Why You Need to Hire a VP of Supplier Enablement

Graphic of a VP of Supplier Enablement analyzing their KPIs.
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Graphic of a VP of Supplier Enablement analyzing their KPIs.

Ecommerce and dropship teams tend to lack focus on a key success factor: supplier enablement, and the experience that suppliers have when working with them. The focus is on ecommerce revenue, margins, end-customer discoverability and the web frontend experience. 

Much less focus is placed on how well suppliers are being onboarded and the experience they have in the process of onboarding. This leads to slower overall supplier throughput, which in turn affects the experience customers have. This article covers why we think having a single VP responsible for all supplier enablement is important and helps you win as a modern retailer. 

Supplier enablement: a quick primer

Supplier enablement is all of the activities, tools, processes and contact points that a retailer has with your suppliers. It is the program that represents all things suppliers.

We believe the goal should be to provide a great experience for suppliers which will in turn lead to getting the right suppliers for your customer. We’ve heard it said, and strongly believe ourselves, that suppliers are your first customer. As a retailer, without them, you would not be able to exist or thrive. As a retailer, a great supplier experience is key to thriving in a world dominated by a small number of monopolistic marketplace competitors. 

If you want to learn more about the benefits of supplier enablement and how it contributes to growing your GMV and improving your margins, check out this report from industry expert Rick Watson we published in February. 

The role: VP of Supplier Enablement

A VP of Supplier Enablement is a single person responsible for the supplier enablement program. We believe it is best done as a program management role, which means the impact would span multiple functions and teams with a convergent goal of enabling suppliers. The more the experience suppliers have can be centralized into a single person, the easier it will be to improve the experience suppliers have and accelerate the throughput of onboarding.

Supplier enablement is a horizontal function, meaning it matrices into other important functions in the business, including IT, merchandising, ecommerce and operations. It needs to have the authority to act in ways that benefit suppliers across teams. 

Why this role: 2022 and beyond

Over time, retailers have accumulated an increasingly complex and varied number of ways of engaging with suppliers. We call these supply models, and they include dropship, wholesale, consignment, marketplace, liquidation and more. 

The more supply models you have, the less coherent it is for suppliers how they should engage with you to be successful themselves. Giving suppliers a clear path to a fruitful partnership is a critical element to maintaining their ongoing buy-in and excitement to be partnered with you.

Retailers will often layer a new supply model on to existing ones, and handle it like its own program in parallel. This can be beneficial in the short term to launch the program faster, but it almost always ends up contributing to a significantly worse supplier experience. Suppliers should not have to onboard multiple times to the same retail partner over time. 

As time goes on, we expect that retailers will pursue increasingly unique and novel ways of engaging with both customers and suppliers. Retailers cannot enable novel customer experiences without also needing to engage with suppliers in new ways. 

If you have to rebuild your entire supplier-facing tech stack every time you are engaging with suppliers in a new way, and go back and onboard all your suppliers again, you’re making the wrong choice in your approach to tech. Suppliers should have a single way to onboard all supply models, which enables retailers to innovate and suppliers to thrive as partners.

Retailers cannot enable novel customer experiences without also needing to engage with suppliers in new ways. 

The VP of Supplier Enablement job description

The VP of Supplier Enablement is ideally a program management role with responsibility and control over how a retailer engages with suppliers. The deliverables can be evaluated a few ways, but it comes down to minimizing the time for suppliers to onboard, maximizing their experience, maximizing the margins and minimizing the effort of trading on an ongoing basis. 

Job duties should include:

  • Owns supplier onboarding time and the associated tools, people and processes
  • Owns supplier experience including account management and renewals/churn
  • Owns managing and reducing the ops burden per unit of value (margin dollar)
  • Influence margin dollars being retained based on supplier margin and model
  • Responsible for the teams, tools, processes and incentives that influence suppliers

At Convictional, we like to think about roles and functions as having a single, clear mission. The single clear mission for the VP of Supplier Enablement is something like ‘find and onboard the right suppliers for your customer, leading to mutual, durable and ongoing success’. Success in retail is measured in margin dollars, so both sides should be feeling the benefit of the program. 

Role key performance indicators

The VP of Supplier Enablement is a measurable role based on the criteria of ownership and influence above. We can turn that mandate into a consistent set of key performance indicators that can be used to evaluate the impact and benefit of the work of the person in this role:

  1. Revenue per supply model (e.g. dropship, wholesale, marketplace)
  2. Number of suppliers and SKUs onboarded per period
  3. Margin dollars retained after supply model maintenance costs
  4. Time to onboard and time to value (e.g. first order) for suppliers
  5. Supplier experience and self serve status of onboarding

Convictional exists to make it possible to centralize insights like the ones discussed here and evaluate the success and impact of supplier enablement programs. We believe strongly the future of retail is about providing an excellent, consistent, singular way for suppliers to engage with you. This will make more customer-facing innovation possible now and in the future.

If you're looking to operationalize your supplier enablement efforts, we're here to help! Contact us today to get started with Convictional.

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