If you're considering hiring an independent purchasing agent, you should first understand the differences between an exclusive and nonexclusive agreement. Find out when it makes sense to use a purchasing agent that's nonexclusive.
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updated September 1, 2023 · 3min read
The costs and timely delivery of the resources needed to produce goods and services can have a vital impact on a business's bottom line. A purchasing agent plays an important role in this regard, as they are responsible for managing your business's relationship with your suppliers and vendors.
Take a look at your company goals, cash flow, and your own workload to determine if you need the services of an independent purchasing agent. If that's the case, one important decision you need to make is whether you should contract for an exclusive agent or one who will work with you nonexclusively.
When bringing an independent purchasing agent onto your business team, there are two types of agreements you need to consider: exclusive and nonexclusive.
With an exclusive purchasing agent agreement, you agree that there is only one purchasing agent working to obtain specific resources for your company. A nonexclusive purchasing agent agreement, on the other hand, permits you to contract with other purchasing agents for the same goods and services.
While your specific needs may vary, you generally benefit from signing a nonexclusive agreement if you anticipate that your purchasing needs might exceed the abilities of a sole purchasing agent at any time during the duration of the agreement.
For example, the following potential situations might increase your purchasing requirements:
In other words, if you foresee that a sole purchasing agent may not be sufficient to meet your purchasing needs at a point in time covered by the term of the contract, signing a nonexclusive agreement is likely your best option.
Whether your purchasing agent signs on with you exclusively or nonexclusively, it's important for your business to use a well-drafted agreement to outline the parameters of the relationship between the two parties.
In general, a nonexclusive purchasing agent agreement should include clauses covering the following:
As with any business contract, your purchasing agent agreement should also include standard legal clauses to protect the interests of both parties, such as a termination clause and a dispute resolution clause.
Deciding to hire an independent purchasing agent is an important step for any small business. In most cases, it means your hard work has paid off and you've grown big enough to warrant having one or more people handling your purchasing needs.
by Belle Wong, J.D.
Belle Wong, is a freelance writer specializing in small business, personal finance, banking, and tech/SAAS. She ...
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