Following the results of a new survey, Axis Telecoms learned that the Federation of Small Businesses (FSB) has raised concerns over the supply chain bullying of some SMEs in the UK.
The Reality for Small Businesses
You don’t build a reputation for outstanding customer service as a supplier of energy and telecoms to small businesses in the UK, like Axis Telecoms, without learning about the reality many SMEs face.
Many SMEs rely on their role as a supplier to larger companies to generate capital. The profitability of this role has been brought into question by a new survey which highlights the culture of ‘supply chain bullying’ facing many SMEs in the modern marketplace.
Supply Chain Bullying Beyond ‘Pay to Stay’
Smallbusiness.co.uk reported that a new survey of 2,500 FSB members showed that almost one in five (17%) has faced ‘supply chain bullying’ from a company they supply in the past two years.
These results caused FSB to raise concerns suggesting that there is a serious breakdown of payment practises in the supply chain. Results show that problems go beyond the typical pay to stay issue – where a larger company asks a supplier to stay to keep their business – faced by a fair share of small businesses.
“No Longer Prepared to put up with These Sharp Practices”
Other issues highlighted in the poll by SMEs include prompt payment discounts (where larger companies offer themselves a discount for paying on time). Further issues faced by small businesses in the supply chain include larger firm setting excessively long terms of payment, and exceeding agreements over payment times.
According to the chairman of FSB, John Allan, these issues are pushing SMEs to breaking point. Allan argued: “The sense I get from talking to our members is that small businesses are fast approaching the breaking point. They are no longer prepared to put up with these sharp practices. Brands that think they can continue to squeeze their suppliers with impunity may get a nasty shock when what they are doing comes to the attention of their consumers.”
Take Steps to Protect Your Small Business.
If SMEs who work in the supply chain allow themselves to be subjected to practises such as pay to stay, they deprive themselves of vital capital. Ultimately, allowing big business to indulge in supply chain bullying will prove costly, which is why any SME faced with this problem must take steps to protect themselves from supply chain bullying.