What if Customers Require Not to Supply to Its Competitors? Leave a comment

Case

We are in talks with an internationally renowned company. The customer requests a confidentiality agreement, which we think is acceptable. However, the customer requires that we will not do business with three of his competitors in the next year. In fact, we already do business with one of them and still have contracts underway. Although the business volume is not large, it seems inappropriate for stopping the cooperation immediately. What should I do?

Analysis

There seems to be no best answer to the problem. You think his request is unreasonable. But you want his order. Still, you are worried that even if you sign this agreement, you don’t get many orders and you will lose your existing customers.

Even though the customer wants to sign an agreement, its terms can be discussed. Whether the customer can make concessions or not, you should strive for your own interests. Firstly, you should have a general understanding of the customer’s purpose in signing a confidentiality agreement with you. Is it necessary for all of his suppliers? Or he hopes to make your company a major supplier of his products? If this customer wants to establish a long-term relationship with you, I think you can try to meet his requirements. Of course, you can tell this customer that you have already had some cooperation with one of their competitors. But after signing that agreement, you will stop your business with that company. In this way, you can tell your sacrifice and show your determination and sincerity in your company’s cooperation.

Suggestion

If he requires you to have no contact with his competitors, you can ask him to promise an approximate amount of orders. You can see if this quantity is effective enough for you to reject orders from other customers. If the minimum amount cannot be promised, it is unreasonable to ask you to stop contact with other customers. For such a request, you can reject, unless you particularly want to establish business contact with him.

If you think you’re working well with his competitors, you can also try to talk to them. After all, you have a foundation for cooperation with them, and it is easier to communicate. You can see if you can expand the scope of cooperation and establish a stable cooperative relationship with them. If their conditions are better, you have a better choice.

Since the two big companies in the industry want to cooperate with you, it can be seen that your ability are strong. So, you have the right to choose before you sign the agreement. However, after the selection, you must establish a long-term cooperative relationship with the company under the agreement.

Of course, if you have a unique technical advantage and do not worry about not having customers at all, you can be tough in negotiating and reject unreasonable requests of some customers.

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