Vendor Contract Negotiation
Advanced English listening exercise ยท Negotiations
Transcript
Buyer: We are very interested in continuing our partnership, but we need to address some terms. The current pricing of twelve dollars per unit is above our budget. Supplier: I understand. What range are you looking at? Buyer: Our target price is ten dollars per unit for an order of fifty thousand units annually. In return, we can offer a three-year commitment instead of the current annual renewal. Supplier: A three-year commitment is appealing. What about delivery terms? Buyer: Currently, lead time is six weeks, which creates inventory challenges. Could you reduce it to four weeks? Supplier: Four weeks is tight, but we can manage it for orders placed at least two months in advance. Buyer: That works. We would also like a penalty clause for late deliveries, set at two percent per week of delay. Supplier: We can agree to that. Let me prepare a revised proposal.
Comprehension questions
- What is the target price per unit?
- What lead time reduction is requested?
- What is the buyer's commitment period they are proposing?
- How many units does the buyer intend to order annually?
- What delivery lead time does the buyer currently have?