Ask the Expert: Leveraging Buying Power
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Fiscally responsible board members are always on the lookout to balance value versus cost.
Learn about how your community can take advantage of buying power to lower rates on common services. Watch the video to get helpful tips from our industry expert Christian Mora, National Director of Procurement, FirstService Residential on:
- Vendor Relationships
- Leveraging Your Buying Power
Get answers for all your buying power questions:
How does an association leverage its size to get better terms, prices and services from vendors?The answer is two-fold. An association can leverage its size by deciding to purchase services and negotiate prices as a group. Common examples of this include landscaping, pest control, cable and internet, and secutiry alarm/monitoring services. The property mangement company can leverage its size by securing relationships with qualified vendors over the scope of its entire portfolio to get better service and reduced prices. Since vendors are already in a competive market, they will often offer better deals to companies with larger portfolios of clients. This is one reason why larger managment companies can provide better leverage in buying power to their clientele. A good management company will also have a verified vetting process for vendors and audit these relationships on an annual basis to ensure the broadest selection of potential providers is avialable to their associations.
How does national buying power help homeowner and condominium owner associations in Texas?There is power in numbers. A national management company like FirstService Residential, can utitlize its client base to leverage preferred partnerships with other national vendors. A good property management company will encourage vendors to compete with one another on terms, services and pricing. Those savings can then be passed along to any properties that company manages. Good examples of this kind of buying power lie in commoditized goods like MRO, janitorial, or office supplies. They may also have prefered realtionships with service providers like banking and insurance, landscaping, elevator maintenance, or cable/internet. Your managment company should review your annual budget line items to identify possible opportunities to apply your association's buying power more effectively.
Management companies help associations avoid risk by having processes in place to verify that vendors are qualified to perform the scope of work and that they are fully licensed and insured. As insurance markets harden and insurance becomes more costly to vendors, it is critical that association boards only do business with providers that will not burden with a loss in the case where an accident occurs. Avoiding the potential high cost of improperly insured vendors and unforeseen associated costs can help associations keep a sound financial position for years to come.
How can buying power help mitigate risk and help homeonwer and condiminium owner associations avoid unforeseen costs?
FirstService Residential's Ask the Expert webinar miniseries aims to answer your most frequently asked questions on a variety of key topics. For more information about how FirstService Residential can help your association leverage buying power, fill out the form to contact us.