What is a Preferred Vendor? Deffinition, Qualities, Benefits

If you are planning a wedding and have reserved a venue, you have likely been provided with a list of recommended vendors, including photographers, musicians, DJs, and florists.

This is commonly included with your contract, menu options, and other documents as a “preferred vendor list.” Unlike the other items, however, this list is neither desired nor required. 

What is a Preferred Vendor?

A preferred vendor is a vendor who has been vetted and approved by a business. When a company requires services, it contacts these vendors first, so being on the preferred list can put a company in a powerful position.

In general, only the largest corporations and institutions use preferred suppliers, and individuals must apply to join the program.

What is a Preferred Vendor?

A corporation looks for specific qualities in a potential supplier. Reputation in the industry is essential, as are factors such as on-time performance, competitive pricing, and superior products and services.

In addition, vendors must be appropriately licensed, bonded, and insured, where applicable, and provide sufficient proof of certification and experience in their respective fields.

Additionally, a vendor’s business practices may be significant. A company that seeks to promote sustainability, for instance, will only collaborate with suppliers whose environmental practices have been evaluated and whose commitment to environmental stewardship has been demonstrated. Similarly, a religious organization may seek out vendors who share its religious principles.

Moreover, many companies anticipate concessions from preferred suppliers. By adding a company to a preferred list, a business indicates that this will be its primary source for products and services, and that it will not look elsewhere unless a vendor cannot meet its requirements.

As a result, the corporation may request discounts and other perks from the vendor, as it views itself as a very important client.

A preferred vendor agreement is a contract between a business and a preferred vendor that specifies the terms of their partnership.

Having such a contract can be advantageous, as it ensures that all parties are aware of their responsibilities and can establish the framework for legal action in the event of a dispute. The terms of this contract should be thoroughly reviewed by both parties to avoid any unpleasant surprises.

Frequently, the procurement department manages relationships with preferred vendors and distributes a list of vendors to other departments. People are urged to first determine if a seller on this list offers the desired product or service before considering alternatives.

What Qualities Make A Vendor Preferred?

Diverse opinions and perspectives exist within the industry regarding the characteristics of a preferred provider. Most will assert that they must be reliable. Clearly, they must be punctual, organized, and have a positive attitude.

However, they must be willing to go the extra mile to make each occasion and event exceptional.

What is a Preferred Vendor?

According to the majority of venues, on the day of your event, working with recommended vendors is typically straightforward. In addition to providing superior service, the best vendors also have a distinct and engaging presence. Remember that your venue must also spend a full day with these vendors.

A preferred supplier has been established. There will be no last-minute confusion or omission of dates and times. They have repeatedly demonstrated their dependability and trustworthiness, event after event.

A recommended provider is capable of carrying out their role in your special event with professionalism and efficiency.

Most likely, a preferred vendor on your venue’s list will align with your budget and aesthetic preferences. Your budget and preferences are likely comparable to those of many brides and grooms who have passed through the venue’s doors.

Why Should I Hire the Preferred Vendor?

Hiring a recommended vendor can save you countless hours of research time. You will need to sort through hundreds of sellers if you start from scratch. You will quickly eliminate options that have low ratings, are out of your price range, or do not match your personal preferences, but you will still have a vast selection of viable alternatives.

If you work from a list of preferred vendors, you will begin at the midpoint of the mountain rather than at the base and work your way up. So much of the preparatory work has already been performed.

Obviously, you are not required to choose a preferred vendor, but the list is a good starting point for your search.

Benefits of Using Preferred Vendors

Purchasing and Strategic Sourcing have awarded Preferred Vendors a contract to be utilized by all departments and schools. We strongly suggest that you utilize Preferred Vendors.

Maximizes overall best value to the University

Preferred Vendors offer the University the best overall value based on pricing, delivery capabilities, quality, prior performance, training, financial stability, ease of ordering, etc.

Ease of ordering

Ordering from Preferred Vendors, especially those with catalogs enabled in the iBuyNU marketplace and reduced transaction fees, is more convenient (total costs of acquisition).

Improved productivity and efficiency of department personnel

Purchasing and Strategic Sourcing have already conducted this activity, so departments/schools are not required to solicit alternative bids when utilizing a Preferred Vendor.

Moreover, terms and conditions have been developed. Allows departments and schools to focus more on their primary responsibilities, which include teaching, research, and administrative tasks.

What is a Preferred Vendor?

Savings due to consolidating purchasing power and leveraging volume

Utilization consolidation increases volume, thereby encouraging providers to offer the most competitive pricing.

The price listed on contracts is the amount that departments/schools actually pay. All savings accrue to the department or institution placing the order. If prices are ever changed, everyone will benefit.

Reduced risk due to improved contract administration

Because these service providers have a stronger commitment to the University, their service standards are higher.

Purchasing & Strategic Sourcing monitors the performance of Preferred Vendors to ensure compliance with contract terms.

Purchasing and Strategic Sourcing possesses considerable sway and is able to hold these suppliers more accountable for delivering products and services that meet the needs of departments/schools.

