Against the current economic backdrop
companies are constantly looking for ways to boost their bottom line.
Particularly over the past year we
have seen companies trying to extend their payment terms by all manner of means
– some fair, some foul.
In addition to this many are looking
into the question of obtaining “rebates” from their suppliers. Suppliers will
be asked for a 0.75% rebate if their sales grow by 10%.
Earlier reports have suggested said
the rebate would rise to 5.25% if sales grew by more than 50%.
Amongst suppliers there is always a
battle to secure sales but there also has to been a commercial realism.
If by securing so-called “prestige”
business the overall operating margin carries a disproportionate return then it
becomes a question of commercial realism.
In such situations it may well be
argued that such business is best left to others.
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