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My suppliers are taking advantage of me: how do I optimise procurement for my business?

Justin Fung, Avant Law - Partner, Head of Commercial & Corporate | General Manager

If you suspect you are not getting the best deal from your current suppliers, perhaps it's time  for you to consider taking a more formal approach to procurement in your business.

Consider contracting on your terms

Setting up a competitive process where you regularly call for tenders or expressions of interest for the supply of goods and services will put you in the driver's seat as far a price is concerned.

If you take care to include your standard terms in your request, you also get to control the basis for the contract rather than having to review and if necessary, negotiate changes to the supplier's standard terms.

And keep suppliers on their toes

It's also a good idea to consider whether it will be appropriate to include a fixed term of say two or three years in your purchase terms so that you have a future milestone to revisit these relationships on a regular basis.

One of the most annoying and frankly insulting things as a customer is when the realisation dawns that your long-standing supplier is not looking after your commercial relationship with them. You may notice that you are receiving news of great discounts or free trials for new customers, but there's nothing on offer for the loyal ones like you.

If you are a good paying customer with a sizeable account and there is a competitive market for the supply of the goods and services, you should seriously consider making things a bit more competitive, with the added advantage of contracting on your own terms. Your legal advisors can help you to set this up, providing templates for your requests and for your purchasing terms.

We can help you

If you have any questions, or would like more information about how we can assist you or your practice, please call 1800 867 113, or to organise a confidential discussion at a time that suits you, please click here 

About the author

Justin Fung

Justin Fung is a lawyer and the Head of Commercial and Corporate in our Avant Law team. Justin has over 15 years’ experience advising in commercial, corporate, risk, compliance, governance, regulatory enforcement and dispute resolution and advises clients in the private and public sectors. He was previously General Counsel of a national allied health group of companies and held Group and Divisional Head of Legal roles in a major ASX-listed health company, whose operations covered medical and dental centres, allied health, pathology, diagnostic imaging, assisted reproductive technologies, day surgeries and hospitals. Prior to these in-house legal roles, Justin was an Executive Counsel with the global law firm Herbert Smith Freehills where he practiced for over 10 years.


Disclaimers

The information in this article does not constitute legal advice or other professional advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of this content. The information in this article is current to 15 July 2022.  Legal services are provided by Avant Law.  Liability limited by a scheme approved under Professional Standards Legislation. Legal practitioners employed by Avant Law Pty Limited are members of the scheme. © Avant Mutual Group Limited 2024

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