The Supply of Goods and Services

This article covers the supply of goods and services for UK businesses. The Consumer Rights Act 2015 is an act of parliament that replaces and amalgamates existing consumer protection laws and legislation of the past in the UK.

What is the Supply of Goods and Services?

The Supply of Goods and Services Act 1982 was established and requires traders in the UK to provide services to a proper standard of workmanship.

The act referred to “relevant contracts for the transfer of goods” which still stands today.

What are Goods and Services?

A goods and service contract is defined as any agreement entered by a public organisation or agency. This covers the consumption and receipt of the following:

  • Goods. Items which have tangibility such as books, clothes and products and can be provided with immediate effect.
  • Services. A skill or trade that is supplied to the public such as hairdressing, nursing or dentistry and are usually provided over time.

Who Establishes Best Practices for Supply of Goods and Services?

Economic theory dictates that issuing goods and services should result in satisfaction for the consumer in what they acquire or experience.

To achieve this satisfaction businesses must adhere to best practices.

Best practices are a set of frameworks, concepts or ethical standpoints that represent the most efficient course of action. Therefore, in this case, when dealing with contracts concerning goods and services.

Regulatory bodies establish best practices to protect the public/consumer.

Regardless of the type of business, goods and services are pivotal to the success of the business and must be approached correctly to guarantee such.

Some argue small and medium-sized companies spend 45% to 65% of all sales revenue on the procurement of goods and services.

What Is An Example of Goods and Services Best Practice?

Restaurants require goods like produce and other food items to run.

A restaurant must buy these from suppliers, which takes up a large chunk of revenue.

They then provide these goods as meals created by their chefs to consumers/customers.

The restaurant is both the buyer of goods and services and the supplier of goods and services at two different points.

In this chain, the restaurant owner/ head chef must make sure they do the best thing for themselves financially and provide the best for their customers.

They do this by buying the best product for the customer at the lowest price for the business. Without doing so, the business will lose money, or go bust on a poor reputation.

If the kitchen buys bad quality goods because they are cheap and then passes these on in the chain to the customer, the reputation of the business will suffer.

If they buy great ingredients at high prices, they may not make that money back from the consumer because the price per head would be too expensive for their market.

What Steps Can We Take To Ensure Success?

The best practice for contracts concerning goods and services is to buy the best quality goods/services at the fairest prices.

As a result, this will be passed onto the next person(s) in the chain.

A business can do several things to ensure success on best practices:

  • Do a demand analysis. See what the customers want most and supply it. Supply and demand cut down on unnecessary waste and allows best practice on contracts for goods and services.
  • Build and maintain relationships. This can be with a smaller group of reputable suppliers. Gaining an excellent reputation to commit to the best practice of buying the best quality at the fairest price.
  • Conduct an analysis on spending. This should be a review of how much is spent on procuring goods and services for a business. It identifies an area in which expenditure can and should be streamlined.
  • Reduce the supply complexity. Buy goods and services of a standard nature from suppliers for the business. The opposite of this is customised goods that may be unnecessary and cost more.