The BBC reports that “Tesco suppliers have been told they will have to pay a new charge when the supermarket sells their products online.
“An email, seen by the BBC, warns suppliers could be penalised if they do not agree to the new ‘fulfilment fee’.
“The retail giant said the new charges were essential to help it “shoulder the costs” of serving more customers shopping online … Tesco did not specify the fees in its email but it is understood suppliers could face costs of 12p per item on branded goods and 5p for own-label products, irrespective of price point.
“Small businesses with a turnover of less than £250,000 would not have to pay the fee, but online sales through the company’s wholesale Booker business would be included.”
KC’s View:
Unfortunately, this is standard operating procedure in the US, and a practice that erodes trust and collaboration between retailers and suppliers, even if there are more than a few rationalizations for why it is a legitimate way to do business.
I’d refer you back to a conversation I had here on MNB with David Friedler, president and managing partner of Simpactful, who spent a quarter century in the CPG business, about this subject. We talked about the extent of the problem and whether there is a fix for it (or even should be).
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