The function of a GPO – group purchasing organization – is to aggregate purchasing volume based on demand from a number of different member companies who participate.
By doing so, the GPO acts as a much bigger buyer, giving member companies the leverage of greater purchasing power to negotiate quantity discounts, achieve economies of scale, get preferential pricing, and realize other benefits from manufacturers, distributors, and suppliers. In the process, being part of a GPO strengthens procurement efficiency, boosts realized cost savings, and streamlines purchasing.