure to include all key team members in the onboarding process, especially those responsible for procurement. You may also need to navigate a transition between existing suppliers and your new GPO to avoid disruptions, so factor in timing as you prepare to maximize your membership benefits.
As a full-fledged member, remember that you’ll only see results if you leverage all a GPO has to offer. Ask a representative for procurement assistance, market trends, or tips for increasing kitchen efficiency. Monitor your purchases regularly and track the savings you earn from ordering through the GPO. The more you use it, the more results you’ll see!
The off-season is the perfect time to research, onboard, and maximize GPO advantages in your catering business. Start looking into your options now and set yourself up for success in the new year and beyond!
