When it comes to supplier payment terms, there is often a tug of war at play. On the one hand, corporate buyers are looking to stretch their supplier payment terms as much as possible so they can conserve their capital. Longer. At the other end are the suppliers, often smaller companies that have less leverage to convince their customer to pay faster.
This week’s B2B Data Digest looks at this battle between the companies, including a new initiative among Asian apparel makers to fight for more favorable terms, a struggle within the Apple Store vendor community, and expansion. a faster supplier payment initiative in South Africa.
Four clothing manufacturers’ associations have joined the STAR network (the sustainable textile of the Asian region) as more and more industry participants come together to promote better purchasing and payment practices across the sector. According to Fibre2Fashion, the association’s new members join the network from Turkey, Indonesia and Morocco, in addition to the nine current members, who hail from Bangladesh, China, Cambodia, Myanmar, Vietnam and Pakistan. . According to the publication, STAR network suppliers account for about two-thirds of the global market share of factory exporters in the apparel and footwear category, which has been particularly hard hit by canceled orders and B2B longer payment delays. long. The coalition seeks to collaborate and combine the influence of its members in the marketplace to establish better payment and delivery terms with corporate buyers.
Separate reports in Fashion United said the STAR network was working with GIZ FABRIC, the International Apparel Federation (IAF) and the Better Buying Institute to establish a common set of minimum payment expectations. “Suppliers around the world are coming together to deliver solutions to strengthen global supply chains,” said Dr. Marsha Dickson, President and Co-Founder of the Better Buying Institute. “Suppliers often have the best ideas for overcoming the challenges and impacts of brand and retailer purchasing practices on workers and the environment. It is essential that their voices are heard.
30 day payment terms will be standard for Macsteel, revealed articles in Engineering News. The South Africa-based steel conglomerate is accelerating B2B payment terms to its smaller suppliers in a bid to bolster the country’s overall economy. The initiative is part of a wider #PayIn30 campaign in the country, led by Business for South Africa, which is advocating for more favorable supplier payment practices among large organisations. “Even large corporations continue to face sustainability hurdles on a daily basis, not to mention the plight of SMEs [small and medium-sized enterprises] faced, particularly in terms of liquidity,” the steel company said in a statement.
60-day payment terms are now in place for Apple Store vendors in the UK, The Telegraph recently reported that sellers are unhappy with the extended payment deadline. Previous payment terms were 45 days, but Apple has reportedly extended its payment agreement for suppliers of products such as iPhone and iPad cases. The changes also include a new obligation for sellers to take back unsold goods. Both changes will negatively impact supplier cash flow, some companies said. In a statement, an Apple spokesperson said, “Apple regularly evaluates the assortment of third-party products we sell and the structure of our models to provide vendors the ability to grow their business reliably and with confidence. “.
$1 million is owed by a Pennsylvania town to street reconstruction contractors, an unpaid bill that led the city’s mayor to secure bridging funding to pay the bill. Local news in the Sun-Gazette said the overdue $1 million bill was part of a larger $5.5 million street reconstruction project. Work associated with the unpaid invoice was completed in October, according to reports. The city’s mayor reportedly reallocated public funds to pay the bill.
“There must be someone else who can answer this besides me, as there are already many checks being sent to this project,” the mayor told the publication, adding that “no more delays and the contractor may or may not be as graceful. I realize that’s a lot of money, but I only realized yesterday that something was going on.” The mayor noted that the city treasurer and comptroller first brought attention to the late bill.