Cooperative purchasing is a procurement strategy where multiple organizations collaborate to increase their buying power, reduce costs, and streamline purchasing. As educational institutions continue to deal with budget constraints, staffing shortages, and increasing compliance requirements, cooperative purchasing for education has become an essential tool to enhance efficiency and affordability.
By leveraging collective demand, educational institutions can benefit from cost savings, simplified procurement, compliance support, and high-quality vendor relationships.
Cooperative purchasing allows you to procure goods and services at lower costs by negotiating bulk discounts. This approach ensures better pricing, favorable contract terms, and improved operational efficiency.
However, not all cooperative purchasing organizations operate the same way. There are different types of group purchasing organizations (GPOs), including:
E&I Cooperative Services is the only nonprofit member-owned sourcing cooperative that focuses solely on education, offering tailored solutions designed to meet the unique needs of educational institutions. This focus produces a deep understanding of the unique needs of the education community and results in cooperative contracts that include solutions and terms that meet those needs.
Consumer cooperatives are organizations that negotiate contracts on behalf of their members, allowing participants to collectively benefit from increased purchasing power. Unlike many other GPOs, E&I Cooperative Services is owned by its members, helping to ensure that decisions align with institutional needs.
If you’re feeling overwhelmed, having to do more with less, or getting increased pressure to reduce costs, cooperative purchasing for education is an ideal solution. Even if you’re not dealing with these issues, cooperative buying offers significant benefits to overcome other challenges, including:
By leveraging cooperative purchasing for education, you can streamline procurement while ensuring compliance and cost efficiency.
You also gain greater control over the entire procurement process. This is critical, as procurement teams today focus on strategic value rather than just cost savings. This is a big shift that turns procurement professionals into data analysts, allowing teams to make even bigger contributions to the success of their schools. Strategic sourcing considers the entire lifecycle of goods and services, including both short-term and long-term costs.
Against this challenging backdrop, let’s break out the key benefits of cooperative buying in education, including:
How does the price difference benefit a cooperative member? Members can reduce the actual costs of goods and services and also reduce administrative overhead to produce further savings. The difference can help meet budget goals and free up time to work on strategic initiatives rather than buying.
Colleges and universities can apply these benefits across a wide range of needs. Need to replace aging IT infrastructure, new surfaces for your athletic facilities, lab supplies, or classroom furniture? You can find cooperative contracts that cover all of these needs.
Need specialized consulting such as Title IX regulations or help managing finances? You can find that, too. Here are some of the most common categories.
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COMMON BUYING COOPERATIVE PURCHASES |
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Athletics |
Professional Services |
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Food and Food Services |
Financial Services |
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Office and Classrooms |
Logistics and Travel |
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Facilities and MRO |
Research and Scientific |
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Information Technology (IT) |
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When you partner with an education-focused cooperative like E&I Cooperative Services, you also get two other significant benefits: category specialists and collective knowledge.
Category specialists have deep expertise in the goods and services schools need. They have relationships with key suppliers and often help shape product development pipelines to ensure your needs are met. This expertise is especially valuable for procurement in areas where you may have limited resources or lack experience. Category managers can provide insight and guide you as you make purchasing decisions.
Another area where higher education institutions benefit is through the collective wisdom of the cooperative and other members. These organizations are staffed by teams of procurement professionals. Many offer webinars, resources, and online resources to share best practices.
E&I Cooperative Services has a team of experienced procurement professionals, many of whom came directly from higher education procurement. E&I’s nearly 6,000 member institutions also take part in shaping the procurement process and sharing proven strategies to improve purchasing.
Now we’ve examined what are the advantages of cooperatives, let’s take a look at some of the challenges. These include:
In contrast, E&I Cooperative Services offers free membership with no minimum purchasing obligations. Institutions can choose from various cooperative contracts or work with other suppliers as needed. Many contracts also include carve-outs for diverse and local suppliers, ensuring inclusivity in procurement.
While cooperative buying in education includes standardized contract terms, there are often options to customize contracts further or add additional services. In most cases, suppliers commit to volume discounts but the number of purchases you make is up to you. Some vendors will provide pricing tiers, which offer larger discounts for higher purchase amounts.
