How a Group Purchasing Organization Saves Restaurants Money

Running a successful restaurant business can be daunting! As a manager or business owner, you have to balance between managing inventories, staff members, customers and other business needs. If you don’t have another hand helping you with all these, it can be frustrating and costly in the long run.

Since you’re in business to make a profit, you have to keep at it, regardless of all the straining. Is this how it’s supposed to be? You could be asking. The truth is, this takes a lot of time, money, and hard work to influence your bottom line.

Nonetheless, you don’t need to stress over it when there’s a proven way to save you money. If you’re wondering what we’re talking about, this is where Group Purchasing Organizations (GPOs) come in handy for restaurant managers and owners.

In the rest of this guide, we’ll show you how Group Purchasing Organizations helps save management and operations costs and why you need to join one. Let’s get to it!

What is a Group Purchasing Organization

What is a Group Purchasing Organization, you ask? If you’re new to this concept, a Group Purchasing Organization in the restaurants’ industry is an association of restaurants coming together to increase their purchasing power. They achieve this goal by negotiating better pricing for typical costs incurred in running a restaurant.

Being part of a Group Purchasing Organization gives you an edge to save on the cost of production while keeping more profits. The right GPO will help you get better pricing for food items, stuff uniforms, insurance covers, and payment processors.

Like all businesses, your restaurant only makes a profit when your income supersedes your expenses. Nonetheless, most restaurants incur enormous costs, cutting down on profits. So, without an effective means of retaining more, your restaurant business is likely to save little.

The good news is, a Group Purchasing Organization gives you an added advantage of negotiating for better pricing, which you can’t achieve on your own. In addition, Group Purchasing Organizations connect you with national and local suppliers to get better and competitive products and services.

How Partnering with a Group Purchasing Organization Saves on Cost

Overall, the underlying advantage of joining a Group Purchasing Organization is to save on different operation costs. Let’s break that down to see how it works.

1. Negotiate lower Prices

This is the main advantage of partnering with a Group Purchasing Organization because it’s the principal reason GPOs are formed. Finding suppliers and service providers on your own can be frustrating. But, if you’re fortunate to find one, they’re likely to charge you an arm and a leg for their offers, especially when they have the monopoly.

As a savvy business owner or manager, you want to avoid being at the mercy of monopolistic suppliers and service providers. Your best shot at realizing this is by teaming up with other like-minded restaurant owners and managers to influence your businesses’ direction.

When operating as a solo restaurant, suppliers and service providers may not take you seriously. However, when you have a collective voice of several restaurants, you become unbeatable in the marketplace. You can only achieve this through a Group Purchasing Organization.

2. Helps Save time

Time is an invaluable resource, so it should be used appropriately. However, in the business world, this can be a hurdle. As a manager or restaurant owner, most of your time goes to finding the best product offers and service providers for the business.

Unfortunately, this can be time-consuming. After doing all the work, there’s no guarantee you’ll find the best deals on the market. So, you end up frustrated and wasted. The good news is, a Group Purchasing Organization helps you take this stress out of the equation.

Instead of worrying about finding suppliers and service providers, comparing prices and making pricing decisions, you can use this time to do other things for the business. This is the beauty of partnering with a GPO. If you aren’t part of one, time and business management can be stressful!

3. Connects Restaurants with Trustworthy and Reliable Suppliers and Service Providers

One risk of dealing with suppliers and service providers is that they can be a disappointment many times. After a tedious procurement process, they can decide to bail out when you least expect it. This can be more frustrating if you’ve already made full or partial payments.

The damage never stops at that! Think about the customers that’ll be affected because of one supplier failing to live to the agreement. Customers are the backbone of every business, so anything that makes them feel dissatisfied shouldn’t be tolerated.

Unfortunately, it can be hard satisfying and exceeding their expectations when you’re still dealing with unreliable and untrustworthy suppliers and service providers. By working with a Group Purchasing Organization, this should be a thing of the past.

This is because you don’t have to spend more on procurement when a service provider or supplier goes missing in action. A Group Purchasing Organization is the way to go if you want to save yourself the agony of going through disappointments and frustrations from unreliable suppliers.

How to Choose the Right Group Purchasing Organization for your Restaurant

The benefits of being part of a Group Purchasing Organization are immense. Therefore, you need to be sure it’s the right one for your restaurant business when joining one. How do I do that, you ask? All you need to do is ask the right questions.

That being said, the right Group Purchasing Organizations should significantly lower your operation costs, offer top-notch products and services procurement, and grant you access to the best national and local suppliers.

The Best Group Purchasing Organization | ChefMod

If these are the questions you need to ask, it also means not every GPO will meet the criteria. Finding a reliable and trustworthy GPO right off the bat can be a hassle. That’s why we’d like to make your work easier by recommending ChefMod.

Navick Ogutu

Navick Ogutu is a marketing consultant and master copywriting specialist. He has tons of experience in B2B and B2C E-Commerce products and services promotion. Navick offers top-notch copywriting services, content marketing services, Email marketing services, Social media marketing services, SEO writing services, E-commerce store optimization and sales funnel optimization. Reach out to Navick for a free consultation concerning your content needs.