Supplier Listing by Big Companies Stifling Competition and Hindering SME Growth

One of my clients recently approached buyers at a number of leading large firms to sell his product. He got the same reply from 12 companies- also listed on the ZSE: “Sorry you are not on our supplier list”
Unfortunately for Charles, his company had been “down” for the past two years and only recently started to recover. So when the “big” requested firms to join their supplier lists at the beginning of the year, he was not yet in a position to do so. And apparently you cannot join in middle of the year.
I questioned the wisdom of suppliers lists some months back. Especially when SMEs are asked to pay $10 to $20 to get on the list. Imagine a big company which buys thousands of products. Assume 2,000 suppliers apply, each paying $20: that’s a cheap boost to a company’s cash flow.
Now say someone missed the supplier listing deadline but has got a superior product at a better price than all the others who managed to get on the list. The big firm loses on the better product / value because it has locked out new suppliers.
Big firms ask SMEs to pay in order to supply products to them. And they will make SMEs compete against each other in order to bid prices down. Worse still, they will impose payment terms that are burdensome to small firms. SMEs supplying big firms on credit are effectively funding those firms’ working capital. And some of them are borrowing funds or discounting their orders at exorbitant rates!
How can SMEs survive in such an environment? Please let’s share ideas, it’s your platform.

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2 Responses to “Supplier Listing by Big Companies Stifling Competition and Hindering SME Growth”

  1. Eliot Dzeka Says:

    The above senerio creates a sittuation where the gape beween big firms and smaller companys continue to widden with no sign of narrowing down. It is in the interest of smaller firms to collectively take a steps back and reconsider their supply of goods position as there is no justification for the big firms calling for a registration fee. One other aspect we should also be asking ourselves is that is this legal for these firms to be calling a registration. We need to a aprach our legal system to find out the bases of these big firms requirement for a registration. We can only manage to seek recourse if we speak to big firms with one voice, that is smaller guys has to sit down and put their prof of payments together before taking any action. If there is enough evidence the evidence at hand will pave the way forward. For as long there is no collective discusion smaller guys will continue to bleed and many a number will eventually colaps.

  2. nkulumani mlambo Says:

    t
    h the long term solution is to approach the lawmakers so that they make unlawful for companies to have a supplier list and to ban these payments hopefully they will listen

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