The process of forming a partnership with a new supplier can be time consuming. It’s also a decision that can have lasting consequences for the company and is therefore extremely important.
The B2B buying cycle has become much more complex in recent years. Whereas in the past, it would focus mainly on cost and location, now there are so many other factors to consider. Working with a supplier is no longer a simple business transaction, it’s now a partnership and therefore involves issues such as reputation, marketing, experience and long-term outlook.
With so many suppliers on the market, the task of evaluating them all can be arduous. This is particularly problematic if the requirement for a new supplier is time sensitive. It’s for this reason that many companies now choose to use the technique of shortlisting.
What is Shortlisting?
Shortlisting is the process of sifting through a number of proposals and identifying the suppliers which are most suitable for partnership.
The buyer will use evaluation criteria as a way of scoring each proposal and the highest scorers will move on to the shortlist. The evaluation criteria used will vary from buyer to buyer but they usually include factors such as cost, proof of skills, proof of experience, when they can start work and “nice to have” or preferred skills.
It’s often the case that buyers receive a large number of proposals which meet the minimum requirements and it’s at this point that preferred skills come in to play and can tip the balance.
Once on the shortlist, vendors will move on to the next stage where they will receive a more thorough evaluation before the buyer decides on the successful proposal.
What are the Benefits?
As already mentioned, shortlisting streamlines the B2B buying cycle. Instead of investing precious time, money and manpower in to evaluating a large pool of sellers- buyers can cut out the middle man and identify a small group of the most promising proposals.
As well as saving time and resources, shortlisting also allows buyers to find the best vendors for their specific requirements. Setting an evaluation criteria means that the eventual shortlist will include sellers that offer something meaningful to that particular buyer- as opposed to a more general, one-size-fits-all approach.
It’s worth noting that shortlisting isn’t ideal for everyone. For example, a company may only receive a small number of proposals and therefore it would make more sense to take all of those sellers to the final evaluation phase.
Once the buyer has compiled a shortlist, they send out notifications to successful and unsuccessful applicants. With unsuccessful proposals will usually receive a stock email that basically tells them they didn’t meet the requirements. It’s at the discretion of the company as to whether they provide further details and feedback.
Successful applicants are sent confirmation that they are on the shortlist and information on the next phase- including assessment requirements.