The downside of concentration
With such cooperation, there is often better risk management because you can respond more effectively to supply problems, quality issues or volatility in prices through the joint organization. In addition, it can contribute to centralized setting and implementation of sustainability goals, which is extremely important in these times. However, by concentrating purchasing, there are also weaving and systemic errors lurking, which then immediately affect all purchasing.
Purchasing conditions
When purchasing, pay attention to the use of your purchasing terms and conditions. I often see back in practice that agreements are made by e-mail, quickly placing an order back and forth, without paying attention to which terms and conditions are applicable. It is usually the case that the seller is more alert to this than the buyer, and therefore provides his or her terms and conditions in a timely manner (first) - whether or not by referring to them in his or her mail signature - and declares them applicable to the agreement (see also our blog on declaring general terms and conditions applicable and possibly our blog on providing general terms and conditions). Usually the provisions therein are not to the advantage of the purchaser. For example, they will often contain unilateral price change clauses, arrangements that entail great flexibility for the seller in terms of quality and delivery and, in the worst case, only a so-called "best efforts obligation" rather than a result obligation. That is, the seller will do its best to fulfill its obligations, but no more than that. If it fails, then you as the buyer have a problem, not the seller. Therefore, as a buyer, write your purchase order in such a way that delivery must take place in accordance with your purchase conditions. This will save you a lot of hassle if an incorrect delivery is made afterwards. You will be ahead 1-0, so to speak, instead of having to catch up.
Logistics
In addition, we would like to urge you to pay special attention to the logistics of your procurement deliveries. In recent years there have been major and minor disruptions in almost all transport and supply lines, at all levels within the chain. This obviously affects timely delivery of your procured goods and therefore their delivery. If you as an organization then also market your goods through various channels or omnichannel, each with a different procurement and sales channel, you are in a vulnerable position. You can correct the playing field in your favor by making good agreements and sharing risks. For example, agree with the seller that goods will be delivered Delivery Duty Paid (DDP) in accordance with Incoterms 2020 (which means delivery to your door at the seller's expense), and any delays will be at the seller's expense and risk. Towards your buyers, if they are companies, it is better to agree that your goods are delivered Ex Works (EXW) in accordance with Incoterms 2020, which means delivery ex your warehouse, after which everything is at the buyer's expense and risk. With a best-efforts obligation for timely delivery, but without any guarantee for that. If your buyers are consumers, things are a bit more nuanced, but you can still work with variable delivery terms, within a reasonable margin.
The collaboration
If you decide to engage in joint purchasing with other organizations: properly document the arrangements in a cooperation agreement. Establish clearly in it how the mutual responsibilities are divided and how discounts are settled and allocated. Naturally, we can be of service in this regard.
Of course, there are hundreds and hundreds of other topics that need attention within such a collaboration, but they are beyond the scope of this blog. Food for another blog....
