After a spring and summer of unprecedented challenges, millions of businesses are gearing up to have what they hope will be a bounce-back year in 2021.
One area where leaders have had to be especially innovative is purchasing. Entrepreneurs have faced uncertain demand, supplier shortages, and retail closures that have upended traditional ways of buying.
"Since none of us know for certain the long-term effects of the pandemic, the ability to stay agile when it comes to purchasing will no doubt play an important role in businesses' ability to grow in the new year," explains Chris Caruso, business technology leader at Amazon Business.
Leaders are adapting in the short term and preparing for growth in 2021 by turning to digital technologies that simplify purchasing, help reduce costs, and empower employees to get what they need faster.
Simplify Purchasing to Save Time.
Traditionally, purchasing is a time-consuming process for small business owners, who already have a lot on their plates. "We often see owners or their staff spending hours a week taking trips to the store, managing inventory, reordering, and processing invoices for multiple suppliers. That's time they need to be spending on more valuable activities, especially now," says Fernando Ramirez, an Amazon Business small business leader.
Michael Calhoun, the owner of Red River Brewing in Red River, New Mexico, operates a few hours from the nearest major city, so getting supplies for his restaurant and brewery can be prohibitively time consuming. Calhoun relies on digital technology available through Amazon Business to simplify his purchasing process.
Amazon Business is a digital purchasing solution that helps businesses save time by consolidating suppliers. It brings together hundreds of thousands of sellers with business-relevant products. Buyers get the familiar shopping experience and fast delivery they expect from Amazon, plus tools to streamline purchasing. On Amazon Business, Red River Brewing has consolidated purchases across 17 major categories, such as office and IT supplies, point of sale, shelf-stable goods, and even brewing system supplies.
"What we like most about Amazon Business is the ability to find almost everything we need to run this company, in one place," says Calhoun.
In addition to creating efficiencies by consolidating suppliers, digital purchasing solutions can simplify reordering so that business buyers spend less time managing inventory. For example, Amazon Business Supply Room lets management and staff virtually check their inventory, reorder from lists of commonly purchased products, and set up Recurring Delivery to have products automatically shipped--all from a mobile device, without stepping foot in their actual supply room.
Calhoun explains, "I just keep a list of my commonly purchased items, and in a push of a button anywhere on site, I'm restocked in two days, without spending hours leafing through catalogs, or worse, driving to and from Albuquerque."
Diane Nesom, office manager at biotech startup Synthego, is saving time across multiple locations. "[It's] been a game changer for checking and ordering inventory across the five locations that I manage," she says. "What previously took about an hour per location has been reduced by at least 50 percent."
Reduce Costs to Fund New Ways of Doing Business.
In its July 2020 Small Business Coronavirus Impact Poll, the U.S. Chamber of Commerce reported that 55 percent of small businesses felt comfortable with their cash flow. Prior to the pandemic, this number was consistently above 80 percent.
At the same time, the poll found that 35 percent of small businesses have plans to increase investments in the coming year, up 8 percent from late May. Whether businesses are looking for ways to increase cash flow, fund new investments, or both, digital purchasing solutions are helping to make it possible.
Because they bring together multiple suppliers in one place, online stores let buyers easily compare and choose the best price. A lot of small businesses that were already shopping on Amazon have found that a dedicated store for their business gives them more ways to increase cash flow with access to business-only pricing, quantity discounts, and flexible payment options like Pay by Invoice that offers extended terms for Business Prime members.
Even larger companies, like Cortland, a community management firm that oversees apartment communities throughout the U.S., are finding measurable savings that translate to increased cash flow. Lauren Brown, a Cortland Community Manager in Dallas, saved on light bulbs and empowered her staff: "Our service manager was able to find the right parts on Amazon Business and change the locks himself, which saves us nearly $1,000 per instance." And Scott Purcell, a community manager in Atlanta notes, "We've even seen a 50 percent cost savings with water filters."
"For months, most businesses have prioritized reducing costs in order to maintain continuity through the crisis," says Ramirez. "Now, they have to look ahead and invest for the future. That's going to play out differently for every business, but it's all going to require capital."
Empower Employees to Get What They Need Faster.
The shift to remote work has caused many employers to see an increase in irregular and unpredictable spending. With some companies now telling employees to stay home until at least January, business owners need to find the right balance between freedom and control when it comes to purchasing.
Staying agile requires that leaders give their teams the freedom to get what they need quickly. An important part of that is providing a purchasing experience that works for them. Research shows that 69 percent of business buyers expect an "Amazon-like" buying experience.
Bill Miller, associate program manager for global human resources at TaylorMade Golf Company says, "Amazon Business provides end-users a high-quality digital experience--getting exactly what they want, when they want it, with on-time delivery in a familiar household fashion."
Though leaders want to give their teams the freedom to buy what they need, it can be hard to let go because they don't want to see spending spiral out of control. Purchasing autonomy becomes possible when management has visibility.
As technology moves to the cloud, powerful data analytics and visualization software has become accessible for businesses of all sizes. Analytic software can now be built directly into purchasing tools to give management visibility into purchases made by their teams. For example, Amazon Business Analytics automatically compiles spend reports and streamlines reconciliation. For Business Prime members, Spend Visibility can identify trends to help management identify ways to cut costs.
Heather Jones, executive director of the nonprofit Toys for Kids notes, "Having built-in tools like Spend Visibility gives us a clear picture of the entire organization. I'm able to easily spot trends to plan for next year."
While there's still a lot of uncertainty ahead, Caruso is optimistic that the majority of small businesses will thrive. "Over the next few months, the businesses that implement technology that simplifies the way they work and empowers employees for the long run will have a better chance for growth in 2021."