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Ask anyone working in educational procurement and you’ll hear similar concerns:
Sound familiar?
The pressure to lower costs and maintain a high quality of goods and services is significant for procurement teams and finance leaders in today’s environment.
A 2024 survey by Boston Consulting Group reported that cost management is a top priority among finance leaders for improving performance in every sector. Yet, about a third of organizations struggle to achieve and sustain cost savings. Another 27% find cost cutting hurt performance. It’s a delicate balancing act that you need to manage.
Purchasing cooperatives have become an even more popular solution, allowing school districts, colleges, and universities to pool resources to achieve greater purchasing power. You can save money on procurement in the near term and achieve long-term savings by following these tips for buying cooperatives in education.
Here are a few key ways buying cooperatives can help you gain more control of your current and future budgets, along with tips to maximize your long-term savings.
One of the most effective ways to leverage a buying cooperative is to align purchases with your institution’s long-term goals. By clearly defining your institution’s priorities, you can ensure cooperative purchasing decisions contribute directly to achieving them.
Tip: Take a long-term outlook when planning for purchases. Buying cooperatives offer bulk discounts and multi-year contracts that can reduce costs significantly over time, especially on high-ticket items.
When working within a buying cooperative, prioritizing high-cost, high-volume needs can maximize savings by taking advantage of the cooperative’s collective bargaining power.
Tip: Identify items that heavily impact your budget and leverage the combined buying power of the cooperative to lower costs. You should also look for commodity items that require ongoing purchasing, where you can achieve long-term cost savings.
Pooling needs across departments or campuses lets you capitalize on consolidated purchasing, which increases efficiency and lowers costs.
Tip: Cooperative purchasing across departments or campuses can result in substantial savings, especially when departments share common needs for supplies, equipment, or services. For example, departments like IT, facilities management, and student services can benefit from shared purchasing of items like software licenses, cleaning products, or security equipment. A centralized approach can also reduce maverick spending, which can eat away at your budget.
Contrary to the perception that working with buying cooperatives may diminish your control over suppliers, these arrangements can actually strengthen relationships and grant more influence over purchasing decisions.
The volume of purchases that buying cooperatives bring to suppliers gives you a stronger negotiating position. This can result in more flexibility with terms, responsiveness to institution-specific needs, and the ability to collaborate on product or service adjustments.
Tip: Working with a cooperative does not mean relinquishing control. In fact, buying through cooperatives enables you to play an active role in guiding how services and products evolve, ensuring they remain well-suited to your needs. Develop strong supplier relationships with a look toward the future.
In an environment where the costs of goods and services are rising, educational institutions are often vulnerable to sudden price increases. This can upend your budget and hurt financial planning.
Buying cooperatives can mitigate this risk by securing longer-term contracts with predictable pricing adjustments. For example, five-year contracts with built-in price adjustments can help you manage costs and avoid sudden spikes in critical expenses. While you may not be immune to all price hikes, you can manage them more predictably. Some contracts have annual price resets, although suppliers today are often asking for more frequent reviews.
Tip: Entering into long-term cooperative contracts ensures greater budget predictability and helps minimize the impact of unexpected costs for higher education institutions.
Data-driven decision-making is essential for optimizing spending within a cooperative. By analyzing past purchases and spending trends, you can make more strategic, cost-effective decisions.
Education-focused buying cooperatives can help you analyze your spend data and find hidden savings opportunities.
Tip: Work with your partner to conduct spend analysis. For example, E&I Cooperative Services offers its members a no-cost Strategic Spend Assessment to evaluate spend data and look for areas where cooperative contracts can reduce cost or provide opportunities for consolidation to bring more spend under budget.
Buying cooperatives present a valuable opportunity for educational institutions to achieve long-term savings. Leveraging aggregated purchasing power across multiple schools, colleges, and universities can provide immediate cost reductions and long-term savings.
Applying these tips for buying cooperatives in education can help you optimize these savings and streamline your procurement.
E&I Cooperative Services is the only non-profit, member-owned procurement cooperative that focuses solely on the education sector. This focused approach creates in-depth expertise into the unique needs of academic institutions, providing tailored, competitively solicited contracts with lower prices and favorable terms.
View available contracts at E&I Cooperative Services.
