Growing trade networks from 10 vendors to 100 vendors or more

by | May 18, 2017

Onboarding large numbers of new vendors can be challenging for small retailers, especially if they have to scale quickly. When your vendor relationships go from a handful to a whole web of vendors, a spreadsheet isn’t going to hack it. Without a good EDI and analytics solution, it’s impossible to efficiently and effectively manage the information you need from all of your trading partners and vendors. Not only will a good EDI and analytics solution keep your business running smoothly, you can identify issues, show new opportunities and spot trouble areas all with the right kind of data analysis and network support.

Adding new vendors

When retailers first start out, they do a lot of networking and product sourcing by hand, transferring data and paperwork by fax and email, and entering orders and invoices manually. There’s a lot of maintenance and management overhead costs that crop up in terms of staffing, but there are also cost and licensing components, based on the communication systems you’re using, if you’re trying to do these things on your own.

Additionally, it’s much harder to keep track of all the documentation to and from 100 vendors than it is from only 10. A good EDI and analytics system can alert you to missing shipments, short shipments and even late shipments – a feat that would be much harder without automation and electronic communications. Knowing where shipments are, where they’re coming from, where they’re going to, helps you to meet customer demands and make adjustments when a supplier or shipping method is consistently not working out.

Solution for managing vendor communities

If you’re trying to develop an endless aisle and you’re not using some sort of technology to manage, scale, and leverage that network, you’ll bump up against the end of that aisle every day.

With a system like SPS Commerce’s Retailer Community, you’re able to use our sourcing service to find new vendors, onboard them in a matter of hours and days, not weeks and months. You’re able to download the item data and product collateral like photos and videos with ease. With each new vendor you’re able to onboard with the items that you need, that endless aisle you’re striving for gets longer and longer.

Importantly, you can process orders and share inventory information with our EDI solution without manual input, which can save time money, and energy, but lets you handle increased traffic as your number of vendors increases.

Transparency into your inventory system

As you grow, your problems will grow, and your ability to solve those problems easily will suffer if you can’t keep up with the demands. So why not put more effort into collaboration with your vendors? Teamwork with your trading partners can lighten the load and make it easier to satisfy consumer demands as your company grows.

Transparency into order status – from warehouse deliveries to drop shipments – can be a big issue between retailers and vendors. Retailers can use EDI to their benefit, as the documents and the systems are automated, you can get visibility into how transactions are going.

I know we typically say that we shouldn’t use anecdotal evidence, but this one is OK because it proves a point about data. A supplier’s products sold out completely in one store, but there were zero sales in another store that was within the same region. With a little research, this supplier found the store with no sales didn’t actually have their product on the shelves yet, which meant everyone was losing money. We are able to help avoid a loss in revenue like this with our analytics solutions.

As you grow, you’ll come to appreciate the vendor relationships that make your life easier, and make you more money for both of you. With transparency, the suppliers can help you figure out how to drive more revenue. The more suppliers you have, the more products you have, and the more data you can make sense of.

One thing we have learned over the years is that mid-sized retailers (even some smaller retailers) can’t turn the corner on growth without a retail platform and network. We’ve seen retailers try to build their own platform, but that’s an extremely expensive option – especially when there are proven solutions already available. Retailers who want to turn that corner on growth, to grow from 10 vendors to 100 new vendors, need to consider a retail platform that allows for EDI sharing, sourcing, and analytics.

To learn more about finding new vendors, our retail network and our retail supply chain solutions, please contact one of our retail supply chain experts.

Rob Davis

Senior Director of Product Management at SPS Commerce
As senior director of product management for SPS Commerce, Rob is responsible for managing the company’s cloud based Analytics product line including product requirements, roadmap, marketing and GTM activities. Before joining SPS Commerce in 2014, Rob was the director of business intelligence product management at Oracle. He has also held positions with Siebel Systems, AT&T Worldnet and internet startup Quixi. Rob has a bachelor of science degree from the University of Rhode Island.
Rob Davis


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