Aroha likes her current supplier, so she doesn’t just change abruptly. She gets in touch with the supplier and asks if they have any suggestions to improve the terms of their trade.
The supplier has recently taken on distribution for other products like coffee accessories and condiments, and is keen to grow their distribution and brand awareness. They suggest a supply agreement with four main elements:
- Aroha pays a special lower price for coffee beans, guaranteed for 3 years.
- The café displays and sells the supplier’s coffee accessories and condiments on a sale or return basis.
- The supplier provides free branded coffee cups and saucers.
- Aroha commits to stick with the supplier for 3 years.
The supply agreement looks good, but Aroha asks her lawyer to look over it. They suggest adding a clause where Aroha is free to end the agreement early if she needs to close or sell the café during the 3-year period. The supplier accepts the change and Aroha signs the agreement, happy to get a better deal without changing her supplier.