Finding valuable cost savings through your co-op

BuyPoint has helped Land O'Lakes, Inc. members save over $3 million on their business purchases

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For the past year and a half, Central Valley Ag Cooperative (CVA) has harnessed the collective buying power of the BuyPoint purchasing program to boost its bottom line.

Besides being the BuyPoint coordinator for the co-op, based in York, Nebraska, Brad Loseke is always on the lookout for “out of the box” ways to save the company money. He is delighted with the benefits and savings that CVA -- which provides agronomy, energy, feed and grain products and services at locations in Nebraska, Iowa, and Kansas -- reaps by using BuyPoint.

“In today’s world, we’re always looking to be more efficient and always looking for cost savings,” he says. “This is another tool to help provide that.”

Since Land O’Lakes, Inc. launched BuyPoint in 2014, nearly 400 member-owners -- both producers and retailers -- have saved an estimated $3 million on a variety of products and services such as tires, hardware, skid loaders and office supplies.

Tyler Polacek, BuyPoint senior manager, says a key benefit of the cooperative system is its size and scale. BuyPoint leverages the collective purchasing power of Land O’Lakes, Inc. and its member-owners to negotiate better prices for the entire cooperative network.

“We are able to harness our buying power to help get better pricing and better terms—whether that’s on payment or shipping,” Polacek says. “There’s obviously savings from that, and delivering those savings back to our member-owners is the core of what the program is about.”

Loseke says BuyPoint has helped streamline spending at CVA.

“It’s given us a chance to go to a smaller group of vendors rather than everyone just going to who they want to and paying retail price,” he says. “With Land O’Lakes, they negotiate the contracts, they get the best pricing that’s possible for them, so we’re able to capture those savings for us being part of that cooperative.”

BuyPoint product categories offer a broad range of items and services from more than 25 different suppliers, including:

  • Fleet Products: trucks -- all sizes, trailers, feed transport equipment, cars, tires.

  • Maintenance, Repair, and Operations (MRO): parts and supplies including safety, janitorial, sanitation, electrical, mechanical, fasteners, abrasives, and adhesives.

  • Information Technology: equipment, solutions, and services.

  • Office Products and Supplies: paper, toner and office equipment.

  • Payloaders: loaders and other construction equipment.

  • Promotional Products: branded for your business including hats, jackets, shirts and a large variety of merchandise.

Polacek says savings through BuyPoint range anywhere from 3 to 40 percent. The savings can be significant especially if you need to buy a loader from Caterpillar or buy tires for a fleet of trucks.

“That’s a pretty big range because 3 percent is going to be on your big purchases, like some of your machinery and construction equipment,” he says. “Forty percent you might find on wrenches, nuts, and bolts.”

Tires are a popular purchase through BuyPoint, especially from Michelin where member-owners are saving on a variety of tires for many different applications. Information technology items such as laptops, monitors, ink and toners are also in demand.

Of all the BuyPoint vendors, Loseke says CVA probably uses Michelin the most.

“We’ve got a lot of passenger cars, light trucks and commercial trucks,” he says. “You can imagine how many tires we put on in a year. For example, if you’re saving 20 percent on a Michelin tire, it adds up at the end of the year. And you’re getting that premium grade of tire, in my opinion, under the Michelin name.”

Savings and convenience

Two dairy members who regularly use BuyPoint also tout its savings and convenience. They -- along with Loseke -- highly recommend it.

Dave Ribeiro of Rib-Arrow Dairy in Tulare, California, likes being able to purchase items online or in person. Several BuyPoint suppliers such as Fastenal and Applied Industrial have stores near his farm.

Because many suppliers have store locations in member communities, BuyPoint purchases can happen through participating suppliers’ local representatives or store locations. That way member-owners can still take advantage of the discounts even if they prefer to support their local businesses.

“I understand the convenience of going online and getting things shipped, but when you’re in the midst of the season, and an employee can go over and grab a part, it’s sure beneficial,” says Ribeiro, whose farm has 1,500 cows and 800 acres. “Some people may hesitate because they think it’s a completely online type of situation. It can be, but when you have the physical stores, too, it’s an added benefit.”

Russel Strutz, owner and president of Strutz Farms in Two Rivers, Wisconsin, says BuyPoint eliminates trips to town for just one item with a few clicks of the mouse.

“If I’m going to travel 30 minutes to a store, I want to make sure I have multiple stops versus one stop,” says Strutz, whose farm has 1,200 cows and 1,800 acres. “And you can sometimes order something at 5 p.m. today, and you will see it in your yard less than 24 hours later.”

Getting started

Polacek says the more users come aboard BuyPoint, the better the savings.

“And it means we have more leverage every couple years when we go back to renegotiate contracts with our suppliers,” he says.

Besides producers and co-op members, the program is also now open to Land O’Lakes’ new Class I independent retailer-members who joined the cooperative as part of the merger with United Suppliers. To begin the registration process, email and request an “Onboarding Checklist”.

Polacek says the sign-up form is a simple registration process. There is no cost, contract or minimum purchases required. “The pricing and the savings are real at day 1 and dollar zero,” Polacek says.

After completing registration, users visit the BuyPoint website to browse the online product catalog, place an order or request a product quote. Strutz advises people to allow themselves a little time to become familiar with ordering through the BuyPoint website.

“Sometimes you have to test the waters first,” he says. “My advice would be to get set up and start using one company, then go from there.”

If you’re unsure of the savings, Strutz recommends a side-by-side price comparison of the BuyPoint price with what the item costs on the supplier’s website.

You'll see the savings right there,” he says.

If you have questions or need help getting set up, members may contact their local field staff representative, email or call 855-595-1363.