The MHEDA Journal - First Quarter, 2014 - (Page 25)

ASK yOuR ExPErt ADViCE bOARD Q "We have been seeing more purchase orders from customers lately that have ridiculous terms and conditions. A lot take the responsibility of an accident, etc., off of them and on to us vendors - even if we had nothing to do with it. These purchase orders are coming from large corporations. Some of the terms are not actually on the PO. You have to go to the website to download them. How are you handling this? Do you walk away?" Michelle Cooper, Sales Department Manager, Lift Truck Sales & Services, Inc., Knoxville, TN Mark Milovich, President Lift Atlanta, Inc. Decatur, GA A This is a constant and ongoing battle, and these days it seems to be ever more prevalent. Sometimes it is a scary proposition to "hold your own" against large corporations for fear of losing business, and inevitably some customers will take the stand of "it's our way or no way." When it comes to the protection of your own dealership, you can never be too careful, and sometimes you have to be downright selfish. It's OK to give in on some things, maybe an extra week or so on payment terms, but when it comes to liability, and specifically indemnification, you can never be too careful. On such issues, we hold our ground fiercely. Under no circumstances will we agree to an indemnification where my company is asked to forfeit our rights, or hold a customer harmless for their negligence. We will only hold harmless on the direct dealings we have with the end-user that are within our control. There is no order big enough or profit margin large enough to take on the risk you mention. We have lost some orders due to our stance, yet we find more and more these companies just want to see what they can get away with, and a with a little resistance, will negotiate down their terms. One case in particular - a few years ago we received such a contract as you detail from a large, well-known national retailer. Our initial response was "no," we did not agree to their terms and spelled out the specific paragraphs we would not accept. They came back with an "it's this or nothing" attitude. We said, thanks but no thanks, and walked. About six months later they asked us to reconsider - my response was our position had not changed. By the end of it, and about a year later, we had them re-write about 90 percent of what we were not comfortable with, and we secured the business. And this was from a company that has a very hard reputation of "our way or no business," so it can be done. The other variable not to overlook  is your sales staff. Under no circumstances, in our opinion, should sales staff be permitted to negotiate sales terms. If a customer wants something other than what our standard terms are, it must have approval from upper management prior to us accepting the order. There is just too much liability out there and you have to really reign in sales staff from making agreements on terms that are not acceptable. It's your company, and it has to be defended as strongly as you would protect your own child. Is an order - any order - worth being dragged into court over? Even if the event in the terms you are being asked to accept has never happened before and has a remote chance of happening ever, there is always a first time! Don't be afraid to hold your ground and defend your company. And always ask and insist on a reciprocation of the indemnity clause if it is not clearly spelled out. Scott Lee, President Conveyor Solutions, Inc. Schaumburg, IL A I could spend hours talking about this. The simple answer is, YES. As companies continue to look at ways to cut costs, mitigating risk is now high on the pecking list. They feel if they move the liability to a third party, their ultimate cost of doing business will be lower. However, what they don't realize is they will still be named in a lawsuit, and have to defend it, etc. The only ones making money (which in turn costs the company money) are the attorneys who write, review, and negotiate over the terms. We accept risk in some cases (when we know we have complete control of the outcome) and turn down jobs when there are too many variables. We will also never accept a PO when the terms state we may be liable for costs associated with lost production. the MHEDA Journal | First Quar ter 2 014 25

Table of Contents for the Digital Edition of The MHEDA Journal - First Quarter, 2014

President’s Perspective
From the Desk of Liz Richards
Editor’s Note
MHEDA’s 2014 Board of Directors and MBOA
Ask Your Board
MHEDA Member Profile
At Work
Distributor Forecast
Supplier Forecast
Manufacturer Forecast
Material Handling Forecast
Conveyor Forecast
Industrial Trucks Forecast
MHEDA: 60 Years of Moving Members Forward
Don Chance Retires From NMHG
Convention Preview
The New and Improved 2014 MHEDA Disc Report
New Members
Spotlight on Association News
MHEDA University Calendar
MHEDA Milestones
Index of Advertisers by Product Category

The MHEDA Journal - First Quarter, 2014

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