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Many small businesses make the same mistakes when trying to sell to the Fortune 500 companies , say Brian Tippens, director of Global Supplier Diversity and Sustainability at Hewlett-Packard (HP), Phyllis Meyer, senior analytics consultant at Dun & Bradstreet, and Bill Balduino, Vice President of Risk Management at D&B.
When you think of large companies operating in the country, such as Femsa, Grupo Carso, Walmart or Cemex, to name a few examples, you are likely to feel intimidated just hearing these names. From the outset, you would never think of becoming a supplier of them, because perhaps you are just starting your project or your business does not have a great infrastructure or an army of collaborators.
The good news is that you don't have to be a large company to sell products or services to a firm that even has a global reach. Follow the practical tips that this group of experts reveal to tie up a great corporate account.
1. Do your homework. Well-prepared entrepreneurs know what products or services (which they could offer) their prospects are already using. They have also weighed the offer of the competition (points in their favor and disadvantages) and are ready to explain why doing business with their small or medium-sized enterprises (SMEs) would mean a better deal for both parties, says Tippens.
2. Prepare an ultra-condensed presentation. You have to be ready to "shoot" your speech (full of solid arguments) in the corridors of the sales departments of large companies, especially, at massive events such as "Suppliers Day". The HP manager recommends that you prepare to explain what you do and why you are the best alternative in just 30 or 60 seconds .
“I've seen many business owners - looking to be our suppliers - say, what does HP need?” Says Tippens. "Instead of: this is what I do really well, that's why what I offer you is better than the current solution you use."
3. Keep your finances in order. Balduino, from D&B, cautions that you should be aware that buyers of large companies will investigate your credit, both at the time you win the account and regularly and afterwards. What happens is that they are looking to do business with you as if you were a risk. "Remember that if your evaluation shows that you are in the red, you could lose count," he says.
4. Comply with your deliveries. For example, if you do not have the manufacturing capacity to sell your product to a large national chain, make it clear from the beginning.
Balduino assures that large companies want to form relationships in constant terms, they do not make occasional purchases. So make sure you can provide the volume they need.
5. Make a follow-up plan. Remember that buyers are always busy. Therefore, be persistent - but not a plague - and they will see that you are a serious person. At the end of your meeting, ask the following question: “What's the best way to keep in touch with you?” Tippens suggests.
6. Use professional business cards. For his part, Meyer says that at D&B everyone says that if "you paid for both sides of the card, you should use them." Put a special offer on the back and make sure it has all your references and contact information, such as your address, phone, cell phone and email. Cards that have nothing but your name and that of your company do not present your business in a very professional way. And the worst of all is that you do not give options for them to contact you.
7. Open a corporate email account . Nothing disappoints a purchasing manager looking for great suppliers more than hearing your elaborate presentation about your company's wonderful skills and ending with, "so please contact me at …@yahoo.com." The advice here is simple: Invest in a professional website and email address bearing your company name.
Myths and realities of retail
If you are looking to become a supplier to a large supermarket chain , take into account that there are some mistaken beliefs about this sector. Some of the more common ones will be clarified below.
Myth. If I sell to a retail chain, my problems as an entrepreneur are over.
Done. The reality is that work begins after delivery. Once the merchandise has been supplied, you must be aware of analyzing the movement of your items on the sales floor and, above all, of how many products pass per day and per store at the cash register.
Myth. You must produce a huge volume to be a supplier to a commercial chain.
Done. There are suppliers that enter to supply a single store and from there grow to meet the demand for more units. The truth is that a company can sell according to its production capacity.
Myth. My product is good and therefore it has to be sold.
Done. Everyone is in love with their offer. But the main criticism of the article has to come from the same manufacturer. The supplier must not only present his product to the potential customer, but a profitable business plan. Put yourself in the shoes of the purchasing manager and evaluate yourself; Ask yourself this question: would I really buy this item myself?
Myth. Getting along with the buyer guarantees business.
Done. The personal relationship takes a backseat; what really counts is how much product you move on the sales floor, the profitability and the rotation of the articles.
Expert advice
Avoid assuming the attitude that big business is doing you a favor. If you arrive with a solid plan and objectives, and show the buyer that your product will have turnover and the company it represents will make money with it, you will surely conquer it.
Here are the key questions to ask the buyer in order to reach an agreement that benefits both parties:
How many units of my product do you need to sell each week per store and at the chain level to make it feasible for your company?
At the company level, what are the margins with which you are going to mark my product to see if between the two of us we can develop a pricing strategy?
In this context, you should also know what other charges the commercial chain can make, such as the logistics cost of its distribution centers or the discounts it makes for opening stores, advertising, exhibition, etc.
What is the structure of your organization : who do you report to and who do you report to? (This is so that if you have a problem with a buyer, you know who to turn to to resolve it.)
What is the purchase process and how long can I start delivering it to you? (The objective is that you take the initiative so that together they follow an agenda).