Diverse supplier means a business enterprise that: Operates its principal place of business in the United States; Is at least 51% owned and controlled by a minority, woman, or veteran’s group; Provides goods or services.
It is essential to have diverse suppliers in your organization’s supply chain to better understand the culture and heritage of your customers. As such, each supplier must provide their Diverse Supplier certification to confirm they are a diverse supplier as part of the process with our purchase order. It is important you validate this information for any new or existing supplier.
The benefits of having diverse suppliers in your supply chain are clear. First and foremost, you will be better able to serve the specific needs of your customers by purchasing an array of products from businesses representing various cultural or ethnic backgrounds.
Market data indicates that companies with diverse supplier bases have higher sales revenues than their competitors without a diverse supplier base. Additionally, profitable and efficient firms tend to have greater numbers of small disadvantaged business enterprise (SDBE) suppliers than do weak firms. Small disadvantaged businesses often provide firms with specialized product technologies as well as alternative sources for purchases where supplies may be limited or obsolete.
When making purchasing decisions, diversifying your supply chain can save money for your organization in the long run through:
Savings on inventory costs – Diverse suppliers can provide the right product at a lower price and much faster than your current suppliers
Customer service – Diverse suppliers can more easily identify needs and help solve customer requests that are unique to diverse communities.
Tax benefits – Suppliers certified as SDBEs are eligible for tax savings of 9% through S Corporation status, an 11% deduction on business income, or the new Temporary Small Business Rate (TSBR) which is a flat 0.5%. By purchasing from diverse businesses, your company may be eligible to claim additional tax credits which enhance your bottom line.