How to engage small business sellers: Securing minority/small/diverse business contracts
Recently, Anne Rung, Director, Public Sector at Amazon Business and American City & County’s Editorial Director Bill Wolpin discussed government agencies’ struggles to discover small business sellers, and small businesses’ struggles to reach potential government buyers.
Bill Wolpin (BW): Anne, what are the challenges for businesses?
Larger companies have dedicated public sector staff and resources, whether it’s hired consultants or a dedicated team within their company to help them navigate the very complex world of government processes and regulations. That includes such challenges as: How you register as a government supplier; how you certify yourself as a diverse business; how to find government opportunities; and how to market yourself to 3,200 separate procurement offices in the Federal Government, for example. It’s made even more complex by the hundreds of regulations governing the contracting process, which can require a team of lawyers to review and translate and determine liability if awarded the contract.
These challenges are particularly acute for small businesses in government purchasing because of their limited staff and resources. You can imagine the challenge for small businesses who do not have the resources or expertise to review and understand complicated and ever-evolving regulations. I’ve read through some of these regulations myself and even with my years of experience in both the private and public sector, I don’t necessarily always understand the implications. And once awarded a contract, a business then has to submit detailed reports to governments to demonstrate compliance with various regulations and contract performance. Even something as simple as changing a price in their government catalogue requires the ability to understand and navigate government processes. Beyond winning a contract, there are challenges in how to administer that contract day-to-day and how to grow it over time.
BW: What are the barriers to connecting government buyers with small sellers?
AR: In my government experience, I know despite strict procurement targets and a desire to purchase from small, diverse businesses, it can be very challenging to find these sellers. For example, when I was required to first seek out small businesses for a service that I needed, I encountered difficulty finding a comprehensive list of small businesses. I was eventually redirected to an Excel spreadsheet that was not particularly descriptive and had limited and/or outdated information. From there, I had to email and call each of the companies directly to request proposals. After several days, I received the proposals, evaluated them and – sometimes unfortunately – none of them would be a match for my requirements. After meeting with our small business advocate to document my due diligence, I would start the process over again with an expanded scope to include large businesses. All in all, it was a time-consuming and frustrating process.
BW: What has your company done to break down those barriers?
AR: Amazon Business obsesses over our customers, and our customers clearly told us they want a way to more easily find and purchase from small businesses. We’re breaking down long-standing barriers in every step of the public sector buying process – from sellers being able to easily upload their small or diverse business certification on Amazon Business, to buyers being able to quickly search and filter on our 11 certifications to find the right offers. Because Amazon Business brings together buyers and sellers, there’s no need for a seller like Office Tex, one of our small, women-owned sellers that sells to government agencies, to drive around Texas to meet with government customers as they used to have to do. They also no longer have to invest in marketing materials or struggle to find upcoming opportunities to grow their business exponentially. In this way, Amazon Business serves as an online match making service between government buyers and the small business sellers.
BW: You mentioned in your blog that King County, Wash., asked a potential small business to register on Amazon Business because they figured that would be the simplest way for them to work together.
AR: Yes, King County, Wash., one of our customers and one of the larger counties in Washington state, released a video targeted towards King County’s registered small business titled “Help us find you.” The video tells small businesses that King County wants to direct their spending towards them, but “we can’t find you.” They advise small businesses to register with the county, if they haven’t already done so, and add their certifications to their Amazon Business seller profile so their buyers can more easily recognize and find these sellers when making purchases on Amazon. This call to action illustrates the difficulty governments experience to find existing registered sellers, the challenge to expand their pool of small business certified sellers and the benefits of using Amazon Business to overcome these challenges.
BW: You also touched on a couple of things such as minority-owned business. How many of your small business customers are minority-owned?
AR: I don’t have the exact number, but we support minority-owned business certifications from both the National Minority Supplier Development Council as well as the U.S. Small Business Administration. Earlier this year, we engaged in a pilot with the Minority Business Development Agency (MBDA) at the U.S. Department of Commerce to help bring more minority-owned businesses onto Amazon Business. We are doing focus groups to better understand their unique challenges, developing a learning series and we are also hosting a buyer-supplier matchmaking event. We continue to work with our customers in the public and private sector to find new ways to find and buy from minority sellers as well as small business sellers.
BW: Are you going to offer training to either help the government buyer or the minority-owned business or small business for example?
AR: Our goal at Amazon Business is to make the purchasing, buying and selling experience so easy and intuitive that additional training isn’t required. We want selling partners to only need to access Seller Central, which is a dashboard that provides all the information they need to know about selling on Amazon Business, to create and manage their products, adjust pricing and manage their returns. With Seller Central, sellers can also participate in a seller certifications and upload those small- and minority- or diverse credentials. Then for customers, we want the buying experience to be so easy that they can search and sort by the 11 certifications listed on the left hand side of our page. Filtering by certifications makes it very easy to understand when you’re buying from a small business seller and simplifies the process to find and purchase from them.
BW: In many cases, it is important for the government to buy from small businesses, and many face regulatory policy requirements to do so. Do you see those regulatory policy requirements increasing for more governments?
AR: There are regulatory and policy requirements across government agencies, and these government agencies place a strong emphasis on using their contracting dollars to drive socioeconomic outcomes, including helping small businesses – that will never go away. The challenge is that the government has inadvertently created barriers by making the process very costly and complicated. In my opinion, there will continue to be an emphasis, if not a stronger emphasis, on helping small businesses grow and prosper. It’s also just the right thing to do. At Amazon, we want to bring buyers and sellers together and help those small businesses to grow and prosper. On our blog, we feature several diverse small businesses that have used Amazon Business successfully, including a local, veteran-owned Seattle company, Pacific Northwest Business Office Products, which has seen their revenue increase over 40 percent since selling on Amazon Business, and their business is still growing. The buyers can use our search tools to find these certified veteran-owned businesses. Kelly Cudworth, the CEO of Pacific Northwest Business Office Products talks about how by using Amazon Business, he was able to sell to King County, which had been a challenge for him historically. For small businesses like Kelly’s and others, we offer training and dedicated account managers, which provides support to help these companies be successful on Amazon.
BW: Any last-minute thoughts?
AR: It can be a struggle to own and operate a small business, but particularly so when you’re trying to enter into the government space, which can feel very different from the commercial space. However, there’s a great desire by the government to purchase from small businesses. This is driven by a federal law that requires agencies to direct 23 percent of their annual procurement spend to small businesses, as well as state policies or preferences, like in the case of King County, Wash. which requires diversity in small business targets. Tens of thousands of government customers are using Amazon Business and our goal is to level the playing field for small businesses trying to reach new opportunities in the public sector.
BW: Anne, thank you for your time.