What is a dental group purchasing organization?
Dental Group Purchasing Organizations (GPOs) help negotiate pricing and contracts on behalf of dental practices, clinics, and other dental-related businesses to help them save money on their purchases of products and services. Dental GPOs typically focus on dental-specific products like supplies and equipment. They also may provide practice management services, regulatory compliance, education, and training services. Some dental GPOs are affiliated with professional organizations and may offer additional benefits such as liability insurance, legal services, and access to clinical research.
In short, they are purchasing partners and business management groups focused on dental organizations.
How do GPOs save dental organizations money?
Group Purchasing Organizations save their members money by using the collective purchasing power of the group to negotiate better deals and contracts with vendors. These organizations can negotiate lower prices on products and services, as well as improved terms and conditions including longer payment terms or reduced minimum order quantities.
GPOs can also help their members save money by streamlining the purchasing process and reducing administrative costs. GPOs often have contracts with multiple vendors, which allows members to purchase products and services from a single source rather than dealing with multiple vendors. GPOs also sometimes provide online ordering systems, which can make it easier and more efficient for members to place orders.
Overall, by leveraging the collective purchasing power of its members, GPOs can secure better deals and contracts with vendors, which can result in significant savings for members.
How do GPOs make money?
Group Purchasing Organizations make money in two ways. Some GPOs make money by charging fees directly to their members. These fees are typically annual, a monthly membership fee, or a percentage of the value of the products and services purchased by the member through the GPO.
GPOs may also charge additional fees for practice management, regulatory compliance, education, and training services. These fees tend to vary and fluctuate in price depending on the GPO, manufacturer, and agreement terms.
GPOs can also make money by receiving rebates from vendors. Vendors will often offer GPOs a percentage of the value of the products and services that are sold through the GPO as an incentive for the GPO to steer its members towards their products and services. These rebates can be significant and can make up a large portion of the GPO’s revenue.
Overall, GPOs make money by charging fees to their members, receiving rebates from vendors, and by offering additional services, depending on their business model.
It’s important to note that SourceClub operates a bit differently than typical GPOs. We do not charge a percentage for our group purchasing services and all of our services are a flat subscription style fee. On top of that, we do not accept kickbacks from vendors. We operate very transparently to ensure our members are getting the best deal possible.
Should I join a GPO?
Whether or not you should join a dental Group Purchasing Organization depends on your specific needs and circumstances. Here are some factors to consider:
- Cost savings: GPOs can offer significant discounts on products and services, so a GPO may be a good option if your dental practice is looking to lower costs.
- Product and service selection: GPOs typically have contracts with specific vendors, so you will have a limited selection of products and services to choose from. Make sure the GPO you are considering has contracts with vendors that offer the products and services you need.
- Additional benefits: Some GPOs offer additional benefits such as practice management services, liability insurance, and education and training. A GPO may be a good fit if these are important to your practice.
- Contract terms: Before joining a GPO, make sure to review the contract terms carefully. Some GPOs require members to purchase a certain percentage of their products or services from the GPO, while others may have minimum purchase requirements.
It’s also important to do your own research on the GPO you’re considering. Look at their track record, the vendor(s) they work with, the benefits they offer, and how their member pricing is structured. Contacting current members of the GPO can also give you a better understanding of the GPO’s strengths and weaknesses.
Want to hear from some of our clients? We would be happy to send a referral your way so you can make an informed decision.