Is AIM a Buying Group?
Do you know how to differentiate between a buying group and a distributor organization? Learn all you need to know about these entity types and see how they relate to intangible assets.
Through its evolution as an entity, AIM Smarter has developed into an enterprise business by carefully adhering to various market needs throughout its history. This has allowed the organization to create service-specific resources for distributors that help meet the demand of a rapidly changing market. This is done by adhering to a unique value-add proposition specific to AIM’s members.
For many years, AIM was identified by its place in the industry as a buying group. Today, AIM is anything but.
What is a Buying Group?
A buying group is an organization made up of small businesses that band together so they can negotiate as a larger group with vendors to receive better pricing and terms on goods and services. The fundamentals of a buying group include a reduction of the cost of goods, opportunities for financial savings, and a collective support structure imposed by the group itself. But this is where a buying group has its limitation. Traditionally, it’s a specific selection of services that benefit only a limited number of those involved. As a buying group expands and the market changes, the needs of those in the group exceed what the group is able to offer.
At a point, a buying group becomes too big and the needs of those involved become too great to create value. This can create supplier drawbacks that impact a member’s financial assets. The group influence also intensifies the loss decision frame whereas the opinions of those in the group deviate from market need. An improperly scaled buying group also creates a hindrance to competitive growth seen by the collective members. As time passes, the buying group is simply not a viable option.
What is a Distributor Organization?
A distributor organization combines a wide variety of interests together to create more value through its distributor network. Some key elements of the distributor organization include a core goal of associate financial success, opportunities to provide scalability and growth throughout its services, and a wide array of intangible assets designed to improve sustainable value. Organizations create sustainable value in distributor organizations by leveraging access to human capital, database and information systems, operational processes, customer and community relationships, and innovative capabilities.
An intangible asset, or one that lacks physical substance, is one of the most overlooked and yet critically important areas of business valuation. These assets matter as a means of developing business strategy. Any business as part of a collective organization, such as those involved with a distributor organization, must explicitly address strategy formulation as part of properly leveraging the intangible assets provided to them. This means that gone are the days of limiting intangible asset selection as part of being with a distributor organization. Too often AIM members take advantage of very few deliverable resources. This not only impacts their cost-benefit analysis but also limits the AIM member’s value of their available intangible assets.
Some common intangible assets which valuable companies focus on include brand recognition, marketability, and intellectual property. The AIM team uses each of these areas to guide their distributor services. In doing so, they ensure that a distributor member is able to improve their company’s value through the most important areas of intangible assets. As a means of valuation, businesses find that harnessing these areas of intangible assets creates a better indication of the company’s performance in the market, furthers tangible assets, and provides an overall more favorable company assessment.
At AIM, your success is the only achievable that matters. Our goal is to decrease limitations in our offerings by providing focused and targeted resources unique to each distributor member. In that, we are able to respond to individual challenges and specific market considerations. So, is AIM a buying group? No. It is far more.
by Seth Barnett, VP Content Development