What Is A Volume Purchase Agreement

To achieve new sales, suppliers are urging their sales teams to present highly competitive contracts with very high volume commitments. The volume commitment initiative can be particularly penalizing for existing customers. For example, consider an organization that buys $1.5 million from industrial suppliers from a supplier, which represents 90 per cent of its total expenditures in this category. They are contacted by the supplier and are invited to enter into a contractual contract with an annual commitment of incremental expenses. Contract negotiations are a one-way street and misdirection can harm all parties involved. During negotiations, a supplier will always put pressure on the maximum it believes it will achieve. It is up to you, as a procurement professional, to counter something that you think is more reasonable. This may mean abandoning part of the rebate in return for a lower volume commitment. The key here is to see what works best for your organization. These obligations are normally defined under contracts as a letter of agreement (LOU) or in some other form of sales contract. This Amendment No.

2 to the Volume Purchase Agreement (this „amendment“) dates from November 29, 2005 and is introduced by and between Komag USA (Malaysia) Sdn., a Malaysian company with unlimited liability („Komag“), Komag, Incorporated, a Delaware Corporation („Komag Inc.“) and Western Digital Technologies, Inc., a Delaware corporation (WDC), This volume purchase agreement (this „agreement“) was entered into effect on February 28, 2011 by and between Atheros Technology Ltd., a Bermuda company („Atheros“) and Aruba Networks, Inc., a Delaware company („buyer“). In addition, the supplier is able to increase its turnover exponentially while making much less time, energy and effort compared to acquiring new customers. The customer is unable to commit to the increase in expenses and the supplier refuses to enter into a contract without annual growth. This puts both the buyer and supplier in an unfavorable position – the buyer is forced to find a new supplier and the supplier will probably lose the customer.

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