What Are the Worst Reasons Not to Join a GPO?

In 2011, Spend Matters published an article called “The Five Worst Reasons Not to Join a Purchasing Consortium.” The article said, “In spite of proven savings, many companies and their procurement leaders have simply not taken advantage of the purchasing consortium opportunity.” Sadly, that’s as true today as it was in 2011. While more and more businesses (including startups and small to medium-sized business) are discovering the savings opportunities available from joining a GPO like Concerto, there are still plenty of holdouts. The 2011 article cited several reasons people are resistant to joining a GPO, but the majority of the reasons boiled down to one thing: companies think they can manage on their own.

And maybe they can, but unfortunately, small and medium-sized business are at an immediate disadvantage. Because they don’t have the leverage that other larger businesses and industries have, they won’t be able to negotiate the same kind of deals for themselves. That means their operating costs are higher and they aren’t able to compete against the price points of their larger competitors. Joining a GPO, however, allows them to aggregate their purchasing power with other GPO members to negotiate those same deals enjoyed by large corporations.

Joining a GPO isn’t about admitting defeat or saying that you don’t have the ability to find suitable vendors, either. Joining a GPO is about utilizing your internal resources as wisely as possible and freeing up those resources to focus on tasks that help you build your business instead of spending time, energy and money on vetting vendor candidates. In addition, a GPO helps you save money, and as the Spend Matters article points out, “every dollar of cost savings goes directly to the bottom line.”

Five years ago, Spend Matters asked, “If your company’s bottom line is not all it could be, why not take advantage of the power of purchasing consortiums?” That question is just as relevant to today’s businesses. Whether you are a new business or one that’s been around for years and has decided to finally join a GPO, it’s time to discover what Concerto can do for you. You can join our GPO for just $10 and start saving immediately. Start putting those dollars towards your bottom line today.

Why Venture Capitalists Should Be Encouraging GPO Membership

It looks like the Venture Capitalist boom may be coming to an end in start-up rich San Francisco. According to a February 2016 article in the San Francisco Business Times, more and more deals being made by venture capitalists include terms that signal a “cooling in investors’ appetites for pouring money into startups.” Downrounds jumped to 12% of the venture deals made at the end of 2015, a signal that startups may not be as profitable as they had been and that investors are less willing to give them large amounts of start-up capital during their initial rounds of financing.

So what is a start-up company to do? A senior partner at Scale Venture Partners said that “smart companies are cutting costs and raising capital.” Venture capitalists would be wise to encourage the business who are seeking additional funding to join a group purchasing organization such as Concerto, which specializes in resources and vendors for start-up companies. Membership in Concerto is cheap, just $10, and even that minimal cost can be quickly recouped through discounts and rebates. Moreover, joining a GPO saves a start-up business time and money on their administrative and overhead costs.

If start-ups want to succeed, they’ll need to cost cuts quickly. Joining a GPO gives them a head start on finding the vendors and resources that their business needs without spending their own internal resources on vetting each potential source. The cost-saving benefits could make the difference between success and seeking more funding from a downround, signaling impending doom for the start-up. Venture capitalists eager to help the start-ups they are funding should encourage–or even require–membership in a GPO.

What can an SMB (Small & Medium Business) Can Learn from David Bowie?

“Huh?”  You might be saying? David Bowie, that weird guy from the 70’s who had a couple of hits?  Well you ought to be saying “wow that guy who amassed a fortune of $100+ million” (when $100 million dollars was a lot of money), yeah, what can I learn from him?”  Well I’m here to tell you that you can learn a great deal.

I grew up in Des Moines, IA, not exactly the epicenter of the David Bowie fan club (although I was a member).  I was certainly his biggest and one of his earliest fans there.  I bought all his albums, joined his fan club, and bought his T-shirts and other promo stuff.  I even took a couple of Rock ‘n Roll magazines with his picture on the cover to the barber shop and asked to have my hair cut (Alladin Sane) like him.  He was a big influence in my musical taste in other artists too.  I remember the first time I found someone else who had heard of him.  I was at the chalk board in Mr. Zimmerman’s Algebra 2 class with the several others writing out equations and humming ‘Rubber Band’ [for those who thought you were a Bowie fan that was an early single later included in his first album entitled: David Bowie].  The guy next to me, Jon Vasey, stopped me mid-hum and asked me where I had heard that song.  He loved it after hearing it over the weekend on American Bandstand but had not caught the name.  “David Bowie” I told him and that moment was to become David Bowie’s most influential moment for me because Jon was to become my best friend for life after that.

Introduction is over – let’s get on with: ‘What can an SMB (Small & Medium Business) Learn from David Bowie?’  I’m here to tell you a lot!

#1 Pivot

Learn how and when to Pivot and don’t be afraid to.  David was the master at pivoting.  Most who consider themselves David Bowie fans have never heard of or heard the song ‘Rubber Band’ which I alluded to earlier, or ‘Love You till Tuesday’ or ‘Sell Me a Coat” all great songs off his first album.  In fact, I’d be pretty safe in guessing that most “fans” would not have given Bowie a second look if they had bought that first album because it was very very different from the music they would later hear on top 40 stations from David.  David knew how to keep his music changing, keep it fresh, experiment and not to rest on his current ‘Fame.’  In business we need to do the same thing.  Apple is always changing and innovating and look at where they are now.  Blockbuster refused to see the future and change and tried to keep milking the same old song.  Look where they are now (hey, where are they exactly!)  Keith Aichele, a friend and business associate of mine who is a marketing and business consultant often says “make your product obsolete or someone else will!”  This is good advice and Bowie literally lived by this mantra.  He pivoted and reinvented many times over his professional career always giving his customers something new, something fresh.  Remember Blockbuster at your next company strategic planning meeting and start figuring out how your company is going to grow and ‘Ch…Ch…Ch…Change!’

