Manufactures should review suppliers and customers contracts

Do you feel like the meat in the sandwich? Like all of the risk from your supplier and customer contracts flows to you and you often get caught in the middle?

Well, you’re not alone and you can do something about it. The answer is a commercial review (and sometimes a legal review) of your main supplier and customer contracts.

The point of the review is to:

  • Identify the main risks – price, quality, MOQs, availability, warranty, returns, forex, other?
  • Know – to what degree do risks from your supplier contracts stop with you?
  • Know – to what degree do risks from your customer contracts stop with you?
  • Know – how are you currently dealing with those risks? e.g., hedging, keeping more inventory, a big Q&A team
  • Know – what are your current methods of dealing with those risks costing you?
  • Know – what could you conceivably do about reducing your risks, when and how?
  • Empower action – to negotiate your risks away or pass them on or get something in return

Hint: Knowing your market power allows you to be suitably bold in your contract negotiations. In our experience, too many manufacturers underestimate their power and allow themselves to be taken advantage of.

Our top tips for negotiating a better deal right now:

  • Always act with integrity – suppliers and customers will be prepared to do more when trust exists
  • Always be reasonable – don’t ask for things nor refuse things asked of you if it makes no sense to do so
  • Always be clear about what you want and why (and what you are prepared to give to get it)
  • Sharpen up your negotiating skills – read, listen, learn and practice (role play is priceless)
  • Never, ever be ashamed to ask for help. Nobody is good at everything!

BridgePoint Group is ideally placed to assist you. We are manufacturing experts with a deep, real and practical understanding of finance and commercial law.
Call us on 1300 656 141 or email

Not ready to fully commit? Ask us about a pilot program.

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Russell Debney
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