Suppliers: Don’t Waste Money On Ariba Discovery/Other Networks Unless You Can Play the Game (Part 1)

Among those in the industry who follow supplier networks and online marketplaces offering a capability for buyers to discover or search for suppliers, it's well known that the majority of suppliers who end up paying fees for a service don't end up recouping the investment -- or if they do on a hard dollar basis, the amount of time and effort expended in RFP chasing is not really worth it compared to developing relationships in other ways. Yet suppliers can put the odds in their favor if they know how to play the system to their advantage, taking full advantage (and then some, in certain cases) of the benefits of online marketplaces. I recently reached out to one of the venerable marketplace leaders, MFG.com's Mitch Free, to ask him (via Twitter, so the responses had to be short), what he thought.

Here's the tweet trail:

@mitchfree: What are the top three characteristics of those suppliers who do well in the MFG marketplace?

@spendmatters: Traits of the top suppliers: #1 Focus on what you do better that anyone else, be known for something. Own a niche.

@spendmatters: Traits of the top suppliers: #2 Ask your customers where they would look for new suppliers and get yourself in that channel

@spendmatters: Traits of the top suppliers: #3 Don't let 1 or 2 customers become 80% of your business. Too risky.

Among these recommendations, I believe that in terms of building a book of business, the first and second recommendations are key. But to these I would add that responsiveness counts, as does developing a system for quickly weeding up "shoppers" vs. "buyers." It's also important to look for those who just want to use you as "column fodder" as I used to say when I did sourcing, searching out new suppliers who could create added competition for incumbents without any realistic chance of winning business.

Perhaps most important, it's critical to remember that participation in supplier networks or marketplaces from a business development (vs. transactional, on-boarding or credential/vendor management) perspective should never take a "Field of Dreams if you build it, they will come" type of approach. Have a purpose in going online. Align the right individuals behind the effort. Make the investment. And go full bore on earning your money back and creating a positive ROI for both your time and dollars. Otherwise, don't even consider taking the plunge of joining a supplier network that requires you to pay up front to win new business.

Jason Busch