If you're not careful, you can get caught in a variety of contract-related pricing issues. Topics of payment terms, most favored customer pricing, contingent pricing, and at-risk fee provisions can cause massive headaches down the road. It's important to understand what these common pitfalls are so you can look out for them during the early stages of contracting and take action to prevent them from occurring.
- If you're not careful, you can get caught…in a variety of contract-related pricing issues.…Topics of pricing, payment terms,…and unfair risk provisions can cause…massive financial issues for you in the future.…It's important to understand what these…common pitfalls are so you can look out for them…during the early stages of contracting…and take action to prevent them from occurring.…Some clients will request most favored customer pricing.…
That's where you'll give them the lowest rate…you offer any other customer, even your…biggest and best clients.…Tell the client you'll offer that…when they reach specific committed levels…of expenditures with your firm.…If they commit to large purchases, great,…but if they're unwilling to commit,…they'll usually concede by removing this provision…since it's pretty ridiculous.…Contingent pricing and at-risk fees…can be fraught with peril.…Basically, you're putting your fees at risk…subject to something happening that may be…beyond your control.…
Clients will claim this is to align incentives.…
- Major and minor contracts
- Registering as a supplier
- Setting pricing, payment, and other contract terms
- Insurance requirements
- Defining your project
- Negotiating the contract
Skill Level Intermediate
1. Start the Contracting Process
Register as a supplier2m 31s
2. Understand Contract Elements
3. Define Your Project
4. Negotiate the Contract
Next steps1m 18s
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