Overview: What is the purpose of a genuine supply chain?
A supply chain’s purpose is to produce, receive goods and transfer them quickly, with as little expense as possible, to the final consumer. For a supply chain to be efficient, there should be as few links/sales as possible. Genuine retailers/suppliers/producers aim to purchase goods as close to the point of origin as possible, to cut down on costs inherent in each onward supply. Most will order goods as they need them, and will only order in ‘long term’ advance if it is commercially sound to do so, that is, that they will be able to use them or sell them on quickly when they become available. Some producers will offer good incentives to a trader if he orders in advance, including: discounts, good payment terms etc. Traders will typically aim to sell goods before they need to pay for them. See HMASAC Accounts and HMASCR Credibility guidance for more information on this area.
It is natural for excise traders to become involved in a supply chain for genuine commercial reasons. Businesses, including large corporations, will often contract the services of specialist companies to procure the excise goods. Also genuine suppliers will seek to have a reliable supply of goods.