Group purchasing allows farms and businesses to collectively purchase supplies in order to save money and improve availability. The document discusses examples of group purchasing in the horticulture and dairy industries. In horticulture, groups were able to purchase cardboard, plastic pots, and natural gas at lower prices by pooling orders. Dairy farms also saw savings by collectively purchasing milk house materials, breeding supplies, and fuel. The benefits of group purchasing included lower costs, less time spent shopping, and more consistent product availability.
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Group Purchasing
1. Group Purchasing
Case Studies in the Horticulture &
Dairy Industries
Walter N Nelson
Sr. Extension Resource Educator
Horticulture
South Central New York
Buying groups?
Group of firms collectively purchasing
inputs for their individual firms
Reasons for their existence
Mechanics of the groups
Successes and failures
2. Why?
Save money
Improved availability of product
An alternative to traditional brokers &
retail vendors
Save time shopping around
Known costs for a given period
Horticulture Industry
Specific horticultural inputs provided by
brokers
Generic inputs from general economy
3. Cardboard
One owners solicited bids & offered to pool
an order. (~20 years)
Pooled order, direct delivery, one invoice
from manufacturer to leader who bills again
all participants
Challenges:
Pooling orders!!!!! (~1% surcharge per box)
Bad debts
Benefits: $$$
Plastic Pots
One owners solicited bids & offered to pool
an order.
Pooled order, direct delivery, (initially drop
shipped)
Distributor invoiced each participant
Challenges:
Pooling orders!!!!
Early deadlines
Similar containers/same market
Small % of cost of production
Benefits: $$$
Up to 13% less
4. Natural Gas
One owner solicited vendor
Vendor collects bids, invoices direct
Savings variable
Dairy Industry
Milk house materials
Breeding supplies
Fuel
Fertilizer
5. Dairy Situation I
Direct delivery & invoice
Challenge
Participation
Uniform products
Benefits:
Cost savings
Less time shopping
Dairy Situation II
LLC
Hired Nutritionist
(also acts as buyer)
Group does milk marketing
6. The Next Step
Like Partners/Colleagues
Solicit sources/bids
Do you have to have…
Keep It simple, uniform
Fewer vendors
Resources
Monika Roth, CCE Tompkins
Wen fei Uva, Cornell AEM
Thanks for help from:
Shawn Bossard, CCE Cayuga
Janice Degni CCTTS Dairy Team
Walter N Nelson
Sr. Extension Resource Educator
Horticulture
South Central New York