This contract tip is about arguments that vendors make to justify their negotiating positions.
Vendors have a tough lot.
They sell their product for a competitive market price. They need to keep costs low to make a profit.
After all, that's why they are in business. But they face potential liability at every turn.
Many vendors try to limit that liability in their contracts as much as possible to preserve their profit margins and stay in business.
Here are five common arguments that I see vendors make during negotiations:
1. I'm not getting paid enough to take on all the risk for this deal.
2. My profit margin is not enough to justify this kind of exposure.
3. I have product risk with my suppliers. I can't take on your risk too.
4. High limits in the contract will encourage you to sue me if anything goes wrong.
5. Business is risky. You have to share that risk.
What other arguments would you add to this list?
