How to centralize purchasing across multiple locations

“More than half of procurement decision-makers (52%) are responsible for making purchases for multiple locations,” according to the 2024 State of Procurement Report. This statistic applies to both a franchise and an organization with multiple locations, stores, and offices. Each location operates somewhat independently, managing its own suppliers and inventory based on local preferences and demands.

Challenges of multiple locations

Although this decentralized setup allows for flexibility to cater to local needs, managing multiple locations can be difficult. It leads to challenges such as: inconsistent processes, higher unit costs, and impact on policy compliance.

Centralizing purchasing

How can parent companies provide the flexibility and guardrails for managing multiple locations? Centralizing purchasing brings together all purchasing activities under one unified procurement strategy, simplifies the buying experience, reduces business costs, and improves visibility into spend. This comprehensive view allows the parent company to turn data into actionable insights, spot inefficiencies like duplicate spending, and find new ways to save across all locations. It also empowers individualized or group decision-making, keeping their autonomy as a franchise location.

A centralized purchasing model caters to all sizes of businesses or organizations. As a start to experience benefits, organizations can create an Amazon Business account. With an Amazon Business account, the parent company can consolidate personal logins or individual Amazon accounts into one ‘lead or parent’ business account. The Associated Accounts program allows related organizations to join a unified program and access special benefits while maintaining autonomy. This lets the ‘child’ or ‘associated’ account be more connected to their ‘lead or parent’ company, association, or group purchasing organization looking to extend their purchasing power and maximize their benefits while still working directly with Amazon Business.

Leveraging the Amazon Business Associated Accounts Program

School of Rock is the global leader in performance-based music education, offering traditional individual lessons with live rock show performances. Founded in 1998, to date, there are 382 School of Rock locations in 16 countries. School of Rock was looking for opportunities to increase operational efficiency, tighten up multi-unit management and purchasing oversight, and reduce expenses—especially for its franchise owners. After hearing about the benefits of centralizing purchasing, School of Rock launched the Associated Accounts Program (AAP). Jim Love, Vice President of Operations, mentioned, “The move to a more official centralized buying approach has been impactful for our Regional managers and I to have more supervision of and clarity into purchasing. Owners, particularly our multi-unit owners who give purchasing power and autonomy to managers, have felt the same.”

Overcoming change management

Adopting programs like AAP can be challenging with multiple locations due to system-wide change management. Therefore, it’s crucial for branches or franchises to understand the long-term value and benefits they will receive, which can be achieved through clear communication from the parent company. Additionally, data plays a key role in demonstrating the benefits.

In collaboration with Amazon Business, many organizations support multi-location purchasing across various industries. Barb Lowman, President of CUNA Strategic Services, who has helped multiple credit unions and their members emphasized “Start by leveraging data to identify areas of opportunity, then openly collaborate to take action and shift from ideation to execution.” Patrick, Managing Director of OMNIA Partners, a global purchasing organization that provides value-driven procurement and cost-saving solutions to public and private sector industries, also highlighted the importance of data and visibility, noting the impact of “having a roadmap of where they go.”

Conclusion

Centralizing purchasing is a strategic approach for multiple locations, as each site will experience a simplified buying process and additional cost savings, while still feeling empowered to make their own purchases. Strong collaboration, data, and visibility can make the adoption process more manageable.