Here are the top 10 things to consider:
- First, size does matter. Look for a GPO that has both the size and the expertise you need to get the best pricing and services for your particular business. Team Four, for instance, has thousands of members and over 200 years of collective experience in the foodservice industry.
- Beyond size and expertise, make sure your GPO has a local name, face, and actual person you and your business can depend on as your business grows.
- Ask about costs right up front and how your business will receive discounts. The best GPOs do not usually require membership fees.
- Don’t just sign up with a GPO because you think it is going to save you money. Ask for estimated savings.
- What kind of reporting can you expect and what is its frequency?
- Learn how your GPO makes money. Through efficiencies? Rebates? Off-invoice pricing?
- Ask if the GPO can have your business named as an “insured” on distributors’ insurance contacts to avoid potential liability from foodborne illnesses.
- What do you have to sign, for how long, and are there any penalties if the agreement is broken early?
- Does the GPO require bundling of services or can you tailor the agreement to meet your specific needs? While the best-run GPOs do not require bundling, they do encourage members to make 80 percent of their purchases through the GPO. Why? Again, it is all about strength in numbers.
- We already have a purchasing agent, so what can you do for us? Smart companies realize that it does not pay to be a lone wolf in the foodservice industry. Leveraging the size and expertise of a reputable GPO saves your organization money and allows your purchasing experts to focus on growing your business.