As many organizations look to establish or expand diversity, equity and inclusion (DEI) goals in 2021, procurement leaders should keep in mind that investing in DEI externally is just as important as internal diversity initiatives. Establishing a supplier diversity program can help ensure DEI efforts are felt outside the organization through investments in small and diverse businesses that align with company values.
Historically, small businesses have struggled to sell their products to large B2B buyers, often because they lack the resources to reach them. This challenge exists across industries, including the government sector, where 93% of small suppliers report experiencing significant barriers to participating in the procurement process.
Unfortunately, the COVID-19 pandemic has only exacerbated small business’ struggles. Some small businesses have suffered more than others: According to a Federal Reserve Bank of New York report, the number of active Black small business owners fell 41% between February and April (nearly twice the rate of non-Black-Owned businesses).
B2B buyers can help these businesses, all while meeting their own diversity goals. When a large B2B buyer deliberately seeks out alternative sourcing options from a diverse supplier, such as small, minority, woman, veteran, or LGBT-owned businesses, it can have a significant, positive impact on the growth and success of that diverse seller business. It can be difficult to find diverse sellers that offer the right products, and even more difficult to know that the source of the diversity certification is legitimate.
Amazon Business has tools and features designed to help our customers—from sole proprietors to enterprise organizations—achieve those goals. And it a win-win: Organizations can more seamlessly refocus spending to support small and diverse businesses while sellers gain large clients and achieve new growth.
By sourcing on Amazon Business, our customers can find and buy from nationally-recognized certifications, and track spend in support of small and diverse businesses. Now, it possible to set a Diversity Certifications Policy which allows the account administrator to select preferred suppliers that help meet these goals, and direct buyers to selected suppliers through the program. This allows the administrator to automate the direction of spend without manual oversight or the need to review each purchase to ensure compliance.
Sellers upload their certifications from a number of recognized agencies or third parties, such as the Small Business Administration (SBA), into their Amazon Business selling accounts. These sellers are then included and highlighted in filtered search results for buyers looking to support diverse businesses.
Organizations with DEI goals create buying policies for one or multiple diversity certifications that prioritize and highlight search results, significantly reducing the time to find these sellers. And through Amazon Business’ reporting mechanisms, customers get valuable data to measure the impact of spend. Ultimately, both the option to search for suppliers with certifications, and the ability to create buying policies to do so simplifies diversity spend and goal reporting.
These tools also enable organizations to better track progress toward mandated diversity requirements. Federal government entities, for example, are required to reserve at least 23% of their spending each year for underrepresented and small businesses. An established supplier diversity program can help maintain compliance and set more ambitious goals to earn a higher score on the SBA Annual Small Business Procurement Scorecard, which measures federal agencies’ success in meeting their overall small business contracting goals.
Most governments have similar standards and diverse spending requirements. For example, the City of Miami is one of several major municipalities in the US that works with Amazon Business to make it easy for City government organizations to search and purchase goods from local suppliers. Miami-based businesses appear in search results as approved to buy from in support of the buy local initiative, which has been prioritized as the local economy has faced challenges due to the COVID-19 pandemic.
“We’re thrilled to collaborate with Amazon Business to create a solution that will help our local and small business community find work opportunities with our City government,” said Miami Mayor Francis Suarez. “Now, more than ever, we need to be engaging and supporting our independent vendors and mom-and-pop businesses.”
“Cisco purpose is to power an inclusive future for all. That means everyone. By partnering with Amazon Business, we are able to provide more visibility to diverse-owned businesses, increasing their visibility, and ultimately their profits."
— Denise Lombard, Director of Responsible Procurement, Cisco Systems
Organizations across nearly every industry are ramping up their DEI efforts. To widen the search pool, organizations should leverage tools that make it easier to find and buy from small and diverse businesses. Amazon Business provides search and filter features that enable buyers to directly source and purchase inventory from independently verified small and diverse businesses.
Companies like Cisco Systems leverage this tool to support their DEI goals. “Cisco purpose is to power an inclusive future for all. That means everyone,” said Denise Lombard, Director of Responsible Procurement, Cisco Systems. “By partnering with Amazon Business, we are able to provide more visibility to diverse-owned businesses, increasing their visibility, and ultimately their profits.”
Likewise, when Johns Hopkins University (JHU) made the commitment to increase contracts with minority and women-owned businesses, they turned to Amazon Business. Now, JHU procurement team can filter search results by seller certifications to ensure they’re discovering and purchasing from businesses with a variety of different diversity credentials. Considering the university spends around $1 billion a year on procurement, its supplier diversity program makes a significant impact for the sellers whose businesses JHU supports.
Visit this page to learn more about Amazon Business’ Diversity Certifications and the Diversity Certifications Policy.
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