31. Letter Negotiating Terms with a Supplier

Harshita Mehta
Procurement Manager
Globex Electronics Pvt. Ltd.
A-7, Sector 62, Noida, Uttar Pradesh 201309
Email: procurement@globexelectronics.com
Phone: +91 120 9876 5432

April 16, 2024

Mr. Suresh Kumar
Sales Manager
Durable Components Co.
B-22, Industrial Area, Phase III
Ghaziabad, Uttar Pradesh 201010

Dear Mr. Kumar,
I hope this letter finds you well. I am writing to you on behalf of Globex Electronics Pvt. Ltd. regarding our ongoing discussions for the supply of electronic components for the upcoming fiscal year. We have been reviewing the proposed terms and pricing provided in your quotation dated April 1, 2024, and while we are keen to continue our partnership with Durable Components Co., there are a few areas where we believe adjustments could lead to a more mutually beneficial agreement.
Volume Discount: Given our forecasted increase in order volume by approximately 20% compared to last year, we propose a discussion on enhanced volume discounts. A revised discount structure would not only acknowledge our growing business but also reinforce our commitment to Durable Components Co. as our primary supplier.
Payment Terms: The current payment terms of 30 days net are somewhat restrictive for our operational cash flow. We would like to negotiate an extension to 45 days net, which we believe will offer us the flexibility to manage our finances more effectively without impacting our timely payments to your company.
Quality Assurance and Returns Policy: While we have been generally satisfied with the quality of components received, we encountered a few instances of defective parts in our last few shipments. We suggest incorporating more stringent quality checks before dispatch and a clearer returns policy for any components that do not meet our specifications or quality standards.
Long-Term Contract Incentives: Lastly, we are open to discussing a long-term contract that could offer stability and predictability to both parties. We believe that securing a 2-year agreement, with predefined terms for annual price reviews, could be advantageous. We would appreciate any incentives or stability clauses that could be included in such an agreement.
We value the relationship between Globex Electronics Pvt. Ltd. and Durable Components Co. and believe that these adjustments could further strengthen our partnership. I am hopeful that we can find common ground on these terms to ensure a continued and prosperous collaboration.
I propose we schedule a meeting to discuss these points in more detail. Please let me know your availability for a meeting next week, either in person or via a conference call.
Thank you for your attention to these matters. I look forward to your response and to continuing our fruitful relationship.
Warm regards,

Harshita Mehta
Procurement Manager
Globex Electronics Pvt. Ltd.