If expectations are not met, Purchasing and Strategic Sourcing can help resolve disputes.

Improved access to information

Leading to further improved contracts.

Better management control and more automated adherence to policy

Reduces ethical concerns regarding merchants you are purchasing from.

Should I Use My Wedding Venue’s Preferred Vendor List?

Numerous venues provide couples with a list of “recommended vendors” that may include caterers, florists, DJs, officiants, and bartenders, among others.

Some brides and grooms are ecstatic about the list, as it may save them hours of time spent researching reliable vendors, while others may be confused, particularly if they had planned to bring in their own vendors. This situation raises the crucial question: Should I choose the recommended wedding vendors?

There are many reasons why venues offer preferred vendors. First, they have likely dealt with this professional on multiple occasions and have found that their staff consistently provides superior service.

In proposing the florist, band, or caterer, the venue will not be concerned with unprofessional behavior or arduous cleanup responsibilities. Money may also play a significant role in determining preferred providers.

Some vendors may pay to be included on the list, whereas others may pay commissions for each wedding. Both the vendor and the venue benefit financially, as the vendor receives improved service and the venue receives more cash.

Couples may be hesitant to book preferred vendors after reading this information. The first step in selecting a venue is to determine its restrictions and limitations. As implied by the term, preferred vendors are typically suggested businesses that you are not required to utilize.

However, some venues require couples to hire all of their professionals from a predetermined list; in fact, the couple may be contractually obligated to do so by signing a contract with the venue.

Alternately, a venue may charge a fee for the use of an external provider, or it may impose certain restrictions (i.e. the supplier must be insured).

Always read the fine print and think twice before reserving a venue with stringent vendor regulations; there’s no guarantee you’ll like the florist’s signature design or the band’s standard set list.

What is a Preferred Vendor?

The next step is to conduct Internet research. If the recommended company has received multiple positive reviews, fits the theme of your wedding, and you feel comfortable after meeting with or speaking with them, then you should proceed with the booking.

Consider searching elsewhere if this is the case, even if it means selecting a new location with less stringent vendor requirements. Keep in mind that this is your special day, and nothing should interfere with your perfect wedding!

What is a Preferred Vendor Agreement?

A preferred vendor agreement is a formal business contract that establishes the terms and conditions between a company and the vendor that it will primarily use to obtain specific services. This exclusivity typically allows a business to receive benefits such as lower prices, while the vendor enjoys the security of a steady job with a well-known company.

Preferred vendor agreements can be advantageous because they allow organizations and vendors to determine their respective obligations, payment terms, price, and cancellation procedures.

Common Sections in Preferred Vendor Agreements

The common sections found in Preferred Vendor Agreements are listed below. These sections are linked to the sample contract provided for your review below.

  • General Purpose and Scope
  • Obligations of ChemRock
  • Obligations of Green Field
  • Pricing
  • Term and Early Termination
  • Confidentiality
  • Indemnification
  • Arbitration of Disputes
  • Notices
  • Assignment
  • Force Majeure
  • General Provisions

What If You’re Not on the List?

You may wonder how you could be added to a company’s list of preferred vendors if you are not already on it. You are required to answer the following questions:

What channels should I use to reach the appropriate individuals?

Who should I contact?

An excellent starting point is a connection within the organization. However, you should not dive in headfirst. You must first identify the organization’s requirements.

If you know that a company already has a preferred vendor contract in place with another party, you should be prepared to impress your potential client if you want to secure a contract with him.

When scheduling a meeting with a potential client, you should be familiar with the following facts about their company:

How they plan their events

Their department’s organizational structure for meetings

Expect to conduct extensive business research. This homework may be tedious and unpleasant, but it is required if you wish to win the contract.

Transparency and Preferred Vendor Contracts

Conference organizers frequently use preferred vendor agreements, which have advantages and disadvantages. For example, venues and vendors frequently conceal details of their commercial agreements. Frequently, there is a lack of transparency with clients.

If the company is adamant about keeping its business arrangements secret, it may engage in shady behavior. Consequently, the end user, who is frequently the meeting planner, will suffer.

If the consumer is restricted to a small number of suppliers, he may receive subpar service and pay more. Vendors and venues with a monopoly on the market may not feel obligated to provide the best service possible if there is no competition.

The manner in which event professionals are frequently offered preferred vendor agreements is one of its worst characteristics. For example, venues often embellish online or printed descriptions of their vendors to make them appear flawless and exceptional.

They might use words like “outstanding,” “hand-selected,” or “exceptional” to describe their products. Unfortunately, the results can be unsatisfactory when event and meeting professionals and clients believe these statements without verifying their veracity.

However, due to the following factors, these experts may be willing to accept these agreements:

  • The customer is adamant on the venue.
  • The location is perfect.
  • The venue’s location is advantageous.

You may attempt to use your own vendor as a customer, but this may be difficult or prohibitively expensive. In this situation, you may be faced with a number of challenging options, none of which appear advantageous.

What is a Preferred Vendor?

