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Selling to large companies

Many small businesses would love to sell to large companies - and most large companies would like to support small business. So why doesn't it happen more often?

Selling to large companies involves two steps: paperwork and marketing, and both take time. Large companies usually have approved vendor lists, which means small businesses must contact their procurement offices, obtain the required paperwork, complete and return it.

To complete the paperwork a small business will often need to provide a DUNS number, which you can obtain for free at https://iupdate.dnb.com/iUpdate/companylookup.htm. This will be the number that businesses will use to report credit history with your business. You will also probably need to provide your SIC (standard industrial code) so that they can put your business in the right part of their database. You can find your SIC code at http://www.osha.gov/pls/imis/sicsearch.html If you have multiple products or services, you can have multiple SIC codes.

The large company may also require you to have EDI. This is electronic data interface, which basically allows them to submit purchase orders electronically. You obtain EDI through a private EDI provider. This provider will send you the purchase orders via fax or email. Usually if a company uses EDI for purchase orders, they will also require you to submit invoices through your EDI provider also.

Finally, some large companies have programs for small businesses, so be sure to ask. These programs do not guarantee you business, but they may have benefits such as a faster turnaround for invoices and priority on approved vendor lists.

Once you are done with the paperwork, the marketing stage begins. You need to let people within the company know that you are on their approved vendor list. Sometimes the company will have a small business procurement specialist to help you identify the departments to contact. If not, research on the internet, talk with employees and talk with other providers to find out the best way to market your product.

There are downsides to selling to large companies

  • Long length of the sales process. Large companies have procedures and usually are in no hurry to make decisions or changes. They are on salary and view time differently than a business owner.
  • Payment cycle. Some large companies may use their size to stretch out payment times. Be sure to put incentives for fast payment or penalties for slow payment.
  • Different priorities of decision makers. The decision makers have to deal with internal politics, which may distort decisions.

In a nutshell when you sell to large companies: patience, persistence, good research, and proper paperwork will pay off.