SMB Procurement Challenges
Overcoming Procurement Challenges for Small Businesses
Small businesses often face many challenges when it comes to procuring much needed materials to run their day-to-day operations
Supporting Subheading
This Can Be Secondary Heading
Feature One
Feature Two
Feature Three
Feature Four
Feature Five
Feature Six
Some of these challenges are:
Limited bargaining power:
SMBs often have limited bargaining power when negotiating with suppliers, which can lead to higher prices and less favorable terms.
Lack of access to credit:
Many SMBs struggle to secure financing, which can make it difficult to purchase materials upfront.
Difficulty finding reliable suppliers:
SMBs typically have a harder time finding reliable suppliers, as they may not have necessary resources to thoroughly vet potential partners.
Limited resources for logistics:
SMBs typically do not have the resources to handle the logistics of materials procured, such as coordinating transportation and storage.
Limited options for sourcing:
SMBs have limited options for sourcing raw materials, which can limit their ability to find the best quality materials at the most competitive prices.
Difficulty adapting to changing market conditions:
SMBs struggle to quickly adapt to changing market conditions, such as fluctuations in material prices or shifts in demand.
Long lead times:
SMBs have to wait longer for materials to be delivered, which can disrupt their production schedules and lead to delays, they will also be the ones served last with limited supply vs larger entities.
Quality issues:
SMBs may have difficulty ensuring the quality of the materials they purchase, particularly if they are dealing with unfamiliar suppliers.
To address these challenges, small businesses can consider a number of strategies, such as forming partnerships or buying groups with other small businesses to increase bargaining power, seeking out financing options like loans or investment, developing relationships with reliable suppliers, outsourcing logistics to third-party companies, and being proactive in searching for new sourcing options.
A platform like Saveplex can help structure the SMB procurement process without IT infrastructure investments, check out our page on “Does a procurement platform help SMBs?”