Quote from: mademerich on August 04, 2017, 08:15:42 PM

The idea sounds nice but I don't feel it has any chance of working in the real world because there is more to group purchasing than just negotiating prices, there is also distribution etc which is much harder to organise for people that are not located in the same area.

Hey mademerich,

First of all, thanks for your contribution to our thread

However, generally (at least in the United States) the role of the GPO is to negotiate "best pricing" at vendors for its members, get the ink dry on the lower priced contract and step back and let the vendor handle distribution, or in some cases - more commonly in health care - there is even a 4th party involved - a dedicated distributor company (places like Cardinal, Medline, Owens And Minor) - but this varies based on the size of and spend of the parties involved.

In exchange for there service, typically the GPO will generate its revenue in either membership dues, administrative fees tacked onto member's orders, or in some cases both.

I personally have been lucky enough in my past positions to work alongside 3 of the 5 largest healthcare GPOs in the United States, and although they occasionally dip there toes in other revenue streams, the bulk of their business model relies on acting as facilitator/negotiator of best pricing, they tend to shy away from distribution and other tangible, high-over head thing, and the GPO business model is a very healthy one at present.

I'd love to discuss in further, if you want to PM me we can meet up on Skype or Telegram!

- Colin from Avalon