Integrating cooperative purchasing into your academic institution is a smart idea for procurement and finance teams looking to lower their costs and simplify their procurement process. However, there are a few steps you can take to maximize your benefits.
Before joining a cooperative purchasing group, you should evaluate your most frequently purchased goods and services. Identifying procurement priorities helps determine the best cooperative contracts to leverage.
For example, you can compare any current contracts you have with those available through E&I Cooperative Services to see if there are immediate savings. E&I members can also take advantage of a no-cost Strategic Spend Assessment. E&I analysts will conduct a comprehensive analysis of your existing spend, compare it to E&I contracts, and look for areas to consolidate purchasing for greater volume discounts or bring more spend under contract to lower costs.
You should also compare different cooperative purchasing organizations to find one that aligns you’re your needs. Besides contract availability, you may want to look at opportunities for supplier diversity, sustainable goods, and whether the cooperative is a nonprofit or for-profit entity.
Some cooperatives require membership fees, while others, like E&I Cooperative Services, offer free membership with no minimum purchasing obligations. You should review the cooperative’s policies, governance structure, and contract flexibility to ensure they meet your institutional requirements.
Successful implementation of cooperative purchasing for education requires support from procurement teams, finance officers, and your institution’s leadership. Presenting data on cost savings, compliance benefits, and time efficiency can help secure approval.
Once your academic institution becomes a member, you should integrate cooperative contracts into your procurement strategy. This involves creating specific criteria for when cooperative contracts can be used and training your staff on how to utilize cooperative agreements to maximize contract benefits.
Even though many schools have utilized cooperative purchasing organizations for years, there are still some common misconceptions. Let’s take a look at some of the myths and facts.
Smaller schools and colleges often assume cooperative purchasing is designed for large institutions. In reality, cooperative contracts can produce significant cost savings for smaller entities by accessing discounts and streamlined processes that would otherwise be unavailable to them.
Some institutions fear that cooperative agreements do not allow for customization. However, many cooperative contracts include flexible terms that can be adapted to specific institutional needs, ensuring your unique needs are met.
While some cooperatives charge fees, organizations like E&I Cooperative Services offer free membership. Additionally, E&I returns a portion of proceeds to members at year-end through patronage refunds based on your level of participation. This can turn your purchasing into revenue and help you meet budget goals.
Cooperative purchasing offers a strategic solution for schools and institutions to optimize procurement, save money, and streamline processes.
By leveraging cooperative contracts, you can reduce costs, enhance efficiency, and ensure compliance with procurement regulations.
Academic institutions interested in exploring cooperative purchasing can view available contracts and become members of E&I Cooperative Services today to start saving and improving your procurement outcomes.
How do cooperative purchasing organizations select their vendors?
Cooperatives typically conduct a rigorous vetting process, which includes competitive solicitations, evaluations based on quality and pricing, and compliance with procurement laws. This ensures that institutions receive reliable products and services from trusted suppliers.
Are cooperative contracts legally binding, or can institutions opt out at any time?
Typically, cooperative contracts span multiple years, obligating suppliers to provide goods or services for that time period under the terms and pricing in the agreement. For institutions, cooperative purchasing agreements provide flexibility, allowing institutions to use contracts as needed. However, terms vary by cooperative and contract, so make sure to review them carefully.
Can cooperative purchasing be used for specialized or niche products?
Many cooperatives offer contracts for specialized needs such as scientific equipment, research supplies, and food service. You should explore contract offerings to determine whether your specific needs are covered. One benefit of partnering with an education-focused cooperative is that they negotiate contracts for the goods and services schools need.
How do you measure the success of cooperative purchasing for education?
Schools and colleges can assess cooperative purchasing success by tracking cost savings, procurement efficiency, vendor performance, and contract utilization. Data can showcase the benefits of partnering with a cooperative purchasing organization.
If you would like to see more examples of cooperative purchasing for education or discuss specific ways that E&I Cooperative Services can benefit your school district, college, or university, call one of our procurement experts at 800.283.2634 or find your dedicated E&I rep.
