Suppliers urged to understand costs

While some suppliers are working well with the wholesale sector, others do not understand it, or even make an effort to, warned Scottish Wholesale Association president Graham Benson.

Speaking at the SWA annual conference he said suppliers needed to understand the costs involved in wholesaling and allow sufficient margin.

He praised suppliers who were supporting projects such as Landmark’s Hot House and Booker Premier, but said he had recently been shaken by the tone of a note from a supplier about a price increase.

“It cited all the usual reasons for a price hike – the cost of raw material, diesel, labour and so on,” he said.
“But what really shocked me was the strap line – while we need to pass on these increases in full to our customer, we would recommend that the distributor pass on only our price increases to the retailer.

“There was absolutely no cognisance of wholesalers’ needs in terms of enhancd margin needed just to cover cost or indeed add value to the supply chain.”

Benson said wholesaling had become far more diverse in the past five years, in response to the needs of customers, and suppliers needed to understand the implications of this.
“No longer should wholesalers accept suppliers’ recommendations to sell a product at just one penny profit,” he said. “Suppliers have got to recognise that the cost to serve has now gone up dramatically.”

And he added: “What I am asking all suppliers is, please consider the additional costs that our businesses have to bear to deliver the goods – your goods.”

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