Corporate Contracting Guide

Do you dream of contracting with big corporations like Delta, Verizon Wireless or Hilton? Thanks to corporate supplier programs, you can. The process will likely be long and will take preparation and dedication, but the result could mean a huge contract for your business. If you’ve been dreaming of growing your business with a corporate contract, today could be the perfect day to get started. The information below can help you understand what a corporate contract is, how you can take your first steps toward one, what to keep in mind when negotiating, and some of the things you’ll need to do or consider before registering with specific corporation’s supplier portals.

What is a Corporate Supplier Contract?

A corporate contract is an agreement between a supplier, manufacturer, or other contractor (you) and a corporation. As its partner, you must meet the demands and expectations of the corporation, and in return you are compensated for your goods or services. Corporate supplier contracts can help grow your business and, depending on your business, help you land big-box retailer contracts in the future. (Big-box retailers, like Walmart, like to see that their suppliers have other contracts that will help keep the company in business.) Learn how to get started as a corporate supplier below.

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Getting Started as a Corporate Supplier

Before trying to get any type of contract, you’ll want to take a few key steps. First, you should do your research. Next, consider getting certified. Finally, start building and monitoring your business credit file.

1. Do Your Research

It’s crucial that you research the companies you are trying to get supplier contracts with, because if you can’t clearly convey how your business can help the corporation and why it’s the best choice for a particular contract, you’re not very likely to win a bid. Without knowing the core functions of the corporation, its business model, values and needs, it will difficult to sell yourself as the best choice. Research each company you want to contract with, including its requirements for suppliers, and assess whether your business is a good fit before you spend precious time applying.

2. Getting Certified

Many corporations have supplier programs and aim to fill a certain percentage of their supply chain with diverse suppliers. A diverse supplier is usually a veteran-ownedwomen-owned or minority-owned business, but others types of diverse suppliers can qualify as well. To ensure that the contracts are going to diverse suppliers, corporations often require businesses to be certified by third-party organizations when applying for supplier diversity contracts. Use the links below to start learning more about certification for your business.

3. Building and Monitoring Business Credit

Just as you are doing your research on the corporations you want to contract with, corporations are likely doing their research on you. Some corporations may require that you have a D&B D-U-N-S® Number for your business, or that you meet certain business credit requirements before they will bring you into their supply chain. They may also monitor your business credit file while they are working with you to make sure your scores and ratings don’t drop below their standards or that your business won’t put their processes at risk. If you don’t have a D-U-N-S Number, you can get one for free, and you should consider building your business credit file with CreditBuilder™. By actively building your business credit, you can help impact your scores and ratings, which may help you get contracts.

Negotiating a Contract

If you’re a small business negotiating a contract with a large corporation, you may not have much leverage. Large corporations have their pick of suppliers, and while they may have selected you as the best choice, that doesn’t mean they don’t have backups. If you make big mistakes in contract negotiations, you may miss your chance to work with a large company. Keep these tips in mind while negotiating, and always have a lawyer look at your contracts.

Know Your Deal Breakers

Going into negotiations, you should already have calculated the lowest price you can offer to still make a profit and have determined any other terms (like shipping) that you absolutely can’t budge on. When negotiations start, stand by your “deal breakers” so you can walk away feeling confident in your contract. If a lawyer is negotiating for you, make sure you brief them on your demands so they know what terms you won’t accept.

Decide What You’re Willing to Compromise On

It’s unlikely that you won’t have to compromise on any of the terms in your contract. While you may have a few terms you are unable to budge on, there should be terms you are willing to adjust. By compromising on lower priority terms, you may be able to get the prices or deadlines you really want. Keep in mind; you want to make sure you’re helping the corporation as much as it is helping you, so both parties can benefit from the relationship.

Leverage Your References

If someone referred you to his/her company’s supplier program, he/she obviously thought you were a good fit for the corporation, which means he/she is invested in your business joining the supply chain. Stay in contact with your references, who may be able to lobby for your terms with their colleagues.

Corporate Supplier Program Insights

A corporate contract is an agreement between a supplier, manufacturer, or other contractor (you) and a corporation. As its partner, you must meet the demands and expectations of the corporation, and in return you are compensated for your goods or services. Corporate supplier contracts can help grow your business and, depending on your business, help you land big-box retailer contracts in the future. (Big-box retailers, like Walmart, like to see that their suppliers have other contracts that will help keep the company in business.) Learn how to get started as a corporate supplier below.

Verizon Wireless

Verizon wireless has a four step supplier diversity process. Learn more about each step below.

