The Bottom Line

Beware the Perils of Free Money in Vendor Negotiations

Posted by Brad Downs on Apr 27, 2017 10:00:00 AM

Beware the perils of free money MFG-613610-edited.jpg

For all procurement executives that oversee vendor relationships, see if this scenario seems familiar: A long-time vendor visits your facility and, unsolicited, offers a contract extension along with attractive incentives; e.g., prebates, rebates, pricing discounts, etc. To date, you’ve enjoyed a good relationship with this partner with no plans to break the contract at expiration, so this provides an opportunity to look like a hero to your facility, bringing in an unexpected windfall to fund other priorities. What could be the downside?

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Topics: Vendors & Contracts