#2 Partner

David Bowie didn’t do what he did in a vacuum.  He reached out to other talented musicians at the time and collaborated with them, produced songs for them, learned from them, and often just hung with them.  These included such names over the years as Iggy Pop, Lou Reed, The Rolling Stones, The Who, Marc Bolan (of TRex), and Brian Ferry (of Roxy Music).  All these talented guys were in fact partnering or networking by today’s standards.  Not only were they influencing one another during ad hoc jam sessions but were cross pollinating their marketing.  How often do you think these guys could meet without the The Rolling Stone or other Rock based magazines reporting, annualizing, and speculating as to what they were up to.  Your marketing department or hired firm couldn’t buy such great publicity.  While your meeting with other SMBs might not hit the Wall Street Journal or get mentioned on the Fox Business Network tonight the leads you generate, the trust you gain, and the opportunities you find through partnering and networking with others is invaluable and can often lead to additional ‘Fame’ for your business and its sales.

#3 Passion

David always had passion for his music.  Remember what he wore on the cover of Alladin Sane, Young Americans, or Station to Station?  While many might say this was just marketing and selling records I beg the differ.  His album covers, in my opinion were a part of his passion for the music, they always somehow reflected his current stage of music.  Station to Station is probably the biggest example of that, Bowie wasn’t a suit guy unless it was a zoot suit, but he wore a suit on the album cover to reflect on the music inside and give you a little hint about what to expect from the music you were about to enjoy.  ‘Golden Years,’ an awesome track on that album and was a solid serious powerful song (think Frank Sinatra singing a powerful melody next to a piano wearing a suit).  I strongly believe that David’s massive passion for his music is a great deal responsible for his massive success as an artist.  You need passion for your company too.  Whether it is sells a simple product or commodity, or it sells an exciting new internet app that everyone has to have, you need to keep a passion for what you are doing and let it show through your website, packaging, design, whatever in order to stay a step or two ahead of the competition and bring something better to the table for your customers.  So “Turn and face the strange” with passion and lead your business toward success.

That’s it, that’s what David can teach both SMB’s and bigger companies.  My 3-P’s of David Bowie for SMBs: (1) Pivot, (2) Partner, and (3) Passion. These 3-P’s can be seen over and over again through the career and genius that was David Bowie.  He was not only a man of his time but a man before his time (think Bowie Bonds – but that’s a discussion for another time) and he left us way too soon.  Remember my 3-P’s of David Bowie, your company needs to practice these 3-P’ if it is going to thrive and survive in this twenty first century where “Ch…Ch…Ch…Changes” is everywhere and everything.


GPO Stands for Group Purchasing Organization

A GPO is an entity that uses the leverage obtained from aggregating purchasing volume of its members to negotiate discounts with manufacturers, distributors, and vendors.   In doing this they obtain savings and efficiencies that the member companies could not obtain on their own.  In addition, the member companies can redirect their human resources to other more valuable projects rather than supplier due diligence and contract negotiation.

GPOs were originally formed (the first I believe was formed in 1910) to help the healthcare industry and today that is still the primary operating field of the major GPO’s in the country.  There are a few outside the healthcare industry including a couple for very large businesses, manufacturing, and food.

GPOs serve as a vital resource to many companies today as an important vehicle in their supply chain.  Purchasing executives are continuously searching for the best price and service level combinations, this includes research, due diligence, and vetting. GPOs do a lot of this work for them and aggregate it in one place to assist busy purchasing departments allowing them to redeploy their resources in other more valuable ways.

The one problem with GPOs, up until now, is that they were not available to everyone.  Concerto changes that dynamic by building a GPO designed for SMBs (Small & Medium Businesses), or the “other guy”, in mind.  At Concerto we use our cost consulting expertise and the aggregated spend from our members to negotiate contract pricing that generally only the big guys get.  We give our members access to the best vendors and help level the playing field by providing the buying/purchasing power unavailable to them until now.  We will continue to build Concerto to bring our members more opportunities to save in more categories from the very best of vendors.   We at Concerto believe that SMBs are the economic and employment engines of this great country and therefor have chosen to help them save money, thrive, and most importantly to survive.

Want to start getting your admin and operating purchases at prices like the big guys AND earn a rebate on your purchases?  Want to learn more?  Stop by our website at www.concertomarketplace.com to learn more.  We open our GPO to all companies large or small and will begin full operations later in this Q1 of 2016. 

Decision Making Thoughts

Last night I had trouble getting to sleep.  All the decisions I’d made and all the things needed doing while leading a startup can lead to anxiety if you are not careful.  So instead of counting sheep I decided to count decisions that I had made during the day to see if that would help with  my current insomnia.  It  was an interesting process and culminated in the following discovery about decision making that I’ll share with you here:

  1. IconGood informed decisions are a result of getting the facts, considering the options, mulling it over and then – making a decision.  Oftentimes people can’t  take that final step and I promise you that will lead to sleepless nights.
  2. Then I found the most interesting thing about making decisions.  While thinking about one of the biggest decisions I’d made that day, and a scary one at that, I noticed I was smiling (yup in the dark – in bed) and a peacefulness sort of set in.  The point here is that I found out that by taking a few moments in retrospect to feel good about my decisions brought a clarity, confidence, and a good feeling about the decision I’d made.  This in  turn lead to my final thought I had before falling asleep:
  3. It was then that I realized I was ready, willing, and able to meet the next day head on with determination and confidence that I’d keep making good decisions.

Last decision – I’m going to do this before sleep more often… Zzzzzzzzzzzzzzzz