Amazon revises payment terms and delisting processes | News

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Amazon has announced an overhaul of its supplier delisting practices and payment terms following its recent designation under GSCOP.

The online giant, which has been watched by arbitrator Mark White since March after crossing the £1billion grocery sales threshold set by the Competition and Markets Authority, said it took code compliance “very seriously”.

Among the changes announced by Amazon, it had introduced a new maximum payment term for suppliers and halted the process of retrospectively increasing supplier payment terms.

He also looked at the “process and timelines” of his controversial CRAP (can’t make a profit) policy used to delist brands not deemed financially viable, though he refrained from committing to changes to the rules. cancellation deadlines.

Until now, vendors often had to wait up to 90 days to be paid by Amazon, but that time is now reduced to a maximum of 60.

Amazon also promised that it would not seek improved payment terms for existing grocery suppliers. So if, for example, a supplier had 30-day payment terms, they would stay there.

For any new supplier, payment terms will now be capped at 60 days.

In a bid to address GSCOP’s ban on retrospective variations in supply agreements, Amazon said it has now moved to a policy of initiating annual supplier negotiations for grocery sellers before contract renewal dates and to confirm suppliers’ agreement that the terms apply from the outset. of a new mandate once the negotiations are over.

He said he wanted to make sure he was “transparent with suppliers on the timing of any potential changes to terms”.

The backdating of payment terms was cited by vendors as one of many concerns about Amazon’s behavior, along with the short notice and lack of transparency regarding write-offs.

Amazon also said it now ensures all suppliers have the opportunity to review any debarment decisions with code compliance officer Alex Simpson, a former Asda lawyer.

It has also provided GSCOP training to its entire UK procurement team and is nearing completion of training for all other staff involved in the process.

Amazon said it was committed to building “successful, long-term relationships with our suppliers.”

“Amazon was built on the principle of customer obsession, and since its designation, we have already made several changes to our business,” Simpson said.

“We know that if we do things right for our suppliers, we will do them right for our customers too.”

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