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Purchase Order and terms and conditions.

Hi,

We are a small start up company. We tried to sell our product to a couple of big corporations. We gave them the contract and they proceed the same way. First, ask for a quote where there is no line to sign. Second create a purchase order with ridiculous terms and conditions that has nothing to do with the terms that I created and they expect me to accept them. What can I do?

Filed under: Licensing

2 answers • 10 years ago

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Dylan Gallagher, Finance Specialist (problem solver) answered:

Large corporations will have their own process and procedure for purchase orders and if you want to do business with them this will be what you can expect. If you feel that the terms and conditions that big corporations are giving you are not acceptable for your small company then your alternative option is to not sell to big corporations and to focus on smaller companies. Something to keep in mind is that your purchase order terms and conditions may not be perfect yet. Until you have processed hundreds of them you will not know if your terms and conditions actually work. As you fill orders or experience problems filling orders you will want to change your purchase orders to cover this.

Working with big corporations can be like drinking from a firehose and they have structure in place for a reason. As they have grown they have developed processes to protect themselves and to make sure they are always in control. Once you are confident that your company has a good process for delivering its product you won't need to be concerned about the ridiculous terms and conditions that big companies give you because it will be irrelevant. You might be frustrated right now because they have not accepted your terms and conditions which are probably based on how you want to do business. Remember "the customer is always right" or at least you should try to remember that and maybe change how you work with big corporations who don't care about your process and only care about their's.

Schedule a call if you want to chat about this further. This is a great opportunity that you have uncovered to make your business better and more profitable - you just don't realize it yet.

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Madhu Singh, Attorney, MBA, Business and Intellectual Property Attorney answered:

This is the case of the little fish. Most corporates have a procurement system and you have to work with them. The little fish generally has to given and work with the bigger company's system. Most bigger companies have a standard vendor, PO, procurement system and you can't do a whole lot with it. There are some minor ways to request amended terms but this requires some more follow up discussion. Meaning I would want to get a sense of what the 'ridiculous terms' look like and see what can be countered.

Let me know if you want to chat more,
Thanks,
Madhu

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