of total procurement spend recovered by companies that actively manage vendor contracts through renegotiation.
The Problem
The original terms were reasonable when you signed them. The problem is that they were never revisited, and the market, your volume, and your leverage have all changed since then.
Contracts with annual price escalation built in that have never been challenged at renewal. A 3% annual increase compounding across five vendors over three years is a material margin drain with no corresponding value increase.
MOQs set to benefit the vendor's production economics, not your inventory turnover. Overbuying relative to actual sell-through rate creates dead stock, markdown costs, and working capital tied up in slow inventory.
Net 30 or tighter terms when the business qualifies for Net 60 or better based on purchase volume and payment history. Cash flow impact of 30 additional days payable across a purchasing book is significant.
Many vendor agreements include volume rebate programs that require the retailer to submit a claim. Without a tracking process, earned rebates go unclaimed indefinitely, effectively a discount you paid for but never received.
Single-vendor exclusivity on commodity inputs preventing price shopping. Arrangements signed when the vendor was competitive but never revisited as the market shifted or new suppliers emerged.
Shipping costs absorbed by the retailer that are negotiable at volume thresholds already exceeded. Freight-included pricing available from the same vendor, never requested because the original terms were never reviewed.
Before vs. After
The Diagnostic
All active vendor contracts and auto-renewal dates
Price escalation clauses and historical increases
Minimum order quantities vs. actual sell-through
Payment terms and early payment discount availability
Volume rebate programs and claim history
Freight and delivery cost responsibility
The Process
What We Find
Unlike operational changes, contract improvements require no capital investment, only documentation, negotiation, and a review cadence that most retailers have never had in place.
Find Out What Your Vendor Terms Are Costing YouGet Started
Tell us your vendor count and purchasing volume. We will identify where terms can be improved and what recovery looks like before you commit to anything.
What to expect:
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