While doing my usual scroll of LinkedIn, I came across this interesting quote by Tom Goodwin. Uber, the world’s largest taxi company, owns no vehicles. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.”
It begs the question – how these businesses managed to become this successful?
Well, through their extensive, well-maintained, and mutually beneficial partnerships with multiple vendors, of course.
Today, around the world, this business model has caught on like wildfire. Many start-ups are providing a product or service where they do not directly own assets themselves. And the one need that all of them have in common to build a successful vendor network is to design the perfect digital onboarding system.
Let us delve into details.
What is a Digital Onboarding System?
To understand how disrupted the current vendor management process is, let us take the example of an aspiring online florist business. The problem they are trying to solve is to ensure that people can send, receive floral arrangements of any kind, at any time. To make this a viable business, they need suppliers who can regularly supply fresh flowers to them. They would also need someone to provide them with baskets and other decorative paraphernalia.
These suppliers are vendors for an online florist. It would be easy to manage a few vendors manually. But what happens when the business expands, servicing multiple locations? The need to manage flower suppliers in all these locations becomes immediate.
A digital onboarding system will then help our florist to quickly onboard vendors from anywhere. It will help you identify reliable vendors, perform quality checks, and maintain a good relationship with them. All of this automatically!
Building a Healthy Vendor Network
Owning and managing a healthy vendor network is no mean feat. It is not an overnight process. You will have to put in the same amount of effort you put into building your business. Sometimes, more! Here are some pointers you need to keep in mind while looking for vendors.
1. Do diligent research
Before even trying to find vendors, you need to understand them first. Here are some quick checks:
- Pain points with their existing partners (that is, other online sellers/marketplaces)
- Problems with existing clients (while selling directly to customers) and the benefits of partnering with you
- Why you are better than their other partners/distribution networks
Also, explore the local laws and legal or compliance issues that may arise while finding vendors in your preferred geography.
2. Build a team
Have a vendor onboarding team in place that locates the right vendors for you. Mobilize them and equip them with a digital onboarding system that will help them add vendors, collect documents, and more while being in the field.
3. Pre-screen vendors
The vendors you choose might partner with your business for many years. Keeping this in mind, vet your suppliers. Check for any issues, red-flags, or blockers in their profile. Also, ensure that they can match your requirements, schedule, and deadlines. It will save you a world of pain later.
4. Train them
For your vendors to work the way you want them to, you should train them on your internal practices, processes, values, and even software. Then, they will be able to adapt to your way of doing business quickly.
5. Create policies
Get your legal or planning team to draft official rules for your vendors. The policies could include material quality, spend limits, payment conditions, and more. Having your onboarding process in writing will help keep things smooth and hassle-free. Also, by being transparent with your vendors about your expectations, you can maintain a robust partnership with them.
6. Track performance
Keep your vendor network thriving by regularly checking how vendors are performing. Let your vendor management system tell you when something is going wrong, so you can quickly take corrective measures.
Finding the Best Digital Onboarding System
To help you in your quest to maintain profitable partnerships with your vendors, you need to choose the right solution to make this process much smoother. Before you begin looking for a tool, you must define your problems and understand the features and benefits of an ideal solution. Here are some features you should have on your checklist while choosing the best vendor onboarding platform.
1. Easy lead capture
There may be vendors who are on the lookout for a partner like you. And you may have various sources from which you actively discover new vendors. You should be able to find, add, manage, and automatically nurture these leads while keeping a tab on where they are in the onboarding process.
2. Mobile onboarding
If you have a feet-on-street team to find new vendors or onboard vendors for you, then give them the right mobility tools (mobile CRM, for instance). Allow them to get notified when a new vendor is being assigned to them, quickly add new vendors, and collect documents on the go.
“Where an individual salesperson took around 8-10 mins to fill in the required details of a prospective supplier, with LeadSquared, it just takes a minute. We are very pleased to see that the productivity of the team has increased to 70% from an earlier 5-10%.”
Saurabh Sudhanshu Tripathi, Senior Business Development Manager-Inside Sales, Ex-Meesho
3. Real-time tracking
Let the tool plan the day for the agent, taking account of his assigned/daily tasks. On your side, you should be able to track where your agent is, how many meetings he has completed, how many he has missed, and if there are any location mismatches (that is, you can geofence their activities). You can then rest assured that no misrepresentation is happening and that your rep is contacting all your vendors on time.
4. Automatic routing
Once the field agent captures the vendor details, the lead should get automatically assigned to your verification team. They can then perform background checks and risk analysis to understand if the vendor would be a good fit for you. Once they pass the verification, voila, the vendor is now onboarded.
5. Detailed analytics
You should know the performance of your agents. For instance, how many vendors they onboarded, where they are in their lifecycle, and how many they have missed. Similarly, you must be able to track how vendors are performing. Set triggers for low performance, and quickly let the vendor know. You can also send them tips or tricks to get their performance up.
Learn the basics of vendor onboarding process: what is vendor onboarding and how to build an optimal process?
In Conclusion
For many large enterprises, supplier onboarding takes anywhere between 3-6 months. It is because of several operational, reputational, data security and privacy, compliance, and regulatory risks that come into the picture.
Instead of manually solving a problem that requires a modern solution, invest in a digital onboarding solution. The above points illustrate how you can maintain a healthy vendor network. It also highlights how to choose a tool that will help you realize that.
There is a range of benefits that you can get from having a vendor onboarding system in place. Some of them are:
- Improved process efficiency
- Risk mitigation
- Faster onboarding
- Stronger vendor relationships
- Automation of repetitive tasks
I think I have given you enough and more reasons to start looking for the perfect onboarding system.
One tool that fits everything I have just described is LeadSquared. It allows you to onboard your vendors easily, build a productive onboarding team, and helps your vendors perform better.
As Kabeer Biswas, CEO & Co-founder, Dunzo says, “the typical onboarding process for each Dunzo partner store previously took days as it involved multiple steps including capturing details of the store, verification, negotiation, cataloging, and more. With LeadSquared, Dunzo has managed to shorten this cycle while improving team collaboration and efforts. The key has been a streamlined process and an efficient team, allowing them to undertake vendor onboarding at scale.”
So, try LeadSquared vendor onboarding platform to make your FOS team more efficient!
