There are nearly 600 group purchasing organizations in the U.S., accounting for billions of dollars of procurement spend annually. Some are general-use business GPOs while others specialize in certain industry sectors.
With these different types of group purchasing organizations available, procurement teams must look closely at how each model aligns with their goals, governance structure, and spending categories.
The structure of a GPO significantly affects its capabilities, priorities, and value to your institution. Choosing the right type means ensuring that the contracts, service model, and governance align with your institution’s procurement needs.
Let’s look at the pros and cons of each type.
These GPOs are typically run by federal, state, or local governments and offer contracts to public sector entities, including public colleges and universities. Their contracts follow public procurement laws and prioritize transparency and equal opportunity.
Pros | Cons |
Transparent, compliant bidding | Limited customization |
Designed for public institutions | Often slower procurement cycles |
Stable pricing with predictable terms | Smaller supplier pool |
Standard procurement processes | Often limited to specific jurisdictions |
Regional GPOs serve institutions within a specific geographic area. They focus on leveraging local supplier networks and fostering community engagement through purchasing.
Pros | Cons |
Support for local and regional vendors | Narrower contract catalog |
Proximity-based service and logistics | May lack national scale or category depth |
Strong relationships with local suppliers | Not always aligned with large-scale or diverse procurement needs |
These organizations operate as private businesses with revenue-driven goals. For-profit GPOs often serve multiple industries like healthcare, industrial, or commercial sectors with large-scale, high-volume group purchasing contracts.
Pros | Cons |
Aggressive pricing due to large-scale buying | Contracts may not be tailored to your industry sector |
Broad supplier networks across industries | Profit-driven decisions may not align with institutional values |
Efficient contract rollouts | Lower transparency and member control |
Non-profit GPOs operate without a profit motive, often reinvesting earnings into services for members. These organizations may offer patronage refunds or other financial incentives and are typically guided by a mission to serve their members’ best interests.
Pros | Cons |
Member-centric governance and transparency | Smaller scale than some corporate GPOs |
Mission-driven, with aligned values | Potentially fewer contract categories |
Patronage refunds or rebates based on usage | May require more engagement to realize full value |
Industry-specific GPOs focus on a single sector and develop contracts that reflect the industry’s specific requirements, regulations, and purchasing patterns. This specialization often leads to better alignment with institutional needs.
Pros | Cons |
Contracts tailored to your sector | Less supplier variety outside core focus areas |
Easier adoption across departments | May not support needs outside core categories |
Deep procurement expertise in your industry | Can be overlooked by institutions seeking one-size-fits-all solutions |
To make things more complex, types of group purchasing organizations may combine multiple aspects. They may be for-profit and industry-specific, national or regional, or other combinations.
Choosing the right GPO means finding a strategic partner that fits your institution’s culture, compliance requirements, and long-term procurement goals that can also produce the cost savings you need.
How do you get started? Here are a few best practices.
Ultimately, you want to partner with a group purchasing organization that saves you money and aligns with your mission.
E&I Cooperative Services is the only member-owned nonprofit sourcing cooperative focused exclusively on education. With 6,000 member institutions including K–12 schools, colleges, and universities, E&I is uniquely positioned to support the specialized procurement needs of education.
As a nonprofit cooperative, E&I reinvests in its member community rather than generating profit. This ensures that every initiative is guided by member priorities, and not shareholder returns. E&I members also have the opportunity to help shape sourcing decisions. Through category and strategic advisory boards, institutions have a voice in sourcing priorities, compliance needs, and emerging challenges.
E&I also invests in its members’ long-term success. Programs like EdProHub, an online community for sharing ideas and best practices, and the Next Gen Leadership program designed to nurture the next generation of procurement professionals empower members to grow their careers and institutional impact.
E&I Cooperative Services offers the scale of a national GPO with the heart of a mission-driven partner. For educational institutions seeking both savings and strategic alignment, E&I provides a powerful path forward.
Explore the benefits of E&I membership and start saving money on group purchasing today. Find your E&I representative to learn about hundreds of available cooperative contracts and discover how member-owned sourcing can reduce your procurement costs.
