Navigating Corporate Supply Chains: Social Procurement vs. Traditional Procurement
Congratulations on taking the bold step of establishing a social enterprise! You’re not just in business to make a profit; you also aim to make a positive social or environmental impact. As you explore avenues to sell your products, understanding the difference between traditional procurement and social procurement in the corporate supply chain can help you get in the game.
Traditional Procurement: The Tried and True
In traditional procurement, the primary concerns are cost, quality, and speed of delivery. Corporations seek to minimize expenses while maximizing the value they get from their suppliers.
If your product has a competitive price and quality, it may get shortlisted. However, your social enterprise’s objectives may not carry significant weight in the decision-making process.
Tips for Selling to Corporations the Traditional Way
- Emphasize Cost-Efficiency: Make sure your product offers good value for the price.
- Stress Reliability: Build a case around the consistency and quality of your product.
- Speed of Delivery: Offer the best delivery conditions possible to make your product more appealing.
Social Procurement: The New Paradigm
Social procurement includes considerations like ethical sourcing, environmental sustainability, and community impact. These factors are integrated into the procurement decision, often as a part of the corporate social responsibility (CSR) strategy.
Here’s where your social enterprise can shine. Companies looking to strengthen their CSR portfolio may prefer suppliers who can add value not just to the business but also to the community and whose products are sourced so they don’t take a toll on the environment.
Tips for Selling in the Realm of Social Procurement
- Highlight Impact: Showcase the positive social or environmental impact of your product.
- Align with Corporate Goals: Research the company’s CSR initiatives and explain how your product aligns with them.
- List Your Certifications: If you have any sustainability or ethical business certifications, bring those third-party endorsements to the table.
Key Differences Between Traditional and Social Procurement
Decision Criteria: Traditional procurement primarily focuses on financial metrics, while social procurement looks at broader indicators, including social impact.
Corporate Engagement: In social procurement, your relationship with the corporate buyer may extend beyond transactional terms, potentially involving partnership on shared social goals.
Long-Term Viability: Social procurement often values long-term relationships and sustainable practices over short-term financial gains.
How to Position Your Social Enterprise
Know Your Audience: Some corporate buyers may be mandated to include social enterprises in their supplier mix. Find and target these companies. (Their CSR reports may give you clues.)
Craft a Dual Pitch: Prepare two versions of your sales pitch — one focusing on the traditional procurement values of cost, speed, and quality, and the other focusing on social impact. (There may be more than one person or department in the decision-making process.)
Leverage Networking: Utilize your social enterprise community to get introductions. Companies are more likely to trust suppliers who come through a trusted network.
Understanding the nuances between traditional and social procurement can help you tailor your approach and make your social enterprise more appealing to corporate buyers. So go ahead, craft that pitch and take your social enterprise to the next level!
By navigating the world of corporate supply chains with these insights, you’ll be better positioned to make meaningful connections, impactful collaborations and increased sales.
SEA’s Take on the Future of Social Procurement
Social enterprise adds tremendous value to the economy. Yet much of that value goes unaccounted for — and it does not get our products into corporate supply chains or make them candidates for government procurement officers. It’s going to take an alliance of social enterprises to change that.
That’s why SEA is pleased to have begun working as a verification partner with Social Enterprise World Forum and Good Market to get more social enterprises in the U.S. verified and certified. Verification is a first step to demonstrate the power of the social enterprise sector. It is a step that will lead the sector toward an advocacy effort to get more social enterprise products into corporate and government supply chains.
If you are a social enterprise or want to support social enterprises, then now is the time to get involved. The movement in the U.S. is on the cusp of great change and we are going to need each one of you to help make it happen.
