Steve Hemsley’s article “Reliable sources” on premium sourcing (MW November 11) illustrates well the challenges faced by sourcing companies.
However, it does not present the full picture.
In reality, the threat of tight deadlines means companies are only able to test a small sample over enormous production runs when, realistically, there may be a few samples that fall below quality standards.
Thus there is still a real danger that some “bad apples” will slip the net and cause the promotion to be recalled.
Recent claims for total promotional recall, costing &£100,000-plus, have been triggered by only two or three premium items being demonstrably defective.
Despite painful experiences, there is a lot of bravado about the risk of product recall, and most clients still don’t perceive it as a real threat. Yet, in an age where the consumer is a lot more sensitive and willing to sue, they ignore this problem at their peril.
What is the solution?
Ultimately, clients need to take the initiative and pay more attention to contracts with sourcing agents.
And they should insist they are indemnified for all liabilities. Insurance cover has often been considered a low priority when it comes to organising campaigns. However, it is easy to obtain a policy for public and product liability, product guarantee, recall and financial loss and, what is more, it can be negotiated on an annual basis as a percentage of turnover.
Thus the cost of full protection, for agent and client alike, can be included at a very low percentage as part of invoice pricing, thereby adding considerable value to the client.
Joint managing director