In its simplest form, a buying group is a consolidation of similar independent companies that come together to form one large entity to provide the whole group leverage in its purchasing power. This happens because suppliers and distributors give pricing breaks to customers who buy in greater volumes, so independent small businesses are at a disadvantage.
There are already some very well-established networks and buying groups in the flooring industry. Carpet One Floor & Home, a CCA Global Partners business, has more than 1,000 members installing billions of dollars in flooring annually. Fuse Alliance and Starnet in the commercial market and Floor Expo (FEI Group) in residential housing are further examples of buying networks that have helped increase margins for their members and represent large percentages of their respective markets’ total sales. In fact, more than 100 million people are involved in some form of cooperative in the U.S. alone each year!
The Decorative Surface Solutions Group (DSSG) is the newest network catering to the decorative hard surfaces flooring market. Now in its second year, DSSG is not only providing substantial monetary gains for both members and suppliers, but it’s creating a valuable networking relationship between all parties.
DSSG specializes in the polished concrete, terrazzo and flooring industries. Although it is considered a buying group, CEO Curt Thompson says, “We don’t encourage contractors or retailers to join solely for the economic benefits. We are looking for members who are interested in being part of an organization that is improving and influencing the industry.”
Thompson sees DSSG’s organizational role as gathering together the “best-in-class” contractors from across the country to help grow the market and share practices that “allow contractors to better work on their business and not just in it.”
DSSG members can access private events which connect the group’s members and preferred suppliers. These platforms enable everyone to have “first looks” at new products and participate in the latest techniques so that group members can stand above their competition.
According to Thompson, the companies that benefit the most from a membership in an organization like DSSG are those that understand the power and value of networking and welcome collaboration. Whether formal or informal, organized sharing and ongoing conversations bring together many different professionals, owners and suppliers.
Members can share information that leads to the best practices. They can pick up a phone and ask another member for help or they can refer business when they can’t meet a client’s needs. This is a powerful tool, Thompson stresses, and is highly valued among all members.
This kind of networking and sharing also helps to take the risk out of purchasing and installing products because DSSG has already vetted the supplier and tested products and techniques with members before offering a solution.
Buying groups like DSSG can offer solutions and suggestions on general business sourcing challenges like insurance, financing, marketing, human resources and systems. The value to a member is significant and likely is one of the easiest ROI (return on investment) decisions you can make.
Author Michael Doyle is a partner at The Engagents. The company website is www.theengagents.com.