As providers of volume allowances, contract pricing, and rebates, foodservice operators and purchasing executives often express skepticism about our programs.
Why, they ask, are manufacturers giving them this money? What’s in it for the manufacturer?
We have all been told if it seems too good to be true, it probably is. In this case we suggest you look a little deeper. The savings offered to the market through group purchasing organizations are a good return for the manufacturer. Let’s examine the reasons manufacturers create and stand by their worthwhile allowance programs:
As a Group Purchasing Organization, we offer direct access to the decision makers at the foodservice companies, who manufacturers are trying to reach. By working through a GPO, the manufacturer of food or supplies can “speak” directly to decision-makers in the purchasing arena, thus saving time, money and the hassle of hunting down those important people.
The GPO, through its tracking and monitoring of purchases, knows which items are being used and where potential product conversions and opportunities lie. In this way, GPO’s can suggest product conversions that will save members money without undermining quality this in turn increases sales for contracted manufacturers. A Win-Win.
A GPO offers market information to the manufacturer on what products are needed and preferred, providing a very good forum to grow new offerings. Any new products are promoted, again, to the decision makers, so their brand remains in the forefront of the industry.
Finally, and perhaps most importantly to GPO members, these programs incentivize the members to continue buying certain products, in essence, building brand loyalty through the savings programs.
If you are not already a member of a Group Purchasing Organization, you might want to take a second look as the savings and market knowledge is highly valuable to all participants including the manufacturer.