Let's see, we are a group of old-school engineers who had our first job in a refinery, making sure the cable pass boxes didn't fill up with oil.
When we founded Babelus, our dream was to connect emerging global suppliers with large organizations. The first idea was to build a marketplace where qualified suppliers could expose themselves to large organizations: a kind of Alibaba, but quality for enterprises.
With the illusion at the edge of our hearts, we went out to connect with hundreds of factories in Asia. We saw ourselves as a superhero on top of a building with a cape, proud to have thousands of suppliers paying for Babelus' service.
But, as happens to most startups in their early days, there is no worse plan than believing what you believe. Out of hundreds of suppliers contacted, there was only one that paid to be there. It's a deep topic, that we want to explore it further (Suppliers have a hard time paying in marketplaces).
As we walked around large utilities in countries across the Americas and Europe, selling our Alibaba Reloaded, we realized that these companies were willing to pay to meet more suppliers. It was the complete opposite of the model we had in mind. And thus, we got our first big customer: Red Eléctrica de España, one of the largest power transmission companies in Europe.
The utility had to go out and look for suppliers, and not the other way around. The workflow ensured a higher quality of information and real possibilities for both parties.
In another article, we talked about Supplier Hunting, so we will not emphasize it too much in this text.
Companies are forced to compete for the time of sales teams on the supplier side, meet the right person and nurture them to attract them to their purchasing portal.
By now we were in the startup world where everyone is talking about Inbound, Outbound, content, etc. How to apply it to expand supplier lists?
Outbound marketing is a strategy based on the concept of the sales funnel. Leads or prospects must be captured to enter through the top and navigate to the bottom.
Knowing people's names and job titles is called lead generation. LinkedIn is a great help, but not everyone is there. Using automation software can help you know the person and contact details.
For every vendor, there are no less than three salespeople, but how do you contact 1000 people simultaneously? And how do you persuade them to give you tailored information?
Thanks to technology, there are some amazing email marketing tools available. One of our favorites is Yesware, where you can upload 1000 contacts and design a campaign with different touches to attract them to your company.
Don't forget to have a CRM, where you can have the information on hand for each supplier, allowing you to qualify leads based on the stage of the relationship. We use HubSpot for that purpose, for example.
Just as companies must go out and find customers and talent, they must also go out and find suppliers. Using lead generation and email marketing automation marketing strategies is the most effective way to engage the right people and attract them to your company.
By the way, the Babelus database is so robust that we can offer suppliers their contact persons and invite them to provide information through our interaction module. With Babelus, you can forget about this process and focus on your business while expanding your supplier lists.
Babelus is gaining so much traction in the industry that the suppliers are contacting us to showcase themselves.
Ironically, our idea wasn't so bad. Now we have the suppliers; they just don't have to pay to be there.
Today we want to talk about Supplier Hunting applied to large organizations and demystify the concept of
"I'm big, the best will come to me"
As we explained in one of our previous articles, one of the biggest challenges for emerging suppliers is to promote themselves to large companies. Vendors have to face the cold cabin of entering the purchasing portal and leaving their data. Many are not even attracted to the idea of doing so.
All of us who have been on the sales side of the supplier side know that salespeople are a specimen. I like to use the shark analogy. We need to see blood to move. This causes sales teams to focus their efforts on targets that are achievable.
It's worth remembering that salespeople rotate through companies and that makes their objectives very short-term, which affects future sales planning. This explains why it is so complex for a factory to take the time to complete a company registration or successfully execute an approval process.
Salespeople have 8 to 9 hours a day to accomplish their goals, so they will primarily invest their hours in those processes where they can have a return in the short term. That is, in potentials where they see a real opportunity to close business.
So, just as organizations must go out and find the best talent to attract to their company, they should go out and find qualified prospective suppliers and persuade them to invest time in registering and preparing bids.
Remember, to compete for their attention and get a few hours from the vendor, without promising business.
