Which procurement method allows buyers to consolidate their purchasing power?

Group or cooperative purchasing is a procurement method that enables buyers to combine their purchasing power, which can lead to reduced costs and improved negotiation leverage with suppliers. In this approach, multiple organizations or entities come together to make bulk purchases, benefiting from economies of scale. Because these buyers are pooling their orders, they can often secure more favorable pricing and terms than if they were to procure items individually.

This method is particularly advantageous for smaller organizations that may not have the same purchasing volume to negotiate discounts or better terms. By working collaboratively, members of a group purchasing organization can access a wider range of products and potentially enjoy additional value-added services provided by suppliers.

The other options, while they have their own merits, do not primarily focus on consolidating purchasing power in the same way as group purchasing. Centralized purchasing typically refers to a single organization managing all procurement activities for multiple departments or locations, which does not necessarily involve collaboration with other entities. Informal, open market purchasing usually involves less structured buying practices and may not yield the same benefits of consolidated purchasing. Prime vending involves establishing a primary supplier for a range of products but does not directly imply the same level of cooperative purchasing power as group purchasing does.