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Price Relief for the Independent Broadcaster

Not Part of a Radio Group? That Doesn't Mean You Can't Organize Your Buying

Not Part of a Radio Group? That Doesn’t Mean You Can’t Organize Your Buying

Last fall I wrote an opinion here about how small to large groups could stretch their capital spending dollars (Oct. 20, “Manage the Process, Not the Purchase”). But what about independent broadcasters, the single-station owners? They cannot partake in the advantages of economies of scale. Yet in many cases, they’re the ones who need it most.

They, too, can take advantage of quantity purchases – through co-ops.

Co-op buying has worked for many groups. One that springs to mind is the grain co-op, in which farmers band together for better purchase prices on seeds. (They also band together for better prices on sales, as well).

How can this concept work for independent broadcasters?

Get together

Several station owners can organize a buying co-op. After they determine their capital spending, one member is assigned to organize the group’s purchases, as I have discussed in previous articles. When the co-op knows what items and how many items members need, it appoints someone to negotiate with vendors.

The co-op vehicle probably is not going to be effective for buying smaller studio items. But it can work for most RF purchases.

Transmitters certainly would be a natural for this kind of purchasing. Standard antennas would be easy. Transmission line would be a little harder to organize, but could be purchased this way if the person administering the system was knowledgeable.

There is a vehicle in place in most states around which to organize this purchasing: the state broadcast association.

Stations already are working together through state organizations that monitor events affecting members. Why not help them get better value for their capital dollars?

Most such groups have one or more engineering board members. He or she could be in charge of the co-op program. An engineer would have the technical knowledge to talk to the vendors and, in most cases, the manufacturers.

Big picture

The person in charge of organizing the co-op plan would obtain a list from station members detailing the purchases of, say, transmitters in the coming year. Included in the list could be related RF equipment -dummy loads, transmission line (rigid and flex) and antennas.

The organizer would determine the preference of the station for brands. Some stations will want specific transmitters; some will not care about brand as long as it is a reliable device.

This may be a strong negotiating block. Let’s say you have 10 members who want Transmitter Brand A and six who want Transmitter Brand B; you also have five who don’t have a brand preference but just want the lowest price. You can use the swing purchasers to negotiate a better price for all the buyers.

Some have asked me why a state association would want to do this. What’s in it for them?

The members of state associations whom I’ve met seem truly concerned about the financial health of their stations. That is why they exist. A purchasing co-op would be an additional service that groups could offer members to save money, always a good thing. Lower costs for capital items certainly would be a benefit.

The co-op also could provide a new resource: someone with whom to discuss purchasing – an informed opinion. And it might even increase membership, after non-member stations realize the added value in joining.

Fee system

If the association felt that it could not enter into this kind of service without a fee to offset administrative costs, it could charge a percentage of the money saved through the buying plan. The member would still reap a savings.

The organization could contract out the service to an independent purchaser. There are people qualified to set up a purchasing program for a fee, perhaps a percentage of money saved. Even if the fee was half of the money saved, members would benefit.

If state associations were not interested in providing this service, there are other organizations that might fill the gap. At the most recent NAB Radio Show, I attended a cocktail party for the newly elected board of the Independent Spanish Broadcasters Association. Another such group is The Idea Bank.

Groups like these might arrange for co-op buying for members.

Independent broadcasters can achieve the same purchasing leverage as mid-size to large groups if they organize themselves properly.

The author has worked as a radio chief engineer, video facility manager and equipment sales executive. He is domestic sales manager for Logitek; the opinions are his own.

RW welcomes other points of view.