Industries, News

The Supply of Goods and Services

Goods and Services UK

This article covers the fundamentals of 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. This includes The Supply of Goods and Services Act 1982 which was established and required 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 is still relevent today. A goods and service contract is defined as any agreement entered by a public organisation or agency for 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 is usually provided over time

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, 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.

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 haemorrhage cash 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 astronomical prices, they may not make that money back from the consumer because the price per head would be too expensive for their market.

Goods and Services Management

The best practice for contracts concerning goods and services is to buy the best quality goods/services at the fairest prices and pass this on to 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 by 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 and 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 rather than customised goods that may be unnecessary and cost more.

If you would like help with your policy and procedure documents or legal advice and contracts for your UK business, please contact us using the form below.


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