Supplier.io: Why Businesses are Switching to Small Suppliers

Supplier.io has released its 2025 Small Business Sourcing Report, detailing how executives around the world are stating competitive through diversifying their suppliers.

In a period of seemingly endless trade shifts and geopolitical tensions, companies are being forced to change how they manage risk and maintain resilient supply chains. 

Procurement teams are looking into onboarding resources and supplier diversity in order to increase business growth.

The survey

Supplier.io is a leader in supplier intelligence, helping companies around the world increase their operational resilience and mitigate risk. 

Using its comprehensive database, Supplier.io provides business with the analytics to make data-driven sourcing decisions in order to improve supply chain visibility and sustainable sourcing initiatives. 

Supplier.io's FY25 Q3 survey report looks at how large enterprises are turning to small businesses in order to build resilience and navigate disruption.

The report relies on the insights of more than 150 enterprise executives, including CEOs, CPOs and CFOs. 

Whilst many enterprises view small suppliers as the path to building resilience, many find it a challenge to scale their work with SMBs (small- and midsize-businesses).

Supplier.io examines these issues and works to find solutions to help bridge the gap between vision and execution, using its thorough database to find and vet new suppliers. 

Managing risk with small suppliers 

As global trade shifts and tariffs being painted as the biggest disruption to business, 91% of leaders claim they've already adjusted their small business sourcing or plan to do so.

Risk management solutions have shifted dramatically over the last year - where small suppliers were once seen as a bigger risk than large, well-known companies, they are now seen as the solution.

Small suppliers often have the flexibility to adapt faster to change with the ability to be more responsive to company demands. 

They can also provide more tailored solutions to business needs.

Unilever, one of Supplier.io's clients, relies on smallholder farmers for many of its key ingredients and has done for many years. 

The L'Occitane Group has put local suppliers and small businesses at the forefront of its sustainability campaign in recent years, guaranteeing traceability by supporting small suppliers.

Carmen West, Vice President at the U.S. Chamber of Commerce, says: “Small businesses are nimble. They often pivot faster than large companies and can provide tailored solutions that help organizations meet complex needs. Supporting them isn’t just the right thing to do, it’s smart business.” 

Enterprise benefits

Companies around the world have seen concrete results through partnering with small suppliers.

56% of survey respondents said they had noticeable improved performance or quality within their business.

53% cited greater supply chain resilience.

Moreover, business leaders claimed a 50% reduction in costs as a benefit from working with small suppliers.

CEO's are seeing the benefit of fast time-to-market, with 43% of business leaders citing this as a benefit to the introduction of small suppliers. 

Aramark is another business which trusts Supplier.io to help with its procurement processes, having seen results across its systems.

“[Small supplier] partnerships have not only driven results they’ve reshaped how we think about value and innovation in procurement," says Natily Santos, Vice President, Responsible Sourcing at Aramark. 

Barriers to supplier diversification

Although 96% of leaders said they would source from small suppliers, they also reported that finding, vetting and onboarding proved an issue.

Supplier.io found that companies, on average, allocate a mere 7% of their spend towards small suppliers, because they lack the infrastructure to securely onboard.

Procurement and sourcing management leaders saw executive hurdles as a main barrier to small suppliers, with 41% claiming onboarding complexity. 34% flagged a lack of risk data or reliable performance as a main issue - suggesting a need for higher transparency.

Onboarding, vetting and data gaps prove a consistent issue to progressing with small suppliers, especially as the trade volatility consistently shifts risk within supply chains. 

Until larger companies invest in databases to allow for a more streamlined vetting service, small businesses will be left out of the running and larger enterprises will not see the results of supplier diversification.

41% of enterprises say they experienced a failed partnership with a small supplier which was not properly vetted within the last 12 months.

66% of those said the biggest issue was financial loss, with 48% also citing delays to key project launches. 

Supplier.io's insights

By partnering with Supplier.io, companies can choose from more than 11 million suppliers within its database, all of which have been thoroughly vetted.

Using more than 450m supplier insights, including location, size and experience, businesses can easily engage with suppliers to check they're the right fit.

The consistent supply chain disruption in recent years has meant procurement teams need to work to diversify their spend, with small suppliers proving to be a strong factor to building business resilience.

If companies can invest in small supplier databases, vetting tools and smoother onboarding systems, they can improve their sourcing strategies to effectively trace supplier performance in real-time. 

Through investing in small suppliers, businesses can see company resilience and financial gain - particularly during times of volatility.