Buying Group FAQ
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.
Why are buying groups needed?
Buying groups level the playing field for smaller independents competing against larger regional and national / multi-nationals.
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.
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.
Frequently Asked Questions
Fullarton is a member driven buying group. We believe in involving and listening to our Members. Members choose which suppliers are the best for them and the Group. Members don’t shy away from making the decisions that make them successful. Fullarton is the vehicle that helps them do what can only be achieved by working together.
Will I be required to convert all my purchases from my current suppliers to all Fullarton 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. One of the major benefits of any buying group is the selection of the Supplier Partners that provide the best overall value proposition for each product category. In many cases, the Fullarton Supplier Partner will be the Supplier you currently deal with for that product category. You will simply enjoy better net costs and off-invoice advantages than you previously did before joining the Buying Group.
In other cases, an Fullarton Supplier Partner will not be the Supplier that you currently purchase a certain product category from and, in most cases, the Fullarton Supplier Partner in that product category will contact you to review their program with Fullarton, their value offering and then will assist you in a possible transition to their Fullarton Program. Experience has shown that a buying group that can show Members have loyally supported their Supplier Partners, will be well rewarded.
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, Fullarton 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.
Why does Fullarton 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. 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!
Will Members have any input as to which suppliers are chosen to be Fullarton Suppliers?
For each major product category, a committee of your fellow members will be chosen to participate at the Supplier Selection Meetings. Suppliers are approached by Fullarton 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. During the formation of Fullarton, the BGS Team leveraged their existing relationships with the suppliers of another North American buying group, to bring exceptional programs immediately to the Fullarton Members.
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!”
What are the criteria for a Membership?
A Fullarton Membership is for distributors of promotional products in Canada. Membership is by invitation only, with the over-riding criteria that the distributor 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.
How much does a membership cost?
Each Member will be expected to pay a one-time Set-up Fee of $197.00, and a Monthly Membership Fee of $165.00. 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, Fullarton is not a fit for your business, you may leave at any time.
Supplier Partner FAQ
How are earned rebates returned to Fullarton Members?
Rebates are returned to each Member as they have been earned proportionally with all other Members. Specific Supplier Rebate “pools” are divided proportionately based on each Members spend with that Supplier.
Fullarton Group’s unique central billing and payment model allows line-item tracking and a complete audit trail to ensure each Member receives their portion of any earned rebates.
Fullarton Group guarantees Member payments to Suppliers – what happens in the case of a default?
Each Fullarton Member is required to meet normal credit criteria with the Buying Group. A third-party Accounts Receivable insurance is used to greatly reduce the impact of any default. In the rare occasions where a Member default does occur, Fullarton will trigger the AR insurance and the Supplier will be paid within 15 days of the receipts of the insured funds. This system ensures that no matter the business environment that our Supplier Parners receive 100% of the funds owed to them.
What is the process to become a Fullarton Supplier Partner?
Suppliers may express their interest to become an Fullarton Supplier Partner by completing a Supplier Inquiry. 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.
Fullarton 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.
Are Fullarton Members required to support and switch to an approved Fullarton Supplier Partner?
The short answer would be no. Each Fullarton Member is an independent manufacturer and can support the approved 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 Fullarton also serve as very strong advocates for your products and services.
Members are encouraged to support Fullarton Supplier Partners for the overall benefit of the Buying Group, remembering rebate programs are designed to incent Members to switch to Fullarton Supplier Partners.
How confidential are the rebate programs negotiated with the Supplier Partners and Fullarton?
Confidentiality of information is important in any business, but even more so in a buying group made up of independent businesses as members. All involved, the Member, the Supplier, and the buying group must commit and ensure 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-Fullarton Group suppliers. Many advantages gained through group negotiations have been lost because the deal has become known to the trade.