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TL;DR: This article challenges the idea that bigger suppliers are always better. While established companies might be safe, they might not be the most innovative or offer the best pricing. Smaller vendors, on the other hand, can provide customized solutions, competitive pricing, and better support. They are more agile and driven by a passion for what they do, which can lead to innovation and a competitive edge for your business. By working with smaller suppliers, you'll benefit from a more collaborative partnership, tailored service, and a chance to contribute to a more diverse and equitable business landscape.
Big Fish in a Small Pond
“Nobody was ever fired for hiring IBM”. This is the old adage we’ve all heard countless times. It is based on the idea that “BIG” and “TRUSTWORTHY” vendors earned their reputation for a reason. However, there is another part of that old saying which is much more nuanced. It implies that companies like IBM are “SAFE” to choose because, even if they don’t have the best product or may even cost significantly more, you won’t get in trouble for hiring them.
Let’s think about that for a minute. Sure, safe and trustworthy are good. However, if every decision we make as leaders is limited to being safe or only choosing vendors who are firmly established, what are we missing out on?
This article looks to explore that question and, hopefully, will inspire you to engage with smaller, more innovative, firms when you are looking for products and services. Contrary to the belief that bigger is always better, engaging with smaller vendors can provide real benefits, ranging from fostering innovation, better pricing, customized solutions, and tailored support.
Pricing Power
Smaller suppliers are more inclined to offer competitive pricing that reflects their lower cost structure and willingness to trade margin in the short term in order to gain market share. By forging strong relationships with their clients, smaller suppliers can provide greater flexibility in pricing negotiations, aligning their fees with the tangible benefits they deliver.
Moreover, smaller suppliers are less burdened by bureaucratic overheads and legacy systems, allowing them to operate more efficiently and cost-effectively. They can pass on these savings to their clients, offering competitive pricing without compromising on quality or service.
Tailored Support and Enhanced Collaboration
In a marketplace inundated with choices, businesses often find themselves grappling with impersonal customer service and one-size-fits-all solutions from larger suppliers. In contrast, smaller vendors excel in delivering personalized support and fostering meaningful partnerships.
By engaging with smaller suppliers, businesses can gain access to a dedicated support network that prioritizes their individual needs and aspirations. Smaller vendors are more responsive and accessible, offering hands-on assistance and timely guidance throughout the procurement process and beyond. This level of attentiveness fosters trust and loyalty, laying the foundation for long-term collaboration and mutual success.
Furthermore, smaller suppliers are more receptive to feedback and proactive in addressing their clients' evolving requirements. Smaller suppliers can often get you “CEO-level access” that makes sure you get what you were promised. They view their clients as partners rather than mere customers, actively seeking opportunities for collaboration and co-innovation. This collaborative mindset encourages businesses to actively engage in the product development process, shaping solutions that are tailored to their unique preferences and specifications.
Driving Competition and Fostering Diversity
In a competitive marketplace, diversity and differentiation are key drivers of success. Engaging with smaller suppliers injects much-needed diversity into the supply chain, mitigating the risks associated with over-reliance on a few dominant players.
A diverse supplier ecosystem fosters healthy competition, spurring innovation and driving continuous improvement. By diversifying their supplier base, businesses can tap into a wider pool of talent, expertise, and perspectives, enabling them to adapt more effectively to market dynamics and emerging trends.
Lastly, supporting smaller suppliers contributes to a more equitable and inclusive business landscape. It empowers underrepresented entrepreneurs and minority-owned businesses, creating opportunities for economic growth and social impact. By championing diversity in their supply chain, businesses not only reap the benefits of innovation and competition but also fulfill their corporate social responsibility and contribute to the greater good.
Conclusion
In conclusion, businesses stand to gain immensely from engaging with smaller suppliers, leveraging their agility, innovation, and personalized service to drive growth and competitiveness. By embracing “small”, businesses can unlock new opportunities for innovation, enhance their competitive position, and build resilient supply chains that are primed for success in the dynamic marketplace of the future. As the business landscape continues to evolve, the symbiotic relationship between businesses and smaller suppliers will remain a cornerstone of sustainable growth and prosperity.
About Alan Veeck
Alan Veeck is the CEO and founder of Summit Procurement, Inc., a company that offers a full suite of procurement managed services to help clients get more value out of their spending with suppliers of goods and services. He has over 30 years of experience in the procurement industry, with a PhD in Science from the College of William and Mary and UC Berkeley.
About Summit Procurement
Summit Procurement enables enterprise clients to hit peak procurement performance. Our flexible managed services, staff augmentation, strategic training, and human-in-the-loop services are designed to lift procurement execution and create operational efficiency.