One supplier has called for retailers and brands to pay up for cancelled goods. The author has asked to remain anonymous.
Coronavirus is certainly testing suppliers’ resolve and loyalty, the supplier writes. We now find ourselves in a position where many of our orders are at a complete standstill. We have orders on the water, orders at the docks, orders on trucks going to port and orders half made.
There’s fabric on cutting tables with pieces cut, and fabrics in stock for future orders sitting in the warehouse, not to mention fabrics being weaved at mills. Retailers are stretching payment terms and, in some cases, cancelling all orders.
To turn off everything overnight is, of course, a disaster. It affects every single person in the supply chain, from farmers supplying cottonseed, to cotton growers, to spinners, truck drivers – and this before we even start to think about weaving, making, and so on.
There are hundreds of thousands of jobs associated with retail and its supply chain, so it is critical that retailers and etailers work closely with manufacturers because when we come out on the other side retailers, etailers and manufacturers are the only ones that can preserve some sort of status quo of all these associated jobs across the many countries.
Nearly all retailer and etailers have taken retrospective discounts at some point to shore up their profit. All impose fines for non-compliance issues, extend payment terms, increase discounts and request air freights for orders a week late. Suppliers are already having to live with this.
We are in the most momentous of times and all retailers mention loyalty, but in reality, there is none to suppliers. One exception I see does appear to be H&M – it at least seem to be trying to support suppliers. [H&M has agreed to pay for already produced garments and goods in production under agreed terms.]
It is perhaps the only retailer to pay its suppliers for cancelled orders where products have been manufactured.
It is looking like there must some permanent casualties of coronavirus, but with many retailers and etailers now extending their credit terms with no notice, we need to hope they actually do indeed start to make these payments, otherwise it is extremely hard to see how suppliers will come through this.
Perhaps now the curtain has come down, we will see which retailers and etailers are truly ethically and socially responsible. Any retailer that is using this as an excuse to discount or not pay invoices for made goods should be blacklisted by suppliers.
All brands must follow H&M’s example. #PayUp.