In a normal economy, the U.S. Federal Reserve typically allows for a 2% increase in inflation. As we come to the end of 2022, the annual inflation rate clocked in at 7.1% at the end of November, showing an overall slowdown, but one that’s still much higher than the government’s annual goal. This epic rise of inflation came in the wake of the COVID pandemic shutdowns, supply chain disruptions, and global strife—and has impacted everyone, but small businesses have taken an especially hard hit.
Whether it was trying to survive while being forced to close or staying afloat and competitive in a market led by big-box stores and corporations, running a small business is not for the faint of heart. According to the MetLife and U.S. Chamber of Commerce Small Business Index released in September, 50% of small businesses say that inflation is the biggest challenge facing small businesses right now, with 90% saying they’re concerned about the impact of inflation on their business.
Yet, there’s power in numbers. That’s why buying into the partnership power of a GPO, a group partnership organization, can help alleviate the burden of inflation on your business.
What is inflation?
It’s important to understand what you’re up against. Simply, inflation is a “rise in prices, which can be translated as the decline of purchasing power over time.”
Power in Numbers - GPOs Save Your Business Money
By leveraging the collective buying power of its many members, GPOs negotiate with suppliers to obtain fixed pricing, savings, and discounts (10%–30% on average) for its members that businesses wouldn’t be able to get by themselves—thus is the negotiating power of a GPO. In a down market fraught with high inflation, a GPO can ensure that you’re getting not only stable pricing, but fair pricing from your vendors.
Pricing Security - No Surprise Price Increases on Supplies & Services
Vendors can’t just hike prices without a valid reason—and if they do have legitimate cause, your GPO has to approve any changes, ultimately protecting members from indiscriminate pricing hikes.
Streamlines Processes - Simplify Purchasing
Because GPOs have a specialized relationship with your vendors, you’ll reap the benefits of their expertise in strategy and contract management. This way, you won’t have to deal with administrative duties that the team at a GPO are trained to do, and you can leverage the high-level relationships the team has built with your suppliers.
Alternative Vendors - Options for Procuring Supplies
It’s always good to have options, especially during times like this. Because a GPO has relationships with many suppliers, you’ll be exposed to alternative sources for goods and services, further securing your interests against price hikes and inflation.
Bottom Line - Your Organization Saves Money
Your GPO is constantly analyzing trends and can help keep you informed. But most importantly, by becoming a member of a GPO, you can rest assured that your supplier pricing will remain manageable, and you’ll have the peace of mind knowing you’re protected against inflation and inflationary bad practices.
If you’re a small business looking to alleviate the burden of inflation, check out our no-cost membership today!
