Will consumers punish companies involved in supplier-driven scandals? - Procurement News

In The Press | by Procurious HQ on 15/05/2015 03:35 | 0 comments

Survey finds that 74 per cent of respondents would be unlikely to buy products or services from a company involved in controversial supplier practices.

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A newly published survey suggests that companies who are not actively monitoring the business practices of their suppliers, or who are engaged in questionable supplier practices themselves, are placing their reputations and their balance sheets in harm’s way.

The study of typical American consumers, commissioned by sourcing and procurement specialist Proxima, reveals that 74 per cent of respondents stated they would be unlikely to buy products or services from a company involved in controversial supplier practices. Furthermore, nearly 66 per cent would stop giving such a company their business even if that company was the most convenient and cheapest option.

“In recent years, we’ve seen a tremendous shift as companies are relying more heavily on suppliers for everything from their core offering to the market to back office services,” said Jonathan Cooper-Bagnall, EVP & Commercial Director of Proxima. “With this increased reliance comes increased risk and a requirement to engage suppliers with ethical and responsible track records. The results of this study suggest that companies who fail to appreciably vet and monitor their suppliers are at risk for significant commercial consequences.”

The survey, commissioned by Proxima and executed by Kelton Global, gauged the views of more than 1,000 American consumers over the age of 18 in March of this year. Other key findings of note include:

  • Even among financially-strained consumers (respondents with less than $35,000 a year in income), one in three would spend more money elsewhere to avoid patronizing a scandal-ridden company
  • Nearly a third of respondents indicated that they would proactively tell friends and family to stop spending their money with a company involved in controversial supplier practices

Cooper-Bagnall continued, “In recent years, supplier driven scandals have tainted the reputations and bottom lines of a number of well-known companies around the world. Yet, when these scandals arise, consumers are not drawing a distinction between company and supplier and are placing as much blame, if not more, squarely at the feet of the company. It is, therefore, critically necessary that companies not only vet suppliers properly before engaging them, but create a monitoring program to catch and address any improprieties before they result in public scandals.”


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Procurious is an online business network for a new generation of procurement and supply chain professionals looking to advance their careers, develop their skills and expand their global professional network. Think of Procurious as a ‘social professional’ network, a learning hub and a career centre. Who are we talking to? You! Procurious is pitched at the more than 2.5 million procurement and supply chain professionals worldwide. We know you are shrewd bunch – globally minded, upwardly mobile, highly educated, commercially savvy and holding the purse-strings of medium – multi-national businesses worldwide. Welcome to Procurious. Get involved. Get Ahead.


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