New Study from Proxima Suggests American Consumers Intend To Punish Companies Involved In Supplier-Driven Scandals

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Three-in-four consumers surveyed will take business elsewhere if a company they patronize is found to have badly behaving suppliers; results underscore urgency for companies relying on suppliers to actively monitor practices.

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% of respondents stated they would be unlikely to buy products or services from a company involved in controversial supplier practices. Furthermore, nearly 66% 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 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.”

About Proxima
Proxima, a leading global procurement services provider and outsourcer, focuses on aligning an organization’s third party costs with their corporate aims.

Our Catalytic® procurement offers our clients a profoundly different way to manage their suppliers, one which is impossible to replicate in-house. We work closely with organizations to improve business performance by helping companies spend well and maximize value from their operations. Our approach goes beyond driving efficiency. It's about enabling change, enhancing management control and delivering tangible financial benefits.

Proxima manages over $10 billion in operational spend on behalf of our clients across a broad range of industries including consumer products, financial services, travel & leisure, healthcare and media & entertainment.

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Greg Kalish

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