Group purchasing organizations (GPO) are organizations that can help wholesalers to buy goods in bulk.
If you want to grow your wholesale business, you should start using a GPO. That’s because they can help you save time and money and expand your business to new heights. Also, a proper inventory and order management system like Megaventory will relevantly help you identify which and how many goods to buy at what time so there’s always enough stock and proper warning of a shortage.
This article will show you how GPOs can help your wholesale business and other tips that you can apply to grow it.
What is a Wholesaler?
A wholesaler is a service provider that offers to purchase a large volume of goods from manufacturers, producers, or importers. There are two types of wholesalers:
- Merchant wholesalers. These people buy products from a manufacturer and then resell them to retailers.
- Purchasing agent. These people purchase products from a distributor and then resell them to other companies.
When talking about a wholesaler, they usually engage in a business-to-business transaction. That’s because the retailers often can buy items in bulk.
What is a Group Purchasing Organization?
A group purchasing organization or a GPO is an organization that negotiates discounts. This is common among hospitals, labs, clinics, and other healthcare providers who want to receive bulk purchase discounts from manufacturers, suppliers, and distributors.
The GPO negotiates prices and gathers volume discounts to offer better prices than what providers would be able to get on their own. The GPO’s negotiated contracts are not exclusive, meaning that they can also contract with providers outside of the GPO. In addition, GPOs can deal with products from various vendors in search of an affordable option.
How GPO Helps Wholesale Businesses
The members of a GPO send all their purchase orders to them, who then negotiate for the lowest prices against these vendors. If successful, they then distribute these lower prices back to all the member companies.
Some benefits of being a member of a GPO are:
- Saving money on purchases
- Getting access to suppliers that you may not be able to contact easily
- Working with other businesses in your industry
Tips to Grow Your Wholesale Business
Now that you know what GPO is and how it can help your wholesale business, here are seven growth tips to keep in mind:
1. Create a solid web presence
Web or online presence is the extent to which anyone can find a business on the Internet. It can either be through social media platforms or their website that they own and maintain themselves. Knowing how the Internet can expand your reach, having a solid web presence can help you get more customers and reach more clients.
2. Improve your wholesale marketing strategy
To be successful in the modern world, a wholesale business must have a well-defined and researched marketing strategy. But how would you know if your marketing strategy works?
Some questions you might wish to ask yourself to evaluate whether or not you need a change, of course, are the following:
- Are you unclear about who your target clients are?
- What about the promises that you’re making? Are you delivering them?
- Are you reaching the goals you’ve set for?
If you answer no to any of these, it’s time to reevaluate your current marketing strategy.
3. Give excellent customer service
Whether you’re in retail or wholesale, it’s crucial to provide excellent customer service. That’s because this will lead to increased sales, increased customer satisfaction, and building trust in the company. Therefore, you should continue or start investing more in your customer service.
4. Offer deals and discounts
Providing deals and discounts can help you foster customer loyalty and increase your average order value.
If you provide deals, you may attract new customers to your business. They may not know about you or what you have to offer, but now they are willing to take a risk by purchasing from you because they can save money if they buy now. Similarly, existing customers are more likely to buy again if you give discounts because now it’s easier for them too!
5. Streamline your operations
Wholesale businesses are more likely to have lower operational expenses than retail businesses. They don’t need to allocate time and resources towards product placement and customer service. Plus, buying in bulk can save them money on acquisition costs.
6. Integrate a good inventory, purchasing, payment, and delivery system
Effective inventory tracking is important for wholesale businesses because it allows them to fulfill orders on time and accurately. A wholesale business should accept different forms of payment, such as credit cards and cash. It should also make it as convenient as possible for clients to shop around. And finally, it is essential to have a delivery system for an organized and satisfactory shipping experience from the customer’s side.
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7. Use additional funds
Staying competitive is one of the essential aspects of running a thriving wholesale business.
With the right financing plan, you’ll be able to take your business to the next level. As long as your account for the expenditures properly, using additional funds to level up your business should be fine.
With the help of GPOs, wholesale businesses can save on overhead costs, which translates into additional profit. Plus, following the tips listed above can help your wholesale business grow and succeed.
Author Bio
Juliette Anderson is an Outreach Community Specialist for an e-commerce fulfillment company that specializes in partnering with online sellers who have an average parcel weight of 5+ pounds or greater. She works hand-in-hand with e-commerce stores to achieve optimal sales for four years already. Her specialty lies in social media marketing and paid promotions.