A warning to us all – B2B commerce needs to be an ecosystem

March 28, 2012 11:17 am | Published by

Game Group goes under

Game Group has now, sadly, gone into administration, closing 277 shops and making 2,000 employees redundant across the UK and Ireland. According to multiple reports the company had problems paying its suppliers – to whom it owes £295m – and HMRC. It attempted to re-negotiate agreements by reducing prices, extending payment terms or securing supplier rebates. But ultimately, could not pay its bills.

Its supplier relationships deteriorated to the point that, even with additional finance secured from its bank, its suppliers took the decision to stop providing new titles.

This should be a warning shot to businesses – not just retailers – throughout the UK and Europe: that they need to work closely with suppliers from the very start of a relationship.

The benefits of working flexibly from day one are mutual for buyers and suppliers. When a supplier needs an early payment, it can be accommodated, while in the same breath, when the buyer needs a little extra time, terms can be flexibly extended.

This relationship can only happen when there is full visibility of the process on both sides. A company must be able to instantly and accurately assess its cash liquidity in order to both make decisions that benefit the business and to secure its long-term stability and security. The more visibility companies have, the sooner they can alert partners and suppliers and the more chance they’ll have of agreeing more flexible payment terms.

An open network of relationships that works in real-time benefits everyone within the B2B commerce ecosystem and can help to protect against a fatal collapse of a company’s finances.

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