With more retailers closing their doors, limiting store hours or shifting to online sales, the opportunities for fraud and gray market activity in the supply chain have increased.
Reports of increased criminal activity, including fraud, price gouging and counterfeit products, have drawn global attention. In a study of supply chain fraud, the international accounting firm, KPMG, found that in more than 4 out of 5 cases, asset misappropriation, such as billing fraud and disbursement schemes, was the issue.
At the retail level, whether in-store sales or ecommerce, protecting against credit card fraud is a constant challenge for merchandisers. Ecommerce fraud is reported to be increasing in frequency and intensity, including cnp fraud.
Allowing ample time for researching product availability and supplier support can avoid mistakes that eat into available time. Good product procurement practices improve the peace-of-mind that comes with a secure supply chain linked to quality products and services.
One of the first steps in beefing up security of a supply chain comes with selecting reputable and reliable product sources. When researching a product look for a sufficient level of detail for the product and what the ordering platform or distributor can tell you about the source. Avoid products that may have gone through multiple shippers without a reasonable explanation.
In some instances, multi-point distribution of a product can indicate it is coming from the gray market. This unofficial, unauthorized supply channel often moves hard-to-find items with steep price mark-ups and should be avoided due to a lack of product returns. On the retail side, customers are allowed by law to seek return of their money. In most cases, merchants may seek the assistance of a chargeback company.
High Cost of Lowest Price
Finding the lowest priced product may look like a bargain but often it comes with the risk of poor performance in the customer’s hands. Look for purchase platforms that provide sufficient detail and display pricing up-front.
Time to Realign?
During periods of slower sales, managers are advised to review product lines and adjust according to long-term goals. If, for example, a goal is to shift emphasis to products that are sustainably manufactured, use a pause in activity to identify suppliers with connections to manufacturers specializing in those products.
Fit for Purpose
A supply chain should not only promote efficiency but also improve the value of an entire business. By moving away from one-off, as-needed transactions, a supply chain can be a structural member in a business strategy.