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Small businesses overcharged by 70% by suppliers

London, UK (13/09/2011)

LONDON (My Business) Britain's small businesses are being short-changed by suppliers – with some overcharged by as much as 70%.

That is according to a study of 100 firms by group deal discount specialist Huddlebuy.

The report found that while large firms receive substantial cost reductions from suppliers, businesses with less than 10 employees are not receiving the same treatment.

It is estimated that Britain's small firms are being charged as much as £3.6bn more per annum than larger business customers pay for the same products and services.

The cost is the equivalent of £1,285 more for each of Britain's 4.5 million small business workers than is necessary.

Furthermore, pricing varied by region; with small firms in London and the South East worst hit by inconsistencies in suppliers’ costs – amounting to as much as £1.3bn per year. Businesses in the East of England were close behind, with £390m worth of unnecessary costs. In the North West, suppliers forced micro-firms to pay £368m more than larger businesses.

Suppliers within professional services, IT and communication, and the transport sector are most likely to over-charge their small business clients, the report found.

Saurav Chopra, CEO of Huddlebuy said the findings were “simply shocking”.

She added: “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.”

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