Entering into a contract with your supplier is a commitment – you want to ensure it’s a good one.

Taking the time to negotiate a solid and detailed contract with your supplier will not only minimise potential disputes and risks but could reduce your overall supply costs as well. Contracts can also improve your relationships with your suppliers as they establish trust and can lead to better service in the long term.

The first thing you should do when considering a contract with a supplier is to make sure they are legitimate by conducting a background check assessing their credibility and trustworthiness. Look for registered suppliers and reviews from other customers.

Before negotiating with your supplier, know the value of the product or service they are offering. Researching market prices and deals offered by competing suppliers will ensure that you’re not being overcharged and give you a better sense of how much wiggle room you have to negotiate.

One negotiation strategy is to find mutually beneficial agreements. Suppliers will be more willing to agree to deals that benefit them. This could include a discount for bulk-buying or upfront payments.

Contracts should include a written outline of each party’s rights and responsibilities to minimise future confusion and disputes. Make sure that key details are clearly stated, including the agreed product/service, the contract’s timeframe, terms of delivery, price and payment plans, termination clauses, dispute resolution terms, and warranty periods.