Do You Know Who Your Business Suppliers Really Are?

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Almost all companies have a long list of business suppliers which they rely on to produce their service. You may have a good working relationship with these suppliers and they may serve your business very well. But how much do you really know about them? Could they be doing anything illegal? Could they be talking advantage of you? What if they are doing anything unethical which would affect your reputation? You ought to know who your business suppliers are!

Fraud

One of the most direct ways business suppliers might harm you is through fraud. A fraudster may be disguising themselves as a well known supplier in order to get money from you. A supplier you have used for a long time may start overcharging you unnecessarily. Either way the net result is the same. Wasted money. There are easy ways to avoid this; doing research on the company and making sure the supplier is who they say they are. Even if you have a long list of suppliers, you should know where your money is going, and to whom.

SEE ALSO: Supplier Selection: 3 Steps to the Best Decision

Corruption

Another issue is corruption. This may not affect your business in the short term; your business suppliers may be offering you a good service at a low price. But beyond that, they might practice very unethical business practices. You may have heard the story of JBS. They were the world’s largest meat packaging company who found themselves in the centre of a corruption scandal, where they spent nearly 600m real to bribe around 1,900 politicians in Brazil. Being associated with a supplier such as this leaves you at risk. Any company tied with this supplier may end up being investigated themselves, which is bad for business.

Business Suppliers Reputation

Related to the above example, even without a massive corruption scandal and the risk of investigation, being associated with an unethical supplier affects your reputation as a business. Becoming involved with business suppliers who are at fault due to terrible environmental practices, lack of workers rights etc. looks bad on your business. If a news story breaks about this supplier, your business reputation can be in jeopardy, just from association. Do research on the suppliers, and think carefully about whether or not you want work with them.

SEE ALSO: The Key to Supplier Management: Build Lasting Relationships

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