The best action you can take is to advocate for yourself and demand to know how the company selects its preferred suppliers. Insist upon thoroughly reviewing the contracts and paying close attention to the language.

In a perfect world, the arena would be transparent. Because the preferred vendor has paid for the privilege, the venue’s representative would inform you that you are obligated to use them. However, you should not expect this level of candor.

There are benefits to being included on a list of preferred vendors. Expect to conduct research to determine the steps necessary to secure this contract.

Preferred Vendor Agreement Sample

Exhibit 10.14

CERTAIN MATERIAL (INDICATED BY THREE ASTERISKS) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Preferred Supplier Agreement

This Preferred Supplier Agreement (this “Agreement”) is entered into effective as of the     10     day of February, 2012 (the “Effective Date”), by and between ChemRock Technologies, L.L.C., a Texas limited liability company with a principal business office in Lafayette, Louisiana (“ChemRock”), and Green Field Energy Services, Inc., a Delaware corporation with a principal business office in Lafayette, Louisiana (“Green Field”), who are sometimes also referred to, each individually, as a “party,” and collectively, as the “parties” to this Agreement.

Recitals

ChemRock is in the business of developing, manufacturing, blending, and selling chemicals used in various applications, including without limitation applications used in the exploration and production of oil and gas, and in industrial markets.

Green Field is in the business of, among other things, providing pumping services, field services, and the sales and supply of chemicals to oil and gas production operators and oil and gas service companies.

ChemRock and Green Field have agreed that ChemRock will be Green Field’s preferred supplier for the stimulation and well fracture chemical products (or categories of products) listed on Schedule A, attached to and made a part of this Agreement (the “Products”), on the terms and conditions set forth below.

Agreement

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, the parties agree as follows:

1. General Purpose and Scope

1.1 Preferred Supplier. Except as otherwise set forth in this Agreement, during the Term of this Agreement, ChemRock will be Green Field’s preferred supplier for the stimulation and well fracture chemical Products (or categories of Products) listed on Schedule A, for use by Green Field or for sale to its customers in the Territory. The parties may, by written agreement, amend or modify Schedule A to add or delete Products from time-to-time.

1.2 Green Field Product Logo. All Products purchased by Green Field for resale under this Agreement will be sold by Green Field to its customers under the Green Field logo.

1.3 Territory. The “Territory” covered by this Agreement means and includes the United States and Canada.

2. Obligations of ChemRock

2.1 Supply of Products. During the Term of this Agreement, ChemRock will use good faith, reasonable efforts to supply to Green Field all Products needed by Green Field to service its customers in the Territory on a timely basis. Upon receipt of a purchase order for Products from Green Field, ChemRock will arrange for the production or supply of the Products and will make the Products available to Green Field for pickup at ChemRock’s blending facility or at any other point of manufacturing or supply point designated by Green Field and ChemRock from time-to-time (the “Delivery Points”). Title to the Products and the risk of loss will pass to Green Field when the Products are picked up by Green Field or its designees at the Delivery Points.

*** Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Conclusion

Couples may be hesitant to book preferred vendors after reading this information. The first step in selecting a venue is to determine its restrictions and limitations. As implied by the term, preferred vendors are typically suggested businesses that you are not required to utilize.

However, some venues require couples to hire all of their professionals from a predetermined list; in fact, the couple may be contractually obligated to do so by signing a contract with the venue.

Alternately, a venue may charge a fee for the use of an external provider, or it may impose certain restrictions (i.e. the supplier must be insured).

What is a Preferred Vendor?

Always read the fine print and think twice before reserving a venue with stringent vendor regulations; there’s no guarantee you’ll like the florist’s signature design or the band’s standard set list.

The next step is to conduct Internet research. If the recommended company has received multiple positive reviews, fits the theme of your wedding, and you feel comfortable after meeting with or speaking with them, then you should proceed with the booking.

Consider searching elsewhere if this is the case, even if it means selecting a new location with less stringent vendor requirements. Keep in mind that this is your special day, and nothing should prevent you from having the wedding of your dreams!

faq

7 Things to Consider When Choosing A Vendor
  1. Price. Your goal should always be to get the maximum value for the lowest possible cost. …
  2. Quality of Product or Service. …
  3. Check References. …
  4. Customer Service. …
  5. Ethics and Integrity of The Vendor. …
  6. Professional Employees. …
  7. Recommendations from Others. …
  8. Existing Relationships.
Buyer and Seller agree that a “Preferred Vendor” is a vendor to whom efforts are made to give the first opportunity to fill outsourcing needs and to whom efforts to refer business is made, provided that such vendor maintains high quality service to its customers. Preferred Vendor Status.
We generally keep one or more suppliers for a particular Item so that we can prefer to purchase that item from thsese prefered vendors. So you can have the List of Prefered vendors attached in Item Master Data’s Purchasing Tab and it is beneficial to maintain as you can auto craete the purchase quotations.
A vendor, also known as a supplier, is an individual or company that sells goods or services to someone else in the economic production chain.
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