Sluggish expenditure: Producers bypass intermediaries, opting for direct sales to customers

The prolonged slump in consumer spending has had a profound impact on suppliers, disrupting the once-harmonious flow of goods through the business chain, where manufacturers produced, suppliers transported, and wholesalers stored products for retailers to sell.

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As consumer spending continues to plummet, this rhythm has come to a grinding halt, prompting suppliers to seek alternative sales channels, including selling directly to retailers and end-users online, in a bid to boost sales.

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Some suppliers, including international ones in the aesthetic business, have taken to paying influencers to promote their warehouses, where customers can purchase individual items for personal use or resale, while others have resorted to door-to-door sales, particularly for cooking pots.

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According to Mrs. Omolara Fatoye, a kitchen utensil seller, this development has had a devastating effect on wholesalers, as many customers now prefer to buy directly from suppliers, leaving wholesalers and retailers at risk of incurring losses.

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Mrs. Fatoye noted that suppliers are struggling with low sales, forcing them to seek customers online, where they often sell the same quantities they would to wholesalers and retailers, highlighting the challenges faced by new businesses, which are often forced to sell at a loss.

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New businesses, in particular, are bearing the brunt, with some owners selling their initial stock just to cut their losses and move on to other ventures, having incurred expenses on the items, as Mrs. Fatoye herself was forced to diversify her business to avoid losses.

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Mrs. Aminat Shuaibu, a female bag seller, recounted an incident where one of her suppliers begged wholesalers to post positive reviews on an influencer's online advert page, a move that Mrs. Shuaibu deemed unwise, as it would compromise her own business interests.

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Mrs. Shuaibu argued that suppliers should maintain confidentiality about their business contacts, just as her predecessors did, and that by selling directly to retailers and end-users, suppliers are essentially undermining the traditional business chain.

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She pointed out that suppliers in other industries, such as vehicle spare parts, would never publicly disclose their sources, highlighting the unique challenges faced by those in the aesthetic business, where social media has created new opportunities for suppliers to connect with customers.

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Mr. Abdul Lukeman, an Economist and lecturer, explained that when sales volumes drop below a certain threshold, traditional supply chain boundaries dissolve, prompting suppliers to seek revenue wherever possible, even if it means bypassing their largest wholesale customers.

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Mr. Lukeman described this phenomenon as an evolutionary survival tactic, where suppliers prioritize their own interests, leaving wholesalers in a precarious position, with overflowing warehouses and no clear role to play in the business chain.