This tongue in cheek look at the US dollar’s rise and fall would be funny if it didn’t mask the pain that many feel is upon the global economy. But then I read in the FT that Tesco is strong arming 300 of its non-food its suppliers to pony up an extra 30 days’ cashflow as it seeks to release more cash into its coffers. Over on HotViews, Richard Holway reports the same disease has spread to Computacenter and DSG, noting that:
A month back one of my largest customers sent me a similar ‘take it or leave it’ demand upon my contract renewal. Their previous 30 day payment terms had meant 60 days in practice so I suspect I’ll be waiting 90 days now from the date of my invoice. There is really nothing I can do about it other than walk away from a contract which, at least, I know will pay me eventually (which is better than some other customers I’ve had)
The stories I could tell…
This type of activity is symptomatic of a system gone wrong. To date, much focus has been on the banks and financial institutions but it is the systemic failure in that system that contributes to what we would otherwise call aberrant business behaviour. It won’t get any better any time soon and it will be the little guy who pays. Where is the logic in that? Easy – control. The more pressure a customer can put upon suppliers, the easier it is to control the market in which they play. A fragmented market is ideal in those circumstances.
Personally I think Richard is living in a fools paradise. Once a customer has you on extended terms there is no going back unless you are insistent or are prepared to walk away. If you are providing a differentiated service then there are always things you can do. You could for instance agree to those terms provided the customer is prepared to pay you an extra 2%. That’s roughly the cost of financing THEIR activities for another month. You could negotiate advance payments – I do it all the time. You could insist on stage payments. You could retain ownership. You could simply call their bluff.
Some will say: ‘Ah, but when the Big Kahuna is calling the shots…’ Sure, you always have THAT choice but that’s all it is. A choice. If enough people stand up and say no then those same commercial bullies can be made to see sense.
Who said business and ethics can go hand in hand? It’s not possible.
Related articles by Zemanta
- Computacenter denies stringing along small biz
- VARs slammed over payment term shift
- Computacenter posts positive Q3
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=f4a32ba6-a9c2-4648-a5e3-e499cde2dbdf)
