This article is the first in a three-part series on the benefits of getting your company on preferred supplier lists (PSLs). We explain why it’s an important avenue to explore to expand your customer base, then we delve into what research you need to do before you get started and step-by-step how to do it.
Below you will learn:
Why You Need to Get on a Preferred Supplier List
One way to find new customers is to position your business to be on a preferred supplier list (PSL). Many large companies and governments maintain lists of pre-qualified “preferred vendors.” Being on a PSL enables you to enter new markets, increase sales and pursue opportunities you might not otherwise have access to.
Who uses a preferred supplier list?
Prime contractors (often called “primes”) are major businesses that use subcontractors to help them meet the needs of their customers. Some are large manufacturers that market a wide range of products that obtain components for these products from smaller, more specialized businesses. Others are companies that deliver projects for clients such as governments and banks. These primes also use subcontractors to supply the goods and services required to carry out their projects.
Get the most benefits of being a preferred supplier by learning how to select the best suppliers (primes) for your company, and convince them to choose you.
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Purpose of a preferred supplier list
Maintaining PSLs is an efficient way for primes to save time and effort of putting out a tender or qualifying a new supplier whenever they have a need. They can simply rely on companies that are already on their preferred list. When these primes do put out a tender, it is often not open to suppliers that aren’t already on the PSL.
Benefits of being a preferred supplier
If you’re an exporter, getting onto a PSL can be a goal worth pursuing for many reasons:
- It allows an international buyer to better understand your company’s value proposition and reach out to you when they’re looking for a product or solution.
- It can bolster your credibility and help you land contracts with other buyers.
- Competitors are applying to become preferred suppliers, so following suit can help keep your company competitive.
Getting on a PSL means that a prime will look to you whenever it needs your type of product or service. And depending on its projects, it may need a lot of whatever you’re selling. By building your reputation with a large corporation or government, you can increase your credibility with potential customers at home and abroad.
The question is how to qualify for the list. Doing your research on which PSL opportunities are best suited for your business is the first step.
Read our tip sheet on what research you need to do, so you can select the right buyer for your business.