Member Purchasing Process
Each Member, when accepted into N1 Buying Group, is assigned a unique member number. Distributors and operators continue to place orders with their Suppliers in the same manner they have always ordered. This may include phone, fax, the Supplier’s website or, EDI purchase orders. The N1 office advises Group Suppliers of the Member’s unique N1 Buying Group Member Number for the Member’s ordering location (this will be included in every Supplier document) and when Members place their first order with an N1 Supplier, they simply confirm the Supplier has correctly registered their Member Number and continue normally.
Each N1 Member is set up with their own secure cloud-based Document Center portal that allows for secure access to all documents from the N1 Buying Group. Documents including any invoices, credit notes, statements of outstanding invoices and remittance advices listing the invoices paid by completed electronic bank transfers. This EDI platform is a patented software platform from the world’s leading buying group billing technology partner, LBMX Inc., and is the number one central billing platform used by buying groups worldwide.
Members still negotiate their own prices with every N1 Supplier Partner. Rebates earned by the Group are in addition to any discounts the Member negotiates on its own with each supplier. The profit of the buying group (rebates minus operating expenses) are then paid out to N1 Members proportionally as to how they were earned on purchases. If an N1 Member’s purchases represented 5% of the rebates earned, that Member would receive 5% of the rebates paid out to all participating Members.
Our unique negotiation process is based on our firmly held belief that N1 Members, being well established independent distributors, know how to choose the “best” suppliers for their businesses.
Suppliers are recruited and asked to present a program to N1 Members during one of N1 Supplier Selection Meetings. Members then discuss and vote on which suppliers they will allow into the group.
Supplier Program Negotiations
Every N1 Supplier Partner establishes a set of standard payment terms and a rebate program that they will offer to all Members on their purchases. These terms are exclusive to Members of the N1 Group and the details of these programs are never shared outside of the Group.
Our Suppliers are True Partners
We see our Suppliers as true partners and work equally hard to ensure our Suppliers' expectations are also exceeded. We work together to encourage purchase behaviour through to the Group's Supplier Partners and to build purchase loyalty.
Video: Do existing suppliers support joining N1?
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 and help promote our suppliers message as a group rather than 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 a exclusive, respectful and inclusive environment.
- 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.
- 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.
N1 Buying Group is a limited liability partnership buying group operated by Buying Group Services Inc. N1 has a dedicated General Manager, a governing board of directors as well as a support staff that are all employed to ensure the buying group meets its objectives.
The back-end, administration, direction, and recruitment of the N1 Buying Group is managed by Buying Group Services Inc.
Buying Group Services America Inc. and their Canadian sister company Buying Group Services Inc are a team of industry leaders who are passionate about providing independent business owners from around the world the ability to be more competitive and prosperous by using the buying group model.
In this ever-changing world of corporate consolidation and the loss of the personal touch to business, Buying Group Services Inc. has developed an sustainable business model that allows independent businesses within an industry to work together and compete effectively with much larger "corporate competitors" without compromising their independence.
You can learn more about BGS by visiting their website www.buyinggroupservices.com
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 Preferred Suppliers that provide the best overall value proposition for each product category. In many cases, the Preferred Supplier 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, a N1 Supplier Partner will not be the Supplier that you currently purchase a certain product category from. In most cases, N1 Supplier Partners will contact you to review their program with N1 and will assist you in a possible transition to their N1 Program by providing product training and price negotiations. Experience has shown that a buying group that can show Members have loyally supported their Preferred Suppliers, will be rewarded handsomely.
All “non-confidential” details of the supply programs negotiated with N1 Supplier Partners will be available exclusively for Member’s only. These details will include supply program contract dates, standard payment terms, freight allowance policy, currency, and all of the Supplier’s contact information. You will not have documented access to details of the confidential rebate programs, allowances or special deals for N1 Members. Only the Negotiating Committee and Buying Group Services Inc. will know the full terms of the rebate programs. Strict enforcement of N1 Supplier Partner confidentiality enables N1 Suppliers to offer better overall pricing only to N1 Members without the risk of competitors or other of the supplier’s non-buying group customers knowing and saying “me too!”
For each major product category, a small number of your fellow Members will be chosen to participate on the Supplier Selection Committee. The Supplier Partners are then vetted and voted on, and are based on a wide set of criteria which includes factors from pricing, rebate program, payment terms, return policies, service levels and the brand acceptance.
