Buying group

A buying group combines the purchasing requirements of several businesses to negotiate with suppliers. Members may obtain better prices or terms through their collective volume while continuing to run their businesses independently.

The group may negotiate common price lists, consolidate orders or arrange preferred suppliers, while individual members decide what quantities they need. Membership fees, purchasing commitments and eligibility vary. Better buying prices do not automatically mean a lower overall cost if members must buy unwanted stock or pay higher delivery charges.

For example, ten independent hardware shops may combine their annual demand for a range of tools to qualify for a volume discount. A buying group can be run commercially or informally; a purchasing cooperative specifically has a member-owned structure, with governance and benefits governed by its cooperative rules.