Group Buying - Financial

 

Etradealliance could organise group Buying Trips for the members.

Benefits of Group Buying

There are numerous benefits that Independents derive from being part of a Buying Group. In general terms these benefits can be categorized into financial benefits that go straight to the bottom line, and non-financial benefits that are harder to quantify but none the less provide real value to the members. Some of the benefits of membership are listed below: financial and non-financial.

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Financial

Improved pricing. The combined purchase volume of the Buying Group guarantees improved net prices paid. These savings will be passed on to the Member through a combination of lower invoice pricing, quarterly rebates, annual rebates and performance related rebates.

Improved / extended terms. The Buying Group often negotiates more favourable payment terms including higher prompt pay discounts and longer standard terms. Special Event buys may have even further extended terms.

Unique product offering. The Buying Group through its combined purchasing volume is able to make available to its members products that otherwise would not be available. Container Buys off-shore and Private Label Brands organized by the Buying Group allows the Independent to offer something unique and protect their margins.

More efficient invoice and payment processing. Centralized billing through the Buying Group means that most of your purchases will be paid for by a single payment to the Group who will look after paying all of your individual Suppliers. Electronic web presentation of all your invoices and statements streamlines your paperwork even further. These efficiencies will translate into a real cost saving in your accounting office or a redeployment of manpower to other areas of your business that can provide a higher return.

Improved Co-op Advertising Programs. Suppliers are keen to support Group initiatives to promote their products and are willing to fund much of this activity. This translates into Suppliers assisting with Co-op Dollars, Flyer production and distribution costs and other “POP” (Point of Purchase) Marketing Materials that a single Independent would never see.

Improved Claims handling and processing. The Buying Group’s electronic claims processing strategy ensures that it is easy for Members to submit, track and receive credits from their Preferred Suppliers. It is easy for your staff to learn the “one-way” to properly submit a claim correctly, which generates fewer errors and quicker financial benefits.

Central Billing. The centralized billing through the group also ensures you receive any credit entitlements immediately, and not applied against some future purchase. Less time spent, fewer mistakes and quicker refunds go directly to financial benefits.

Professional Marketing Programs to Generate Sales. Buying Groups do not only focus on reducing costs of materials purchased and create savings through efficient operating procedures; they also focus on increasing their Members’ sales through Professional Marketing Programs. Ultimately, the Members of the Buying Group will decide the appropriate amount of Marketing that they require. It can be as little as the joint publication of a Advertising Flyer or the full Branding and National Marketing Program that a Group like Home Hardware Stores creates for its Members.

Event Buys. Event buying reduces investment and increases frequency of replenishment. Many Buying Groups find it financially beneficial to all participants in the supply chain to have regularly scheduled “Event” buys, where Members’ orders are aggregated first before sending the order to the Suppliers to be filled. This process reduces costs for all parties, yet delivers a dependable consistent replenishment for many product lines.