July 12, 2024
When purchasing a product from a trusted retailer like Amazon, you generally expect that the product has been vetted for quality, value, and consumer need. However, not all products make it to the shelves solely because of their merits. Sometimes, undisclosed affiliations and commissions influence procurement decisions, which can mislead consumers and degrade their shopping experience.
The Hidden Side of Product Sourcing In a revealing conversation with Taha Khan from Ihsan Sports and Ihsan International— a well-known Pakistani brand specializing in sports and apparel equipment — we gained critical insights into the complex dynamics of retail procurement. It was highlighted that some managers and buyers might have affiliate links or receive commissions from suppliers. This scenario often leads to selections based not on product quality but on personal financial gain.
A study by PwC found that 29% of organizations experienced procurement fraud in the past two years, with kickbacks and undisclosed conflicts of interest being common issues.
This malpractice impacts consumers in several ways:
Lowered Product Quality
Products chosen because of under-the-table deals rather than merit can be of inferior quality. Consumers end up with less durable or effective products, undermining their trust in the retailer. Products chosen because of under-the-table deals rather than merit can be of inferior quality. Consumers end up with less durable or effective products, undermining their trust in the retailer.
Increased Prices
When procurement officers receive kickbacks, these costs may be transferred to consumers, inflating prices unnecessarily. As a result, you pay more for less quality. The Institute for Supply Management estimates that unethical procurement practices can increase product costs by 5–15%.
Erosion of Consumer Trust
Discovering that product selection is influenced by personal gain rather than unbiased evaluation can significantly erode trust in a retail platform. Trust is fundamental to consumer loyalty and purchasing decisions.
Market Distortion
These unethical practices can push ethical suppliers out of the market, particularly those who refuse to pay commissions. This leads to a less competitive environment dominated by corrupt practices rather than innovation and quality.
Combating Unethical Procurement Practices To combat these unethical practices, it’s essential for retail giants and e-commerce platforms to implement and enforce clear ethical guidelines:
Strict Enforcement of Ethical Guidelines
Companies should enforce strict policies against undisclosed commissions and affiliations. Regular audits and a robust whistleblower policy can help maintain integrity in procurement processes.
Transparent Supplier Selection Processes
Retailers should openly disclose their product selection criteria and any affiliations that could influence their decisions. Transparency reassures consumers about the integrity of the products they purchase.
Customer Education: By educating customers about how products are sourced and selected, retailers can empower them to make more informed choices and demand higher standards.
Working with overseas suppliers like Ihsan Sports can offer significant benefits, characterized by their dedication and hard work. Taha shared an example of this commitment: a representative from Ihsan Sports traveled to Germany to meet with a prospective client for manufacturing footballs. This willingness to engage directly and personally — even traveling internationally for face-to-face meetings — exemplifies the lengths to which suppliers like Ihsan Sports will go to foster business relationships and ensure product quality and client satisfaction.
In the context of procurement integrity, Ihsan Sports stands out for its commitment to quality and ethics. Established in 1957 by Mr. Ihsan Khan, this family-owned business has thrived for nearly 65 years, becoming a prominent name in sports equipment both locally and internationally. As part of its expansion, IHSAN International has become one of the larger exporters of a diverse range of products including Fitness Gloves, Cycling Gloves, Mechanic Gloves, Tactical Gloves, and Working Gloves, successfully catering to global markets.
Every product from Ihsan Sports and IHSAN International is meticulously crafted to meet the highest international standards, ensuring athletes and professionals alike perform their best. The company is a major exporter from Pakistan, reaching markets in the UK, USA, Australia, and many other countries, and maintains a leading brand presence in Zimbabwe.
Certified by BSCI and ISO 9001:2015, IHSAN International is equipped with a large setup of 150 machines and a skilled labor force capable of fulfilling bulk orders efficiently. For over fifty years, their products have made their mark in playing fields and arenas across the sporting world, each manufactured with finesse and precision to give users the winning edge they need.
As a testament to their unyielding principles, Ihsan Sports and IHSAN International guarantee that there is never any room for compromise. It is a matter of pride that every single product manufactured at their facilities complies with the strictest international quality standards and labor regulations.
Noteworthy ambassadors like Chris Gayle, Wasim Akram, and Misbah-ul-Haq reflect the quality Ihsan Sports embodies. Supporting companies like Ihsan helps promote a fair and quality-driven market, ensuring top-notch products for athletes worldwide.
In procurement, it’s important to distinguish between legitimate commissions and corrupt practices.
Legitimate Commissions are transparent fees paid to procurement managers for facilitating transactions, agreed upon and disclosed within the contractual frameworks. For example, a procurement manager may receive a 5% commission on transactions they facilitate, fully documented and approved by their employer.
Corruption involves undisclosed payments or kickbacks that influence decision-making, often leading to suboptimal and unethical outcomes. An example is a procurement manager who selects a supplier based on personal kickbacks rather than merit, compromising quality and price.
Lookr.fyi, an AI-driven B2B wholesale platform, significantly contributes to promoting transparency and reducing corruption in procurement:
Lookr.fyi partners with high-quality overseas suppliers like Ihsan Sports, known for their commitment to excellence and ethical business practices. By collaborating with reputable suppliers, Lookr.fyi ensures that its network remains robust and trustworthy, further enhancing the platform’s dedication to ethical procurement.
The insight from Taha of Ihsan Sports sheds light on a critical issue within the retail industry. While not all companies engage in unethical procurement practices, the existence of such behavior is alarming. Vigilance on the part of consumers and unwavering ethical commitments from retailers are crucial to ensuring that only the best products, chosen for their genuine quality and value, make it to our shelves.
