It is a known fact that buyers always want to source at the lowest possible price but the extent of pressure that they create on suppliers to toe their line was once again highlighted by two recent reports.
As per Better Buying Purchasing Practices Index (BBPPI) published recently, pressure created by buyers reportedly create impact on the suppliers’ quality, social, environmental, and other compliance performance while another global report underlined that suppliers cutting across geographical regions, including in Bangladesh, face mounting pressure from buyers due to their cost negotiation strategies.
Aimed at supporting the industry’s efforts to improve purchasing practices in supply chains globally, the Better Buying report that surveyed 319 suppliers in 38 countries including China, Bangladesh, India and Vietnam, and measured the performance of 67 retailers and brands, laid special emphasis on buyer’s so called practice of not paying for samples, besides the alleged custom of not paying the full price as indicated in purchase orders.
“Some 55.4 per cent of suppliers had been affected by high-pressure cost negotiation strategies,” the report underlined while maintaining that region-wise purchase practices differ significantly with buyers from North America more consistently and accurately forecasting the way orders are spread as compared to their European counterparts, which reportedly helps suppliers to plan productions accordingly.
“From these actionable insights, retailers and brands can work to streamline their operations, create stronger partnerships with suppliers and monitor their efforts over time,” maintained Better Buying co-founder Marsha Dickson.
The issue of free samples — the number of which can run into thousands leading to complex financial strains as producing these samples can carry costs 10 times the FOB — has been a major highlight of the BBPPI survey with 61.4 per cent respondents underlining that buyers did not pay for samples.
