Todays post is from Ron Southard, CEO at SafeSourcing Inc.
Suppliers can be broken into multiple categories such as Manufacturers, Wholesalers, Distributors, jobbers etc. SafeSourcing maintains a robust database called the SafeSourceIt™ Supplier Database that consists of greater than 427,000 global suppliers. While this is our primary research facility for identifying suppliers that participate in our eRFX events, we also use other sources such as the Thomas Register, Alibaba, and a variety of Search Engine tools.
While it would be ideal for manufacturers, growers etc. to be the primary participant in an RFP or RFQ, for the most part these companies determine how and to whom they want to take their products to market. In many cases, Manufacturers refuse to go to market directly and often direct us to use their distributors. Quite often they will recommend a couple of distributors because distributors typically have value added services that they want to provide and may bid the base products differently even if they are receiving similar volume discounts. In some cases, there may only be a couple of manufacturers of a particular product. An example in the C-store space is spill bucket liners and drain plugs where historically there were only two manufacturers.
Once we have compiled and reviewed a list of suppliers internally for a category, we review it with our customers who may from time to time have the name of a supplier we are not aware of. Although that is rare. Upon approval from our customers we then send invitations out to the suppliers and await acceptance over a pre-determined period. After that time has expired, SafeSourcing will reach out to all suppliers whether they have accepted or not and encourage all suppliers to participate. We are well practiced at this methodology and do not accept no as an answer. Our team regularly goes through training as to handling objections from suppliers to convince them to participate.
Historically the average number of suppliers participating in eRFX events has been between 5 and 7. That is over many years with categories like hotels or temporary labor that included 100’s of participants. We quite often will have to invite more than the 5-7 average to get that many to accept. Ultimately it is up to the suppliers if they want to bid on our customers business.
Obviously, the number of suppliers we end up inviting, convincing to participate, training, answering questions and hosting increases SafeSourcing’s workload as the numbers grow. As such we have always charged a second event when the number of actual participants reaches 10 or exceeds twenty-line items.
While one may think that the larger the number of participants involved, the better the results will be, that is not actually the case. The spill bucket and drain plug category mentioned above, we have achieved 19.7 percent savings with just two participants and have hosted events with just one participant. Suppliers do not know how many others are bidding in any given event and that is part of the process for them not to know.
While customers may challenge participation from time to time, rest assured that SafeSourcing is continually driving to get as many participants involved as possible.
If you’d like to learn more about working with SafeSourcing, please contact a SafeSourcing customer services associate. Make sure to ask about our risk free trial program.