As a purchasing professional, it can seem like your biggest hurdle is figuring out how to do more with less. Getting the highest quality product for the lowest possible cost can be a challenge. The primary responsibility of a purchasing department is to procure goods and services for an organization, but determining the balance between locally managed and quoted agreements and leveraging the work of other agencies is part of the role. Working together with others can often yield better results than working alone. That’s especially true in negotiating prices. Joining a network of like-minded professionals as part of a cooperative contract provides an innovative way to get better prices and save time.
What Cooperative Contracts Are and Why They Work
A purchasing cooperative is an arrangement between businesses to combine demand to get lower prices from suppliers. Cooperative contracts are most commonly used by counties, municipalities, school districts, colleges, and universities to streamline purchasing. Cooperatives vary in size, but most are based on voluntary membership and democratic leadership. In order to use a cooperative contract, an organization usually must confirm their eligibility. While processing and assessing options, the purchasing agent or manager needs to access a Request for Proposal (RFP). The RFP information can be used to ensure that local requirements were met through the competitively-bid and legally-awarded contracts offered.
Cooperative contracts can provide significant benefits for all parties involved. Here are the three biggest advantages that using a cooperative contract can bring to your organization:
1. More Demand Lowers Prices
Purchasing departments’ budgets can feel like they’re getting smaller and smaller. The ability of a purchasing agent to precisely budget costs can have a direct impact on an organization’s profitability. Cooperative contracts provide members with access to an aggregate volume of specific supplies. This results in better pricing than a purchasing department could have acquired on its own.
2. Streamline Purchasing by Eliminating Steps
Procurement professionals have a lot of moving pieces to manage. Tasks such as researching the latest product categories, sourcing competitive quotes and negotiating pricing for the products they need can be time-consuming. Cooperatives have a contract development process in place to eliminate these tasks. This allows the purchasing department to focus their time and resources on more important projects. The entire purchasing process is streamlined through the use of these contracts.
3. Growing Your Network
Cooperatives act as an extension of a purchasing department to save time, money and resources. They also provide a way for members to gain education and training, at the same time growing their personal and professional network. By becoming a member of a cooperative, your organization becomes part of a tight-knit network. Take advantage of this network by attending cooperative events and staying up-to-date with exclusive training. Engage with other members and leverage their expertise.
Find the Right Fit for a Successful Partnership
While cooperatives provide many benefits and advantages, it is important for a purchasing department to do its due diligence before considering the use of a cooperative contract. Research different cooperatives and see if any are relevant to your organization. Ask if the cooperative you want to join charges a membership fee or requires a minimum purchase amount. Finding a cooperative contract that is a great fit for your organization means saving time and money, all while gaining access to many more products and services than would be available through one contract. Remember, there’s always strength in numbers.