By Matt Ellis
Every year, millions of Americans purchase memberships to warehouse clubs – like BJ’s, Sam’s Club and Costco – to reap the savings of buying in bulk. Similarly, service companies look for opportunities to reduce their purchasing costs so they can remain competitive and pass on savings to their clients. Recently, AffinEco joined the National Service Alliance (NSA), a group purchasing organization that “represents the best-of-the-best building service contractors and related service providers,” according to the company’s website.
AffinEco’s Chief Financial Officer Gabor Elcsics says they went with NSA because it’s one of the largest groups in their field and it’s affiliated with the Building Service Contractors Association International (BSCAI) and other industry groups with whom AffinEco is affiliated.
“They have agreements with many different vendors we use, and because they purchase in bulk, they can keep prices low,” Elcsics said.
Group purchasing organizations (GPOs) have been around for over 100 years and serve different industries. Unlike a buying group, a GPO does not actually purchase products. Instead, it acts as an agent, negotiating special pricing on a variety of products and equipment on behalf of its members.
NSA says its membership represents $3.7 billion in combined revenues, a very attractive number for manufacturers of cleaning supplies and equipment, so they listen to the needs of GPO members. “Listening to their needs has allowed manufacturers to develop new equipment and technologies that have benefited all cleaning contractors,” according to Terry Sambrowski, Executive Director of the National Service Alliance.
Having cost-efficient access to the latest and greatest products in the fast-changing world of commercial cleaning gives AffinEco a real advantage, Elcsics said. “We can pass along savings to our customers without ever sacrificing the quality of our work.”
Before joining NSA, AffinEco did its own purchasing, which Elcsics says resulted in more price fluctuation. NSA can guarantee prices for certain products, eliminating the budgeting headaches that come with variable prices. “NSA helps us analyze the products we are buying and determine if there are comparable products we can use that are priced lower. That way we can offset increases in product costs and pass the savings onto our clients,” he said.
Vendors also like working with group purchasing organizations like NSA because it gives them access to more companies, like AffinEco, which can try out new products and be more competitive when bidding for future projects.
(photo courtesy of hardroadhardware.com)