Buying Group FAQ
Buying Group FAQ
1) What is a buying group?
In its simplest form, a buying group is the coming together of similar independent businesses to leverage their combined purchasing power to receive better net costs and terms on the products they buy. Successful buying groups bring efficiencies to the supply chain rather than simply flexing their “market power” to extract a better deal.
Efficiencies are created when Suppliers can rely on the buying group to perform functions more cost-effectively for its Members as a buying group, than the current model of each Supplier dealing with each Independent separately.
Buying groups are most often measured in improved input costs, but more importantly, as a place where best practices, peer-to-peer interaction is provided in an exclusive, respectful and inclusive environment.
2) Why are buying groups needed?
Buying groups level the playing field for smaller independents competing against larger national & multi-nationals as well as hyper-local brands.
Add value for both buyers and sellers by grouping small, spread out members into one cohesive entity.
Allow independents to collectively execute more like larger players in their marketing, purchasing, payment, and rebates.
Greatly reduce or eliminate geographic and size barriers for growth.
Provide suppliers with greater assurance of account collection
3) How do buying groups work?
A buying group does what it says it will do - delivers purchasing volumes in exchange for rebates.
A buying group gives compelling incentives and encouragement for members to focus purchases to the group's suppliers.
A buying group recognizes suppliers for their commitment to the group.
A buying group allows access to the true decision-makers in each member company.
A buying group makes it easy for suppliers to do business with the members.
1) Will I be required to convert all my purchases from my current suppliers to all BevPRO Supplier Partners?
No! Members are encouraged, and rewarded, but are not required to switch all their purchases through to the Group's participating Supplier Partners. We believe that Members should always do what is right for their business and we would never stand in the way of your independence.
For those Supplier Partners you do purchase from, you will simply enjoy better net costs and off-invoice advantages than you previously did before joining the Buying Group and that supplier will enjoy greater sales opportunities and operations efficiencies.
In other cases, a BevPRO Supplier Partner will not be the Supplier that you currently purchase a certain product category from and, in most cases, the BevPRO Supplier Partner in that product category will contact you to review their program with BevPRO, their value offering and then will assist you in a possible transition to their BevPRO program.
3) How does the Selection Committee Work?
For each major product category, a rotating committee of your fellow members will be chosen to participate at the Supplier Selection Meetings. Suppliers are approached by BevPRO to present a rebate program at the meeting and are then vetted and voted on by members present at the meeting. Supplier criteria are based on a wide set of criteria which include factors on pricing, rebate program, payment terms, return policies, service levels, and the brand acceptance.
5) How are the rebates paid to Members?
Members will receive rebates on their purchases made with our Supplier Partners. On an annual basis, and when the funds have been received from the Supplier Partners, BevPRO will pay out rebates directly to Members via EFT into their accounts. As the group grows in Membership size and the Members continue to increase their purchasing volumes with our Supplier Partners, the rebate payments will continue to grow year after year.
7) What are the criteria for a Membership?
BevPRO Membership is for Processors of craft beverages in North America. Membership is by invitation only, with the over-riding criteria that the producer runs their business ethically and sees the value in working with others to help grow their business and the push to retain independence in the industry. All Member applications are reviewed to ensure that they are credit worthy and suppliers are contacted to ensure that the potential Member acts ethically within the industry.
2) What if My Suppliers Aren’t Involved In BevPRO?
One of the major benefits of a Membership in BevPRO is your involvement in the selection of the Supplier Partners that provide the best overall value proposition for each product category. Every Member has the opportunity to sponsor a new Supplier Partner and bring them forward to the Group for evaluation. The Group will then approach the potential Partner on your behalf and will work with them to prepare a submission to the supplier selection committee.
4) Will Members know the negotiated supply programs with each Supplier Partner?
All “non-confidential” details of the supply programs negotiated with the Supplier Partner will be available exclusively for Members only. These details will include supply program contract dates, standard payment terms, freight allowance policy, and all the Supplier’s contact information. You will not have documented access to details of the confidential rebate programs, allowances or special deals for Members. Only the Negotiating Committee and Buying Group office will know the full terms of the rebate programs. Strict enforcement of our Supplier Partner confidentiality enables Suppliers to offer better overall pricing only to Members without the risk of competitors or other of the supplier’s non-buying group customers knowing and saying, “me too!”
6) Why does BevPRO negotiate rebates instead of getting all the discounts upfront at the time of invoicing?
Rebates are a powerful tool for both the Supplier Partners and the Members and when used properly will incent a mutually beneficial behaviour. Suppliers like rebates for two main reasons;
This helps to protect the “street price” of their products
They can structure the rebates as such that they only pay for member performance and loyalty
The Members benefit from rebates because they are able to protect negotiated pricing and the margins made on the sale of the products. Then, when the rebate checks come in, they go straight to the bottom line!
8) How much does a membership cost?
Each Member will be expected to pay a very small one-time Set-up Fee and monthly Membership Fee. The Monthly Membership Fees are designed to ensure Member participation and engagement at annual events. These funds are used to help cover Member airfare, accommodations and meals to attend the annual Member’s meeting.
If you decide, for whatever reason, BevPRO is not a fit for your business, you may leave at any time.
Supplier Partner FAQ
1) How are earned rebates returned to BevPRO Members?
Rebates are returned to each Member as they have been earned - proportionate to their purchases. Specific Supplier Rebate “pools” are divided proportionately based on each Members spend with that Supplier Partner and their rebate categories.
BevPRO Buying Group’s unique central invoicing and payment model allows line-item tracking and a complete audit trail to ensure each Member receives their portion of any earned rebates.
3) How confidential are the rebate programs negotiated with the Supplier Partners and BevPRO?
Confidentiality of information is important in any business, but even more so in a buying group made up of independent businesses. We ensure that all parties involved commit to and ensure that all the detailed confidential aspects of the Rebates Programs negotiated with the Supplier Partners are kept strictly confidential.
The uniqueness of Supplier programs is such that the enhanced pricing, terms and other considerations can quickly be lost if the ‘deal’ is known to Member competitors and non-BevPRO Group suppliers. Many advantages gained through group negotiations can be lost because the deal has become known to the trade.
2) Are BevPRO Members required to support and switch to an approved BevPRO Supplier Partner?
The short answer would be no. Each BevPRO Member is an independent Producer and can support the approved BevPRO Supplier Partners when it makes sense for their business.
However, experience has proven that when our Member Committees endorse a new Supplier Partner our Members take the time to very seriously consider the offering from the Supplier Partner. Peer endorsement of a Supplier Partner is powerful. Your current customers within BevPRO also serve as very strong advocates for your products and services.
Members are encouraged to support BevPRO Supplier Partners for the overall benefit of the Buying Group, remembering rebate programs are designed to incent Members to switch to BevPRO Supplier Partners.
4) What is the process to become an BevPRO Supplier Partner?
Suppliers may express their interest to become an BevPRO Supplier Partner by reaching out to the Buying Group. The first question asked will be if you currently deal with any of our Members, and we would determine if that Member would endorse you.
BevPRO then invites pre-qualified suppliers in a specific product category to present their value offering. Supplier program criteria is based on a wide set of factors from competitive local pricing, rebate program offering, payment terms, return policies, service levels, and the brand acceptance.