(Weymouth, MA) January 14, 2003…In a recently completed white paper, CAP Ventures’ analysts investigated buying groups as an emerging power channel. The results are available in a new report entitled Buying Groups: A Power Channel?

Over the years, buying groups have evolved and developed into a channel to be reckoned with in the office products industry. Their savvy negotiating skills give members competitive pricing on office products and exclusive marketing benefits including rebates and co-op funds. Today, the groups are expanding beyond the purchasing power of the past to offer additional member benefits such as centralized billing and payments and e-commerce systems. One intangible benefit of group membership is the ability for members to network with other members.

Buying groups are becoming even more powerful due to their willingness to join together with other groups. This consolidation has resulted in the emergence of a few major groups that have substantial buying power. This power even surpasses that of the major office superstore players.

Manufacturers and vendors should view these groups as a significant force in the distribution of communication supplies and should look for opportunities to partner. Nevertheless, not all vendors are eligible for participation. Vendors are reviewed on their own merits and evaluated for what their program can bring to the group in terms of added value. Vendors must have a strong program that is supported by wholesale distribution and enables dealers to buy direct.  

Buying groups are not without threats or competition. The growth of private label direct import items and the overall increased competition in the office products industry keeps these groups sharp. They must continuously scrutinize business practices to determine the most beneficial cost cutting and margin improving activities.

CAP Ventures’ white paper takes an investigative look at the power of buying groups. It presents a brief history of the channel, offers profiles of the major buying groups, and provides insights and forecast data for the future of the channel.

The complete report is available immediately to clients of CAP Ventures’ Communication Supplies Consulting Service. To learn more about the study or to make a purchase, please contact Alison Hipp at , ext. 126 or .