Friday 14 May 2010

A GSCOP-thought for the weekend?

Given that the designated retailers have little to gain and lots to lose from the spirit of GSCOP, it is unlikely that they are currently preparing to merely observe the letter of the new Code of Practice.

For instance:
Losses from Banned conditions:
  • No delay in Payments (they currently pay in 45 days approx., scope for negotiating extension, 90 days ring a bell?)
  • No requirement to predominantly fund a promotion ( move from fully-funded to 50%?)
  • No obligation to contribute to marketing costs (your current payments reduced to zero?)
  • No Payments for shrinkage (say average shrinkage = 2% of retail sales?)
  • No Payments for wastage (say 5% of sales, conservatively?)
  • No Payments as a condition of being a Supplier (your current payments for listing, etc = zero?)
  • Compensation for forecasting errors (think refund of incremental margin from normal sale of promo-stocks)
Potential recovery from:

  • Extending credit (by negotiated agreement?)
  • Trade funding (currently up to 20% of purchases, scope for more?)
  • Deductions off invoice (say 3 -10% of invoiced sales, scope for more?)
The designated retailers have to be working on ways of recovering losses from banned conditions, and also maintaining the status quo by signing suppliers up to a retailer-driven supply-agreement, written in whose favour…?

Are you missing a trick by simply awaiting the outcome?

Have a fair-share weekend, from the Namnews Team!

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