Steps:

  1. Visit the Verizon Supplier Diversity website
  2. Familiarize yourself with Verizon’s product and service offerings
  3. Get certified though a Verizon authorized third-party diverse organization
  4. Learn about Verizon’s Supplier Requirements & Tier 2 Strategy

Verizon Requirements

  • Meet definition: A diverse supplier is a business that is at least 51 percent owned and operated by minorities, women, or service-disabled veterans.
  • Prove financial stability: All suppliers must be financially sound and creditworthy.
  • Demonstrate continuous improvement: Suppliers may be required to fully demonstrate their processes as well as continuous improvement of those processes and/or performance of their products and services.
  • Be an established business: Suppliers must be able to provide a legal company name and should be in business for a minimum of three years. Suppliers must be able to demonstrate revenue for this period.
  • Submit federal taxpayer ID: Suppliers must be able to provide a federal taxpayer ID. Provide references Suppliers may be required to provide references of satisfied past and current customers.
  • Meet insurance & bonding requirements: Suppliers must provide Commercial General Liability Insurance, Commercial Automobile Liability, Workers’ Compensation, Employer’s Liability and Professional Liability. Additional Umbrella/Excess Liability insurance may also be required. Suppliers must be able to obtain bonding when required.
  • Conduct background checks: A supplier must certify to Verizon that it has conducted (or used an agency to conduct)  criminal history checking, drug testing, and verification of education, employment history, social security number and legal right to work for all employees and contract personnel.
  • Implement quality processes: Suppliers may need to establish and implement an effective Quality Management System (QMS) with defined processes and operating procedures that measure continuous improvements.
  • Provide third-party certification: If registering as a minority, woman or service- disabled veteran owned business you must provide certification documentation through a third-party certification organization recognized by Verizon.

Verizon’s Tier 2 Strategy

Verizon implements a Tier 2 Strategy to continue their dedication to hiring diverse suppliers. Essentially, Verizon encourages its suppliers to pay it forward, and hire their own diverse suppliers or subcontractors, to mentor other diverse suppliers, and to help Verizon host events for diverse suppliers. If registering for the Tier 2 strategy, suppliers should expect to:

  • Actively including qualified diverse suppliers as subcontractors/Tier Two vendors in Verizon procurements
  • Ensure that those diverse suppliers are certified through a Verizon authorized third-party diverse certification agency
  • Mentor diverse suppliers
  • Partner with Verizon to host diverse supplier opportunity seminars
  • Submitting a prime supplier (Tier Two) report on a quarterly basis through our supplier portal.

Learn more about Verizon’s supplier diversity requirements and application process.

Third-party certification

If registering as a minority, woman or service-disabled veteran-owned business you must provide certification documentation through a third-party certification organization or office recognized by Verizon. These are:

Suppliers who are already third-party certified as a minority, woman, veteran or service-disabled business can register immediately. Please read Verizon’s supplier terms and conditions and FAQs for detailed information. Verizon disclaimer: Supplier database registration does not guarantee business opportunities and does not result in an “approved” supplier status.

Delta Airlines

Suppliers must meet the following criteria:

  • Understand Delta’s business
  • Assume total cost of ownership
  • Provide a clear “Value-add” by becoming a supplier
  • Be in good financial standing
  • Have references and a proven track record
  • Able to grow with Delta
  • Have a core competency in the supplier’s line of business

More information on Delta’s supplier program.

Hilton Supply Management

ThermoFisher Scientific

Thermo Fisher Scientific is an American multinational, biotechnology product development company.

Required supplier certifications:

Learn more about ThermoFisher Scientific’s supplier program.

Denny’s

Before applying to be a supplier with Denny’s:

  • Do your homework on the brand
    • Be an expert on your product and services
  • Show ability to meet needs
    • Competitive pricing
    • Sell yourself
    • Make a good first impression
    • Be persistent, but patient
  • Understand your business
    • How can you benefit the company?
  • Provide historical business performance
    • Annual sales dollars
    • Production volume
    • Capacity utilization
    • Past and current customers

More information on Denny’s supplier program.

P&G

P&G is a multinational manufacturer of product ranges including family, personal and household care products.

Suppliers for P&G must be certified by either the NMSDC or the WBENC.

More information on P&G’s supplier program.

Dell

We also talked with Dell about breaking into their global supply chain. Watch the webinar below for even more insights.

Amgen

Jinus Moghbeli, Supplier Diversity Liaison Officer at Amgen, joined us for webinar on supplier diversity. Read the recap to learn how your business may be able to work with Amgen.

To get started as a corporate supplier, check out this list of corporations with supplier programs.

Photo Credit: jeinhard,Twenty20