The creation of a non-profit purchasing cooperative for American Indian businesses is an idea whose time has arrived. Like many ideas it is the implementation that will be the challenge, although to create this mechanism is relatively simple. Such a non-profit organization for Indian nations large and small will leverage the buying power of all our businesses together. This concept will not just save money through better prices from vendors, but also could create wonderful economic opportunities, particularly for smaller Indian nations in need of economic development.
This is a simple proposition, and one based on an idea that has proven beneficial to numerous organizations and groups of nations many times over. And, let's face it, there are many vendors who believe - some even boast - that they have Indian country "locked up." One large computer company believes they control the business of certain gaming nations as theirs and theirs alone. They have staked claim on our purchases as their gold mine, that is the growing Indian business economy, and claiming it as their own.
But, each time we work together, we become stronger. We all know that oftentimes politics and old issues can prevent us from working together. Nonetheless, politics aside for the moment, all of our businesses across the United States share much in common, particularly in what we purchase. Gaming businesses, for example, have many commodities in common: we all purchase computers and software, food, restaurant supplies, paper products, and gaming products. As we purchase these commodities as a united group, our buying power multiplies incredibly; this in turn will yield savings that benefit us all.
Given the current and future magnitude of the American Indian economy in the United States, the savings can be more than significant. Let's suppose for a moment this purchasing cooperative is working on behalf of nations that buy $10 billion worth of products. A simple 10 percent savings on these purchases yields $1 billion. The savings could then be pro-rated back to each member nation.
Even Indian nations with smaller, non-gaming business operations could benefit from being members of such a co-op. First by reducing the cost of products, and secondly by vertical integration opportunities.
Many Indian nations are unable to avail themselves of the economic benefits of gaming. They may be in a rural area or be situated where the demographics or politics of the state do not allow gaming to be a viable enterprise. The purchasing cooperative model could be helpful. To illustrate, all of the gaming nations need high quality beef products for their restaurants. It is easy to imagine in such a situation creating a large herd of high-quality beef cattle to supply Indian restaurants around the country. We have to buy beef anyway, so why not buy it from another member of the co-op?
Thus, vertical integration multiples the benefits of the cooperative. Not only do cooperative members have a supply of lower-cost beef, but the Indian nation in need is able to benefit from jobs and other economic opportunities for its members. The concept could apply to many other widely used products as well.
It is possible to create a highly efficient supply chain that benefits all Indian owned businesses. This synergy will save money, and as we can see, it could help people in Indian nations that have not been blessed with the economic benefits enjoyed by those of us who have successful business operations.
And, it is not just Indians within the United States who stand to benefit. This model can be extended to aid Indian or indigenous peoples elsewhere. For example, we all buy coffee. Our own Oneida Nation is working with indigenous Guatemalan coffee growers. We are reducing and hoping to eliminate the costly middlemen and buy coffee beans more directly from the growers. They ship to a coffee roaster here in New York that we have an existing strong business relationship with, and those Guatemalan coffee beans wind up not just in the coffee we serve at our casino resort, but also in a blend of coffee the roaster sells elsewhere.
The Guatemalan growers benefit by receiving a much better price for their beans, and the indigenous community is more directly benefited. The roaster benefits because it receives a steady supply of high quality coffee beans for its products. The Oneida Nation benefits because we have the highest quality coffee in our restaurants and meet our goal of working with other indigenous people whenever possible with a practical cost.
This is synergy. Everyone benefits. Yet, we should say, nearly everyone. This idea will be resented and resisted by some. For example, vendors who want to extract as high a profit as they can. They will not like the idea of us pooling our buying strength to leverage better prices.
There are also existing relationships between purchasing departments and agents that existing systems will not want changed for a variety of reasons. However, we are the owners and ultimately we need to do what is best for our own interests and our people. The Oneida Indian Nation will continue to develop this concept and welcomes discussion with all who would like to do so.
Ray Halbritter is the Nation Representative of the Oneida Indian Nation, which is located in what now is Central New York. He is a graduate of Syracuse University and Harvard Law School. Halbritter is CEO of the Nation's various business enterprises.