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Thread: Buying groups

  1. #1
    OptiBoard Apprentice classicz68's Avatar
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    Question Buying groups

    I'm thinking of joining a buying group, any advice on which one is better?

  2. #2
    Sawptician PAkev's Avatar
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    Pros:

    You write one check for several or all purchase orders.

    Credits of one vendor can go against purchases of other vendors.

    You recognize a fair discount which you could otherwise not obtain through a relatively low volume retail operation.

    You can compare vendor value side by side from the buying group statement detail.

    Cons:

    Payment terms are fairly rigid to statement due dates or else discounts are forefeited.

    You may find yourself passing on quality frames or a good deal because vendor does not participate in buying group.

    If ordering and billing are not planned appropriately, you can find yourself paying for product before you even get a chance to get it out on the boards.

    Unethical reps can pad orders which go un noticed a lot easier than getting a serperate statement from that vendor.



    To answer your question you should ask yourself a few questions with the above factors in mind as to which buying group best meet your needs. I currently use one (Block) for uncut purchases and another (Nova Med Alliance) for frame purchases so that I can keep things a little more organized and one bill is due in the middle of the month and the other is due at the end of the month.

    my 2 pennies
    Kevin

  3. #3
    OptiBoard Apprentice classicz68's Avatar
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    Is anybody else going through a buying group? Or do you find that buying groups are a waste of time.

  4. #4
    OptiWizard
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    I find buying groups to be a help when first starting out.

    With the buying group, you just fill out one credit application, not one for every company under the sun. So it is easy to experiment with new vendors without the paperwork.

    You get a decent discount even if you are small volume.

    Later, you can go direct with your favorite companies and probably get better discount and payment terms.

    Now, I'm mostly direct as I've cut down my number of suppliers.

    I use Vision West, not as much as I used to, but still use them.

    Harry

    Note: .A major advantage of a buying group is that returns are credited to your buying group account, not the company you returned to. Some companies are late giving credit, but get vicious to get payment on the "replacement" frames that were shipped before the credit issued.

  5. #5
    Master OptiBoarder Texas Ranger's Avatar
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    classicz68, I've used HMI in Vicksberg,Ms, for about 25 years, this is just good business, and will save to time, money and a lot of checks. just be sure to pay by the due date, or you can lose all you saved, but that's how all discounts work, you must pay on time...

  6. #6
    Master OptiBoarder varmint's Avatar
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    Again, I agree with Texas, I've been using HMI for 20+ years with not one problem. They also let you do EFT over internet to pay statement right up to due date.
    Can't say the same for others I've tried. Have had numerous problems with others w/credits, one closed down, and some won't give full discount without volume purchases...duh, what's a buying group for?

    I've got to find something to disagree on with Texas Ranger so he don't get a complex.

  7. #7
    Master OptiBoarder Jeff Trail's Avatar
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    It is hard to say which is better for any one person, a lot depends on your volume, the lines of product offered and the fee's and shipping :)

    I would sit down and figure out
    1) what is my exact volume average monthly in each line vd. buying direct.
    2) look at the list group price BUT do not forget to add cost of shipping and what you group fee is (if one is charged) and how much depending on the volume that adds to the price.
    i.e. I get frame A for 10.00 direct from the factory, and 7.00 from the group (add shipping and "fee" to the price and without volume it may add up to that 7.00 frame actually costing you MORE.
    (be careful and do your HOMEWORK)
    3) check the product offered by each group, figure your prices, call the factories direct and get pricing. I'm still amazed by some of the groups out there where once you did the math it actually ended up costing less by just getting it directly from the company..
    4)read than re-read than read the contract again, a lot of them love to hide little add ons all through the package.

    Do NOT be shy about calling any vendor you have and ask about getting a better price, I'm still amazed by the people plugging a long and as their bussiness grew they did not go back and ask the vendors for better pricing...
    Don't get caught in a long term situation where you get stuck with fee's for a lot of product you can not use or do not come into use in your store, just because a group has a lot of product on the list and you use only a small amount the "fee" will more than eat up your savings.

    Common sense is your best weapon in deciding on a group, YOU know what products you like so do a lot of shopping, it is good idea to get a list going but what works for one optical maybe be a cash hog for another. Myself I still think it is better to start with direct purchases and figure out your budgets and costs and work from there. Call the companies and ask what is the best deals, how much you need to buy to get it. Being a "smart" bussiness person is more important to understand than just tossing your eggs all into one basket..one of those eggs hid under the rest goes rotten and cracks it makes the rest of them pretty stinky :)

    Jeff "common sense and compare compare compare magic phrase for the day" Trail

  8. #8
    Bad address email on file Lisa Lingard's Avatar
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    I guess I should start out by saying that I happen to work for Vision West Inc. (VWI) and I am very familiar with the various buying groups and their offerings. At the very least, a buying group can provide discounts you may not earn on your own due to volume requirements. And contrary to popular misconception, there are only two ways for a BG to collect fees to cover over head. A BG can either withold the full discount it has negotiated from a vendor or it can charge an admin. fee. Vision West charges an admin fee (from 1.5% to 5% based on volume) on the DISCOUNTED amount, which when compared to the "withholding discount" method, saves our members $$.

    Most BG's are owned by groups or individuals for the purpose of making a profit. We are the only BG in the country owned by a non-profit optometric association. We directly support or sponsor society's, associations, and groups for all three "O's" by returning a percentage back to the profession. While it is true that a larger volume account will most probably do better with discount going direct, we have many members that choose to use VWI for those secondary vendors that they use. One of the concerns Ive heard from members is that they will have to write one big check by month's end. Im not sure about all BG's, but VWI allows members to make 2 payments thus aiding the cash flow.

    Lastly, BG's should fill the void by offereing education, practice management tools and services, asset preservation, and additional value programs and promotions. I'd suggest asking some of these questions of your perspective BG, along with doing the savings comparison when you make your decision whether to join or not.

    Take Care,
    Lisa Lingard

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    OptiBoard Apprentice gpw_ww's Avatar
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    Buying Groups

    I use many buying groups..ado, block, c&e, Newton,and optical Synergies and I use them cause I get paid. Being a wholesale lab, I don't have to fight with customers to0 get paid!

    Actually, I've never had a problem with them...

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