Purchasing groups have helped independent businesses compete with much larger organisations for generations. Speaking at the LBMX Accelerate Executive Summit 2026 in Banff, Canada, Moorgate Management Founder Chris Maityard explored what makes the model work, where these groups can go wrong and what the strongest co-ops are doing differently.
Purchasing groups and co-operatives are a major part of the global economy. From the Rochdale Farmers beginnings, there are more than 2.5 million co-operatives worldwide, employing over 10% of the world’s employed population (source principle 6), while the US alone has more than 30,000 co-operatives generating more than $700 billion in annual revenue (source USDA).
Those figures give some sense of the scale of the model. At its simplest, a purchasing group helps independent businesses combine their buying power, build stronger supplier relationships and gain access to services or expertise that might otherwise be difficult to secure on their own. But a successful group cannot rely on buying power alone.
During his session, The Fundamentals of Successful Purchasing Groups, Chris Maityard looked at the opportunities available to co-ops and the problems that can build when they lose focus. Using examples of purchasing group failures from hardware retail, grocery distribution and agricultural supplies, he made the point that problems rarely arrive overnight. More often, they develop slowly through a combination of poor decisions, weak controls and a gradual move away from the group’s original purpose and the seven cooperative principles.
Clarity matters
One of the strongest themes running through Chris’ presentation was the need for clarity. A purchasing group needs to have a clear idea of where it is going and what it exists to achieve. That means having a strategic roadmap, making sure the board and management team are aligned, and being disciplined enough to judge new opportunities against the group’s wider goals.
Growth and diversification can be positive, but they can also create problems of their own. A new service, partnership or venture may look attractive in principle, but still pull the organisation away from what members actually need. Successful groups are the ones that are better at asking whether an opportunity fits the bigger picture before committing significant time and money to it.
Chris highlighted the value of purchasing groups having clear roles and responsibilities, skills matrices, training needs analysis and defined levels of authority. In a member-owned organisation, where there is always pressure to deliver value while keeping costs under control, people need to know what they are responsible for and what good performance looks like.
Governance is a key part of that picture. A good board should provide constructive challenge and independent oversight without becoming disconnected from the management team. Board members need to understand their responsibilities and the group’s bylaws and have the knowledge to make informed decisions as the organisation and the market it serves changes.
Keep watch on the numbers
Financial management was another major focus of Chris’s presentation. One of the dangers for any growing organisation is assuming that rising revenue automatically means the business is getting stronger – but this is not the case.
Purchasing groups need a clear view of profitability, cash flow and the cost of delivering services to different member segments. That helps the management team understand which parts of the organisation are adding value and which are quietly absorbing time and money.
Cash flow is especially significant for groups that operate a central billing model. Chris highlighted the value of a rolling 13-week cashflow forecast as a practical management tool. Rather than looking backwards at what has already happened, it gives the business a short-term view of what is likely to happen next and gives management time to act if a problem starts to emerge.
Credit management and rebates need the same attention. New members, personal guarantees, credit insurance, late payment, vendor deductions and year-end incentives can all add layers of complexity if they are not managed properly.
Risk management should not be treated as an annual box-ticking exercise. The strongest organisations make it part of normal, day-to-day management, keeping their risk registers current and reviewing potential issues regularly rather than waiting until something has gone wrong.
Technology should make life easier
Operational complexity is one of the less glamorous challenges of running a growing purchasing group, but it can quickly become a serious one.
Member onboarding, vendor management, rebate administration, reporting, compliance and communication all take time. As a group expands, those processes can become harder to manage without the right systems behind them.
Chris encouraged groups to look at technology from every angle: what it can do for the group itself, for its members, for vendors, and for the people working inside the organisation.
Data sits right at the centre of that. Good decisions depend on good information, but accurate purchasing data relies on the group’s members being willing to share it. That means trust matters just as much as technology. Once the data is there, groups can use it to understand member behaviour, identify opportunities and improve the way they work.
AI is starting to enter the same conversation. For purchasing groups, there is an obvious opportunity to use AI to make their own operations more efficient. There is a second opportunity too: helping members understand and access technology they may not have the budget, time or expertise to explore independently.
That fits with a wider shift in the role of the modern purchasing group.
Good buying terms and rebates still matter but, increasingly, they are only part of the reason a business joins and stays in a purchasing group. Members are looking for help with technology, skills, succession, operational performance and the wider pressures involved in running an independent business.
Keeping members in the group
Retaining members matters for every purchasing group because the strength of the model depends on keeping purchasing volume together. In his presentation, Chris argued that this starts with engagement.
Member business plans can help both sides understand how the business intends to use group deals, where it wants to grow and what support it needs. Reviewing those plans regularly gives the relationship between group and member more substance than simply contacting them when there is a new deal or rebate to discuss.
There is also a community element. Members need to feel that they are part of something, alongside vendor partners, solution providers and other organisations connected to the group.
Succession is becoming another major issue. When an owner decides to retire or sell, the co-op faces a very real risk that the business could be bought by someone outside the group. If that happens, the member may leave – taking its purchasing volume with it. The hard part is often getting the owner to speak to the co-op early enough for it to help.
Chris pointed to trust, education, exit-planning support and case studies as ways to encourage those conversations. Once a member does say that it is looking to sell, the group can look at options such as matching the business with another member, purchasing and holding it, or bringing in third-party funding. That turns succession from something affecting one member into a wider issue for the whole organisation.
Thinking beyond the traditional model
Chris’s presentation was not only about avoiding problems; it also looked at where purchasing groups might go next.
There may be opportunities to work more closely with other co-ops, share expertise, centralise purchasing, collaborate on warehousing and distribution or look at shared back-office and funding models.
Groups can also create value simply by being good connectors. They are in a strong position to bring members together with suppliers, technology providers, investors, universities and specialist advisers. Supplier relationships can become much broader than negotiating a deal or calculating a rebate, with vendors contributing training, market knowledge and expertise that supports members in other ways. The challenge, again, is knowing which opportunities are worth pursuing.
Chris suggested that periodic health checks can help groups stand back from the day-to-day operation and look at areas such as member retention, strategic alignment, competitive positioning, governance, financial wellbeing, vendor compliance and operational efficiency.
That perhaps sums up the overall message from Chris’ session. The purchasing group model is not struggling for relevance. Independent businesses still benefit enormously from working together, sharing knowledge and combining their buying power. What is changing is the standard members expect from the groups they choose to work with.
The groups that perform best will be the ones that understand their finances, stay close to their members, use technology sensibly, plan for succession and remain open to new ideas without being distracted by every opportunity that comes along. Good purchasing still matters, but the strongest co-ops are becoming much more than purchasing groups. They are advisors who are increasingly becoming integral to their members’ success.
For more information on how Moorgate Management can help co-ops and purchasing groups to better align with the needs of their members and a changing industry, visit www.moorgatemanagement.com or contact Chris Maityard at cmaityard@moorgatemanagement.com.