Members will receive rebates on their purchases put through N1 to N1 Supplier Partners. N1 pays out rebates, periodically throughout the year, in the form of a check. As N1 grows in Membership size and the Members continue to increase their purchasing volumes with N1 Supplier Partners, the rebate checks will continue to grow year after year.
Rebates are a powerful tool for both the Supplier Partners and the Members. Suppliers like rebates for two main reasons;
- firstly, they protect the “street price” of their products
- secondly, 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, at the end of the year the rebate check comes in and goes straight to the bottom line!
Each distributor or multi-site operator is required to pay a $1,500 Setup Fee and a $3,500 Annual Membership Fee.
The Annual Membership Fees are designed to ensure Member participation and engagement at N1 Events. These funds are used to help cover Member airfare, accommodations and meals to attend the annual Members’ meeting.
N1 Membership is for car wash distributors and multi-site operators. Membership is by invitation only, with the overriding criteria of distributors and operators doing business ethically and respectfully. The ideal Member fit is distributors that will be able to meet a $300,000 annual purchasing threshold, or more, through N1 Supplier Partners, and multi-site operators operating 4 or more wash locations and currently purchasing direct from their suppliers.
Submit an inquiry to become an N1 Member here
A mandatory Administration Fee of 1.75% of the N1 Supplier’s sales is collected monthly. This Admin Fee is in recognition of the efficiencies of electronic central billing, reduced credit risk and the lower administrative costs of dealing with the N1 Buying Group centrally, versus with each individual Member.
Rebates are the distribution of profits of the group as declared by the Board of Directors. Rebates are returned to each Member proportionally as they have been earned. For example, if Member A purchased 5% of the total Group purchases they would receive the same 5% of the earned rebates for each program. N1'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.
Each N1 member is required to meet rigorous credit criteria. In addition, a third-party Accounts Receivable Insurance is used to greatly reduce the impact of any default. In the rare occasions where a member defaults on payment, N1’s AR insurance will pay the supplier payment within 90 days. Account Receivable Insurance is a proven risk reducing strategy that works well with buying groups.
Confidentiality of information is important in any business, but it is even more so in a buying group made up of independent businesses. All involved, the Member, the Supplier and the Group must commit and ensure all the detailed confidential aspects of the Rebates Programs negotiated with the Preferred Suppliers 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-preferred suppliers. Many advantages gained through group negotiations have been lost because the deal has become known to the trade.
The Members participating on the Preferred Supplier Selection Committee have also committed to keeping the information that they are exposed to confidential as a pre-condition of serving on the Committee. Suppliers should also institute similar measures for their staff.
The short answer would be no! Each N1 Member is an independent and can support the approved N1 Supplier Partner when it makes sense for their business.
However, experience has proven that when Member Committees endorse a new Supplier, Members take the time to very seriously consider the offering from the Supplier. Peer endorsement of a Supplier is powerful. Current customers within N1 also serve as very strong advocates for Supplier's products and services.
N1 insists that each Supplier Partner gets a real opportunity to present their offering to each Member by on-site visits, phone call or at N1 Buying Group events like our AGM, and regional meetings. Members are encouraged to support N1 Supplier Partners for the benefit of all.
N1 believes that buyers and sellers know what the locally competitive pricing needs to be. Therefore, the supplier shall determine locally competitive invoice pricing for each member at its discretion. The prices to be paid by each member for the products the member purchases from the supplier shall be negotiated and agreed upon directly between the supplier and each member. Rebates need to apply to all purchases and must be seen as above and beyond any locally negotiated price.
N1 staff will work with both the supplier and the member to try to ensure that they arrive a locally competitive price. If after consultation with the supplier, their prices remain locally uncompetitive, N1 will encourage the member to look elsewhere for proper supplier support.
The N1 Buying Group does not share invoice pricing amongst members, and while individual members may do so, the Group does not use its data to facilitate any such comparisons.
For each major product category, a small number of N1 Members will be chosen to participate on the Supplier Selection Committee. Suppliers are invited to attend and present their program to the Members who then vet and vote on which suppliers they will partner with. The program criteria are based on a wide set of factors from pricing, rebate program offering, payment terms, return policies, service levels and the brand acceptance.
Submit an inquiry to become an N1 Supplier Partner here