Suppliers overcharge small businesses by £3.6bn
Charges to small businesses are more than double those imposed on larger companies
Businesses with fewer than 10 employees are being charged £3.6bn more than bigger companies for the same products and services, according to a new survey of over 100 firms.
The research, undertaken by group deal discount specialist Huddlebuy, found that while big businesses experience huge discounts from suppliers, small firms are being overcharged by as much as 70%.
The authors of the study claim that Britain’s small firms – which currently employ 4.5 million workers – are spending, on average, £1,285 more per employee than necessary.
The area most affected by the inconsistency of suppliers’ costs is London and the South East, where small companies experience excessive charges amounting to £1.3bn per year. They are closely followed by the East of England, with £390m worth of unnecessary costs, and the North West, where suppliers are forcing small businesses to pay £368m more than larger firms.
The research also found that companies in the transport, professional services and IT/communications sectors are most likely to over-charge their clients.
Saurav Chopra, CEO of Huddlebuy claims that these results are “simply shocking”. She adds: “Small businesses fighting desperately to survive in harsh economic times are being ripped off by greedy suppliers, while big businesses enjoy huge savings from their favoured suppliers.”