As a business person, KH Friend is certainly familiar with the term vendor. Yes, in the increasingly fierce business competition, becoming a company vendor can be an interesting opportunity. By becoming a vendor, you have the opportunity to sell products or services to large companies, become their partner, and contribute to their growth and success. Especially with the development of technology and business complexity, many companies rely on external vendors to fulfill their needs. However, becoming an enterprise vendor is not an easy task. It involves thorough preparation, in-depth industry knowledge, and good marketing and relationship skills. Therefore, for KH Pals who are interested in becoming a corporate vendor, here we summarize the ways or steps you need to take to become a successful corporate vendor. Check out the article until the end!
What is a Vendor?
Before discussing further about the ways and requirements to become a company vendor, KH pals need to first understand what is meant by the vendor itself. According to Andy Shera in the book Step by Step Internet Marketing, a vendor is a party that makes products or services to be promoted by affiliates to the market. Where this affiliate is an intermediary who sells products or services from vendors directly to be sold to the market. While quoted from the understanding page according to experts, vendors are institutions or individuals or third parties that provide various materials, services, or products. The goal is to be processed or resold or needed by the company itself to improve the performance of a company. In other words, the existence of this vendor can help in terms of the procurement process of goods and services. The Government Procurement Policy Agency (LKPP) noted that the government procurement budget in 2019 amounted to Rp1,133 trillion or 52 percent of the APBN / APBD. This figure shows an increase in the last five years. This large value is one of the business opportunities that should not be missed.
Difference between Vendor and Reseller
Unlike resellers who only sell finished goods to consumers, vendors can sell various types of goods. Be it raw materials, auxiliary materials, spare parts, semi-finished goods, finished materials, or even services. Usually vendors who sell finished goods, work with resellers to trade their goods. Sellers who deal directly with consumers will contact vendors to deliver their goods to buyers, or to them. An easy example is online shops on Instagram. These online shops are resellers who sell their goods directly to consumers. Generally, when there is a request from a customer, the shop will contact the vendor to inquire about the stock of the item. If available, the store will ask the vendor to send it to them or to consumers directly. But generally, vendors do not want to send goods in small quantities. Therefore, the store will usually take stock from vendors in large quantities. This is where the vendor’s profit comes from. When you successfully work with more than one reseller, you will continue to get large orders.
Legal Basis for Vendors in Indonesia
For KH friends who want to become one of the vendors of goods and services procurement for the company, there are several policies that must be considered. This policy was issued to adjust to the times. Presidential Regulation (Perpres) No. 16 of 2018 concerning Government Procurement of Goods / Services that answers the challenges in the procurement of goods / services. This is because currently the value of goods / services procurement is increasingly complex and the business environment continues to grow. Perpres No. 16/2018 has regulated the existence of individual procurement agents, business entities, or Goods / Services Procurement Work Units (ULPs) that will carry out part or all of the goods / services procurement process entrusted by ministries, institutions, or governments.
How to Become an Enterprise Vendor?
A company usually has provisions in choosing one or more vendors. This is done so that efforts to procure goods and services with vendors can run effectively and efficiently. Reporting from the book “Management of Procurement of Goods and Services” by Hertin Indira Utojo, here are some requirements or ways to become a company vendor:
Creating a Business Entity
If you want to be part of the procurement of goods and services as a company vendor, you can start by creating a business entity first. You can choose the form of business entity according to your needs, whether it is a legal entity or an unincorporated business entity such as CV, civil partnership, and firm. This is because in Presidential Regulation No. 16/2018, there are no provisions stipulating that vendor business entities must be incorporated. However, the regulation has regulated the role of SMEs for the procurement of goods and services, where the maximum package value for this business is IDR 2.5 billion. Given these limitations, it is better if KH Friend really wants to create a business engaged in the procurement of goods / services, try to start creating a business entity incorporated as PT.
Pay attention to the required legality
In connection with the creation of a PT for the procurement of goods and services, the establishment and licensing process should be anticipated in such a way. Perpres No. 16/2018 states that the procurement of goods and services regulated includes the procurement of goods, construction work, consulting services, and other services. Now, it is important for KH pals to find out what legalities are needed to be registered as a provider of goods and services. If the required license is a Trading Business License (SIUP), then the first thing to ensure is the classification of the SIUP needed, whether it is a small, medium or large SIUP. If it is not a SIUP, then you have to find out what legality is required. For example, if you want to become a catering vendor, the license required may be a Tourism Business Registration Certificate (TDUP) for Catering Services. In addition, other legal documents that need to be prepared are the Business Entity NPWP, and Company Registration Certificate (TDP).
Passed due diligence
Due diligence is a site visit to the vendor’s office, workshop and warehouse. Due diligence is conducted on an unannounced basis without notifying the vendor in advance before the transaction takes place. It aims to ensure that the vendor meets the requirements to become a vendor of a company. Due diligence activities carried out include:
- Ensure that goods or services supplied by vendors meet the requirements of Quality, Cost, Delivery, Safety, and Morale (QCDSM).
- Ensure the completeness and validity of legality documents are adjusted to the original documents.
- Ensure vendors are orderly in carrying out tax administration for taxes collected.
- Communicate applicable company policies and procedures that vendors must know and comply with.
Offer Valuable Solutions
When you enter the bidding process to become a vendor for a company, it is important to highlight the added value you can provide. You need to identify the problem or need that the company is facing and show how your product or service can solve it. Also, provide concrete evidence of your success with other clients and the extent to which you can improve efficiency and reduce costs for the company. Also, make sure that your vendor has a good system to manage the quality of your product or service.
Develop Networks and Relationships
One of the essentials of being an enterprise vendor is building a strong network and mutually beneficial relationships. Attend relevant industry events, seminars and conferences to meet with company leaders and decision-making authorities. Establish relationships with industry stakeholders, including potential clients, business partners and relevant industry associations. You can also use social media and online business platforms to connect with people who can help you expand your network. That way, you can get business opportunities and build a good reputation. In addition, establishing a good relationship with the company you are targeting can also help you get strong recommendations.
Build a Good Reputation
In the business world, reputation is everything. Make sure you provide quality service, on time, and meet client expectations. Provide good customer service, be responsive to problems, and strive to improve and refine processes continuously. By having a good reputation, you will get more business opportunities in the future. Don’t forget to maintain a good relationship with the company’s clients by communicating regularly, and don’t hesitate to ask for their input and feedback. This will help you understand their needs and expectations more deeply, so you can improve the products or services offered.
KH Contact
This is an explanation of the requirements and ways to become a vendor for the procurement of goods or services for companies. Of course, to become and register a vendor to a large company is not easy, because it requires a process, strategy, and legality of our own business entity.
READ ALSO: Know What is E-Procurement and Its Benefits for Businesses
Well, for KH pals who are still confused about vendors and the requirements needed, you can take advantage of Kontrak Hukum as one of the digital legal platforms that can help you take care of all the legality documents needed by business entities. In addition, we can also help you fulfill all business agreements needed between vendors and companies. So what are you waiting for? Protect and grow your business with Kontrak Hukum by visiting the KH Services – Starting a Business page. If you have questions about business and other cooperation, don’t hesitate to consult with us for free at Tanya KH or via direct message (DM) to Instagram @kontrakhukum.
