Small Businesses Want to Increase Supplier Diversity in 2021

Having a single supplier is extremely risky for any business, as the pandemic proved with real-world results. And according to the Amazon Business B2B E-commerce in Evolution Report, businesses are very much aware of this problem. The report goes on to say supplier diversity remains a top priority among B2B buyers this year.

Small Business Supplier Diversity

Increasing the diversity of your small business suppliers allows you to maneuver through unforeseen events and challenges. And the pandemic challenged this idea to the limit. Businesses of all sizes were scrambling to find new suppliers after many companies started shutting down.

In the past year, 85% of business buyers were driven to move more of their procurement online because of COVID-19. And not surprisingly 96% are anticipating their organization will continue to make more purchases online. Another revelation from the report is 91% of buyers prefer e-procurement over traditional and offline purchasing methods.

But this doesn’t mean leveraging e-procurement will be enough, as Todd Heimes, director of Amazon Business, explains in the release. Heimes adds, “Ultimately, we think that organizations have a significant opportunity to maximize e-procurement technologies that will help them overcome operational challenges that diminish efficiency and waste budget.” Buyers and sellers must navigate their transformation journeys with technology and expertise.

Digital Transformation

The pandemic is responsible for many businesses accelerating their digital transformation. For 56% of small and medium businesses (SMBs), the full digitization of their purchasing is directly because of COVID-19. And unlocking these capabilities and features is going to allow small companies to do more and compete.

In the report, buyers and sellers say online features are valuable.

• For buyers, online product comparison features rank the highest 83% of the time, whereas for sellers they rank it the highest 67% of the time.
• Product videos are the highest 74% of the time for buyers and the feature is highest 66% of the time for sellers.
• Viewing products in a physical store is highest 68% of the time for sellers, and it is only 57% of the time for buyers.
• Phone and/or video calls with a sales rep is highest 69% of the time for sellers, but for buyers, it ranks highest 63% of the time.

The top priority for sellers is providing positive customer experiences (62%), expanding customer bases (59%), and selling products globally (40%). . On the other hand, buyers want to increase efficiency (40%), and reducing costs (34%) is a top procurement priority this year.

Environmental and Social Issues in the Procurement Process

The Amazon Business report also highlights the push to prioritize social and environmental issues by consumers. In turn, it is becoming important to both B2B buyers and sellers in all industries.

Improving sustainability in purchasing (39%), supporting local businesses within our community (37%), and increasing diversity among suppliers (35%) are top procurement priorities in 2021. Socially, 83% of buyers say they plan to increase their purchasing budgets reserved for Black and minority-owned businesses in 2021. Of those, 48% are looking to increase their budgets by 20% or more.

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This article, "Small Businesses Want to Increase Supplier Diversity in 2021" was first published on Small Business Trends