The Procurement Glossary » Consortium Purchasing

Consortium Purchasing

Sourcing & RFx

Definition

Buying jointly with other organisations to aggregate volume and secure better pricing and terms than any member could alone.

Explanation

Also called group purchasing, it pools demand across independent buyers — often via a group purchasing organisation (GPO). Members gain leverage and lower prices; the trade-off is less bespoke terms and shared governance.

Example

Five hospitals form a consortium to buy PPE together, unlocking manufacturer-direct pricing.

Related terms

• Group Purchasing Organization (GPO) — An entity that aggregates the purchasing volume of many members to negotiate discounts with suppliers on their behalf.
• Leverage — The relative bargaining power a buyer or supplier holds in a negotiation, driven by factors like volume, alternatives and switching cost.
• Supplier Consolidation — Reducing the number of suppliers in a category by concentrating spend with fewer, better-managed vendors.
• Spend Under Management (SUM) — The proportion of addressable spend that is actively managed by procurement through contracts, sourcing and controls.

Frequently Asked Questions

What is Consortium Purchasing?

Buying jointly with other organisations to aggregate volume and secure better pricing and terms than any member could alone. Also called group purchasing, it pools demand across independent buyers — often via a group purchasing organisation (GPO). Members gain leverage and lower prices; the trade-off is less bespoke terms and shared governance.

Can you give an example of Consortium Purchasing?

Five hospitals form a consortium to buy PPE together, unlocking manufacturer-direct pricing.

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