But expanding the list of qualified suppliers can help you mitigate the risk of depending on only a few, and encourage competition to improve your buying position.
By the way, the Babelus platform fully automates this Supplier Hunting process by providing supplier data by category including the contact person, nurturing them about the company and attracting them to your account within Babelus to provide information so you can get a short list.
The market
The procurement process goes through the following stages: discovery of suppliers, invitation to bid (RFP), award, and delivery of the good or service.
Currently, there are two groups of companies:
The Problem
Group 1 companies do not expand their supplier lists because it is simply too tedious. They simply stick with their regular suppliers without an easy-to-use platform or reliable, affordable external services and avoid generating savings by not having qualified incumbents:
On the other hand, Group 2 companies expand their lists because they understand that the permanent expansion of their supplier base encourages competition, which translates into savings and improved commercial conditions, including delivery lead times. In addition, the current situation of supply chain crisis is forcing many companies to run for new suppliers.
Group 2 companies basically google for months to get to suppliers. But it would take a human to scroll through Google results for months to create a decent list of suppliers, and they only get a partial view of the market. Other companies hire expensive consulting firms or use services like Tealbook or Scoutbee. The following diagram shows both groups:
The Supplier Discovery process from a mountaineering perspective
Basecamp (Longlist)
Generating the first list of suppliers (long list) is only part of the problem. A purchasing process aims to get qualified competitive suppliers to participate in a firm process. These lists are based on "the category" rather than the product itself.
In mountaineering terms, the first list would be the equivalent of setting up the equipment at base camp. Companies do this by googling for months, hiring consultants, or paying for expensive services like Tealbook and Scoutbee.
Camp I (Medium list)
Once the universe of suppliers is known, it is time to find out which of them could offer the product the buyer requires. Buyers, with or without the help of end-users, go through the profile of each supplier to analyze which of them could deliver the required product. It is a tedious process for humans, as they have to go through each supplier's website or catalog.
Camp II (Data Collection)
Now the buyer knows who the potential suppliers are. Early data collection allows knowing in advance if the supplier qualifies and if it is worth inviting him to a firm RFP process in the e-procurement.
In this phase, the buyer asks potential suppliers to provide information. This process is usually carried out via email, generating chaos and stress for the buyer as he interacts with dozens of suppliers, telling their stories and providing credentials.
Camp III (Evaluation)
We have now entered the critical phase (death zone). The objective of the evaluation is to know which ones can:
When the buyer has this information, they can only invite qualified and competitive suppliers to a firm process.
Knowing the reference price in advance in some categories with mandatory homologation becomes essential. It is a game-changer that allows them to save months and money. Many companies invest months in homologating suppliers that turn out to be uncompetitive.
This step is possibly the biggest bottleneck in the process, as the buyer and end-user must analyze dozens of files containing technical and commercial proposals.
Summit (Short List)
Once qualified and competitive suppliers are known, they are invited to register with their e-procurement to participate in the RFP process.
This process is everything that happens before e-procurement. Companies that regularly expand their lists have significant benefits in saving money and time, besides becoming an indispensable tool in these times of supply chain crisis.
How Babelus helps companies
Large corporations use Babelus as the first filter before e-procurement.
Babelus entirely digitizes this process by providing buyers with qualified lists, eliminating endless research on the internet.
The platform has a super-easy interface enabling easy interaction with prospective suppliers and allowing for the automated tailored information gathering, reducing the chaos of email interaction with hundreds of companies.
In addition, our AI allows automated analysis of profiles and technical/commercial documents to create short lists, and save the manual work of analyzing dozens of specifications and reliance on the end user.
Our Database is powered by our AI scraper, which allows us to offer the most complete and up-to-date supplier information in the market, which is complemented by vendors.
If you want to get detailed information about how Babelus helps you to reach the summit smoothly, please write to support@babelus.com, and we can share use cases documents so you can learn how our customers are improving the supplier base and saving money and time.
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