Paying to be a supplier

[fatandwheezing]

Hello,

Over the years I have worked in sales, we seem to be getting more companies coming up with "supplier portal" type systems, where everything is managed online. Recently one of our long term customers has been taken over, and we now have a requirement to register as a "Gold" supplier, which will cost us £1,200 per year.

is this becoming some kind of standard? It seems a pretty unpleasant way of working. All it means is that their quote will be going up to cover this.

[BobSaunders]

Standard practice in bigger enterprise organisations IMHO.

Also a way to justify procurement, or at least in part pay for it by moving a zero on a spreadsheet. Of course it is known that you will recoup the cost through increased costs.

[Eddie Strohacker]

We've had this at larger clients. We build the costs into the pricing, as do our competitors rendering the whole exercise meaningless except for whoever gets a pat on the head at their annual appraisal I suppose. Seeing more of it as time goes by so I guess it's a thing now.

[Flat-6]

Have them register as a Platinum Customer, for just £1400pa + VAT

[StevieBee]

We've had this as well. IMO, it's an abhorrent practice and needs to be stamped out.

There are a great many countries around the world where such a thing is considered corruption.

[prand]

StevieBee said:

We've had this as well. IMO, it's an abhorrent practice and needs to be stamped out.

There are a great many countries around the world where such a thing is considered corruption.

They introduced this at a global company I worked for when they centralised and moved their global procurement office to a more tax efficient location and introduced a similar way of doing things. It was a contributing factor to me leaving as I got fed up having to explain it with a straight face to suppliers and deal with the fallout of what was being proposed. Essentially it was a service charge to pay for the procurement function and support the purchasing portal and online auction service, but to me it felt like we were an organised crime syndicate holding a gun to these supplier's heads, if they didn't cough up and agree to their terms they wouldn't get the deals.

The company seemed to be absolutely fine with the extra costs being added to invoices, so that's what most of them did.

Then 180 day payment terms were introduced. Again the company were fine with suppliers engaging factoring payment companies who would pay them earlier, with the added costs agreed on original proposals. Made the whole process of purchasing and procurement incredibly slow and pointless with extra complexity and cost being added to meet these rules.

Though I guess the benefit of pushing cash through the purchasing team's location, securing the company's overall cashflow, reducing supplier numbers to a small amount of big global players who could provide huge volume discounts, were probably the ultimate aims.

[fatandwheezing]

Good idea on charging them to be on our customer database. Our customer is trying to get around it - we're far from his only supplier that have been a bit vocal about this.

Payment terms haven't been provided yet, but I fully expect based on who the CEO is that they will drag these way out next.