Being a supplier in South Africa you have to tread carefully because so many companies are affected by internal corruption. When you visit these companies you do so with an open mind because not everything is as normal as it seems. Supplying packaging material should not be complicated or have any form of risk yet it is a minefield and you have to be careful where you walk.
Over the years I have learned through experience to spot things that are not normal and these red flags depending on the size of the company can have serious consequences. In the past I would poke the bear in order to unravel the internal theft, but these days I have learned to stay well clear as it consumes too much time due to certain individuals blocking you.
Packaging tells you so much about a company like how well they are doing, are they growing and how well the business is being run. If a business is growing in sales the first thing that is impacted is the packaging orders and as a supplier you know their monthly volumes so it tells you immediately. late payments suggest a cash flow problem which could be down to growth which is not normally a serious concern or it could be down to more serious financial problems internally. I have witnessed companies that were over 50 years old hit the wall and I had given them warnings 2 years before it happened because I saw the signals.
In the past week I have uncovered another bees nest of corruption and the problem is I am not sure how high the company ladder this goes. The owner could be the one behind it and see this as a way of earning tax free cash or it could be in upper management which kind of tells me the owner is involved somewhere. packaging is a cost to the business so this is written ff against the costs via tax and the business is basically hiding the real costs and pocketing the rest.
This is all about understanding the numbers and I know what volumes this company was using with regard to pallet wrap. Yes innocent old pallet wrap tells it's own story as their volume has doubled within the last 6 months telling me two things. The business has doubled in size which it has not or the pallet wrap has shrunk in size by half and they are basically paying double. The company is in cahoots with their supplier and are basically stealing R100K monthly ($6K) from their own company.
This is just an example of what is happening in the market place and why you need to be paying attention and have an open mind. I have uncovered theft happening in the millions and these people will stop at nothing to protect their little scheme. How far would they go to protect this secret I have no idea and why I step away because the risks are that high.
We are not talking about one or two companies doing these types of schemes and it is rampant. When you find what I would call a normal company you celebrate because then at least you have a chance of landing their business.
The problem is companies are finding creative ways of generating cash due to the harsh taxes that exist. This is not all about the employees being corrupt and the owners in many cases are the corrupt ones. When the prices rise like they have recently by over 50% and again at the end of this month by another 11% they are the ones who are benefitting because it gives them an opportunity to steal even more.
As frustrating as this is for myself being a supplier at least I am well aware of what is taking place and I am sure this is not just a South African problem and is most likely taking place all around the world. Shocking really when you think about it because the problem is growing and the task becomes harder finding legitimate companies willing to do business the normal way.
