It is not good for suppliers to allow no collateral. But they are being forced into. That is what the market has naturally created for supplier. Think about thi

It is not good for suppliers to allow no collateral. But they are being forced into. That is what the market has naturally created for supplier. Think about this, a company produce a widget to sell to consumer. Before they can sell, they have to "invest". If the entire world that producer is the one to produce, then consumer can put up the deposit which in this case act a bit like collateral (though more of partial payment). Now, imagine ice cream producer ask you to pay up first, even if you like that brand, you probably will just walk to another seller who offer you the same thing but without the pay first. Now imagine there are many producers but only one of you. Every producers will automatically waive the deposit or collateral to get you to buy from them. This has always been the case in suppliers world. In some instance, supplier able to get collateral but in the form of insurance. That gets very complicated and I feel like it would be harder for you to relate unless you have some finance or business background.