Wholesale is based on relationships. And relationships are underpinned by trust, writes David Gilroy.
Every single day there are more than 500,000 people in the air at any one time. That’s an astounding statistic and worth reflecting on. Taking a flight to anywhere, be it short or long haul is a giant leap of faith. Besides the obvious concerns of leaving and arriving on time, decent service on board and being reunited with your luggage at your destination there is a range of related issues to consider. Such as. Is the aircraft airworthy? When was it last maintained and checked? Are the pilots competent and in the right state of mind to fly the craft? Are the safety procedures robust? None of us goes through a mental checklist ticking off these (and more) elements or we’d probably never climb on board. We are in the hands of skilled professionals and taking it on trust that our journey will be timely and safe. The point here is trust. Trust is at the core of everything we do day-to-day.
In his book “Sapiens” Yuval Noah Harari describes money as the “most universal and most efficient system of mutual trust ever devised”. He argues that money is a purely mental revolution and a form of shared fiction that enables cooperation among millions of strangers. People who do not know or trust each other can trade effectively because they trust in the currency itself. Harari writes that almost anything can be converted into money, from land to loyalty or knowledge to health, making it a flexible medium of exchange. Over the centuries, money has transitioned from coins to notes, through to electronic payment transfers and now bit currency. It is all premised on the core pillar – trust. As stated on the dollar bill “In God We Trust”. And dollars only have value because billions of people have belief in them.
In our industry we rightly talk a lot about relationships. To be effective they must be underpinned by trust. Every act of buying, selling, or making payment involves an inherent level of uncertainty, risk, and reliance on the behaviour of others. From everyday consumer transactions to complex business-to-business (B2B) contracts, trust enables economic exchange by reducing perceived risk and facilitating cooperation. Without trust, markets would become inefficient, transaction costs would rise, and many commercial relationships would fail to develop or endure. Academics have identified three trust principles. Competence: the belief that the seller or buyer can perform as promised. Integrity: belief that the party will adhere to acceptable principles such as honesty and fairness. Benevolence: belief that the party will not intentionally exploit vulnerabilities.
Trust does not merely influence initial buying decisions; it is crucial for repeat purchasing and long-term customer relationships. Morgan and Hunt’s (1994) commitment–trust theory of relationship marketing argues that trust is a key antecedent of customer commitment. When buyers trust sellers, they are more likely to maintain relationships, tolerate minor service failures, and resist competitive offers.
In commercial markets, repeat buying driven by trust reduces selling costs and stabilises demand. Buyers who trust their suppliers are less likely to switch, even when alternative options appear marginally cheaper, because trust lowers uncertainty and switching costs. From the seller’s perspective, trust is an essential asset. Sellers depend on buyers believing in the accuracy of product claims, pricing fairness, and delivery reliability. Reputation functions as a signal of trustworthiness, particularly in markets where buyers cannot directly observe quality (Spence, 1973). Academic research suggests that sellers with strong reputations benefit from higher margins, faster sales cycles, and more resilient customer relationships (Barney & Hansen, 1994). Conversely, sellers perceived as untrustworthy face increased scrutiny, demands for guarantees, and reliance on formal contracts. In selling relationships, trust can substitute for costly control mechanisms such as strict contractual terms, extensive monitoring, or legal enforcement. While contracts remain important, especially in high-value transactions, trust allows for greater flexibility and adaptation over time (Zaheer, McEvily & Perrone, 1998). For example, trusted suppliers may be allowed to adjust delivery schedules or specifications informally, whereas low-trust relationships require formal renegotiation. This flexibility can be a significant competitive advantage in dynamic markets. I have found in my own business dealings that formal contracts, letters of engagement and even non-disclosure agreements are virtually useless when trust has broken down. The only recourse left is to litigate and that becomes costly, time consuming with no certainty of a positive outcome.
Payment is one of the most trust-sensitive stages of a commercial transaction. Buyers risk losing funds without receiving goods or services, while sellers risk delivering without receiving payment. Trust is therefore central to determining payment terms, timing, and methods. In many commercial relationships, especially B2B, trust determines whether transactions occur on a prepayment, cash-on-delivery, or credit basis. Credit arrangements require a high degree of trust, as sellers accept delayed payment based on expectations of buyer reliability (Smith, 1987). Trade credit is one of the most common manifestations of trust in commercial relationships. Sellers extend credit to buyers they believe will pay on time and honour obligations. Empirical studies show that trust and relationship duration significantly influence the availability and terms of trade credit (Deloof & La Rocca, 2015). Late payments or defaults not only strain cash flow but also erode trust, often leading to stricter payment terms or termination of the relationship. Once payment trust is damaged, rebuilding it can be difficult and time-consuming. I have always been wary of extending payment or trade terms to prospective customers as a method of acquisition. It invariably leads to problems which can result in debt, damaging the relationship and losing the customer.
Trust is strengthened by delivering products, services and payments as this builds credibility over time. Clear pricing, honest communication and accurate invoicing reduces misunderstandings. Equitable treatment in negotiations, dispute resolution and payment time reinforces integrity-based trust. Responding responsibly to failures helps preserve trust. Secure payment systems and clear contractual frameworks support trust, particularly in early-stage relationships. Flagging up payment or delivery problems in advance is a trust-based right thing to do. Trust is built cumulatively over time but can be lost rapidly. I’m seeing my dentist soon and I’m trusting him to be gentle.
David Gilroy, Store Excel
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