Introduction
Growing your supplier base is essential for long-term success in today’s competitive business environment. Bigger suppliers have higher market share since they are more stable and can manage larger orders. However, more companies are seeing the advantages of dealing with smaller suppliers. Your firm may generate more money and operate more effectively by promoting new ideas and improving customer service by diversifying your supplier network. Here are the key reasons to add vendors to your network. A wider supply network may help your organisation develop over time.
More chances to come up with new ideas in supplier base
Strong commitment to growing your supplier base can open up new opportunities, like releasing new products, making current and potential new suppliers compete on price, which can lower your net costs, speed up time to market, and boost margins. All of these things can help you grow your business in a way that makes you money over time. If you only work with the same providers and don’t try new areas, you might not be as creative. A more “niche” product is often how smaller suppliers set themselves apart from their rivals. You also have a better chance of building relationships where people really work together, so you can use that idea and help shape it as your relationship grows.
Try out the different kinds of refund deals.
If you’ve worked with the same providers for a long time, they might get set in their ways and not want to change how they do business. However, refunds are a great way for businesses to grow and make money. Through our business, we’ve come across more than 300 different types of deals that could help you grow your supply base. Our software can help you keep track of all of them easily.
B better terms for the contract
It’s common for bigger providers to have tighter contract terms and not be able to make even small changes. This makes buyers angry because they are also trying to please people inside their own companies. But if you want to get better terms from your providers, you should look for smaller ones. These companies are usually more interested in the value of the deal and ready to negotiate.
Better communication faster
If you decide to add more suppliers, you may find that a smaller seller has fewer employees and, as a result, a shorter chain of command. This makes it easier to talk to their key decision-makers about your return deals, which speeds up and simplifies the process of making changes. A joint platform like Enable makes this process even easier by letting all conversation happen on one platform, so you don’t have to look through long email lines.
Service that is better
People who work for a company that doesn’t have many customers are more likely to give better customer service because they don’t want to lose your business. This makes them more open to ideas and tips for change, and it also means they’re probably more willing to be flexible on refund programs that make money. When you add these smaller suppliers to your list of providers, you will get more personalised service, which is an important part of staying ahead of the competition and working together more.
Make money.
A lot of businesses don’t look for all the discounts they can get from all of their suppliers. Most of the time, they don’t have time to do this, so they focus on the 20–50% of their sources that they think bring in 80% of their possible earnings. Should you not pay attention to these other smaller suppliers? The answer is no, because going after the “long tail” of refunds, as we call them, could get your company a big reward. By going after the “long tail” of rebates, for example, your 10 biggest sellers, who currently give you 90% of your total rebate earnings and are therefore very important to your business, could now give you 70% of your total rebate earnings (without lowering the value). This means you can depend less on a few suppliers by getting more refund money from sources you haven’t used yet. A study from the Hackett Group found that companies that take part in a long-term supplier diversity program get 133% more return on investment (ROI) than companies that only work with their usual suppliers. The study also says that buyer diversity programs add an extra $3.6 million to a company’s bottom line for every $1 million it spends on buying running costs.
In conclusion
Growing your supplier base is essential for long-term success in today’s competitive business environment. Bigger suppliers have higher market share since they are more stable and can manage larger orders. However, more companies are seeing the advantages of dealing with smaller suppliers. Your firm may generate more money and operate more effectively by promoting new ideas and improving customer service by diversifying your supplier network. Here are the key reasons to add vendors to your network. A wider supply network may help your organisation develop over time.
