supply

The endless supply: Putting the ‘supple’ in supply contracts

If there’s one thing better than getting a Big Deal, it’s getting a Big Deal that keeps on going.

It’s the Holy Grail for a small business – a customer who keeps coming back. Or  even better – a customer who never goes away because they are tied into your business.

How many SMEs take a hit on their margins for a first deal, in order to get their foot in the door to an ongoing arrangement? Call it a subscription, a service contract or whatever, the deal that gives your business a steady stream of income from a customer – large or small – is a valuable prize.

Supply contracts

Getting that contract – we’re going to call it a supply contract for convenience – is more than just a financial planning win. Properly handled, it’s the way into ever closer relationships with your customers. Some marketing folk talk about embedding your business into your customers’ businesses; others about “sticky” relationships; and others about being the essential partner to the customer – but they all mean the same thing.

And for SMEs, they all require the same thing: flexibility. We’ll say it again, with a capital letter this time: Flexibility.

Give the customer the bespoke treatment

Last week we talked about standardising terms and conditions when you do basically the same deal with lots of different business customers. Now we’re going to flip that on its head, and say that when you’re talking about a supply contract you need to be flexible. The terms of that contract are going to be negotiated specifically for a single customer, whose needs are unique.

When you’re a purchaser, you know that your favourite suppliers are the ones who appreciate that fact, and do their best to engage with you on the basis that your business is unlike any other. And if you’re canny, you’ll remember that your business customers will regard themselves in the same light. One customer’s requirements may differ only slightly from another’s, or they may be worlds apart: in either case, if you are aiming for more than just a one-off sale, you have to be prepared to work on the terms of the deal.

Flexibility doesn’t have to mean inefficiency

Does that mean that you have to start again from scratch every time? Yes and No.

Yes, because you need to treat every customer individually:

  • the substance of the deal – the actual thing you’re going to provide – is going to be tailored to the customer
  • to get that supply contract you need to give them the bespoke treatment
  • everyone likes to feel that they’re not just another customer

No, because there will almost certainly be terms and conditions that you can adapt from other deals:

  • duration (we love this one)
  • delivery
  • termination
  • insurance
  • resolution of disputes
  • the small matter of payment

But you can still make the process more efficient, and concentrate on the deal rather than the pain of drafting. You can make a supply contract that expresses the terms of the deal you have struck, without having to labour over the language.

You can find out a little more about supply contracts, and easily draft one to suit your business by clicking the button below.

Draft your terms of supply on Simplify the Law

It’s worth the effort: in business terms the supply contract is the gift that keeps on giving.

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