A vendor agreement is the one-page deal a store makes with each maker it buys from: what you buy and at what wholesale price, how orders and deliveries work, when you pay, and what happens when something goes wrong. For a small store carrying local sauces, cookies and coffee, the clauses that matter most are the ones a big distributor handles for you: products arriving with enough shelf life left and a credit for anything that dates out; the maker holding the licenses its state requires to sell to a store, with a copy on file; labels with ingredients and allergens; a lot code on every unit and a promise to call you within a day about any recall; and product liability insurance naming the store. Add the term and how either side ends it. Wholesale is different from consignment, where you pay only when it sells. Below are the clauses, an example, and a free template with the agreement, a vendor list with margins, and a compliance check that flags missing paperwork.
The short version
- A vendor agreement sets products, wholesale prices, ordering, delivery and payment.
- Prices hold for a stated time, with notice before a change.
- Products arrive with enough shelf life, and dated-out stock is credited.
- The maker holds the licenses its state requires to sell to a store, with a copy on file.
- Every unit is labeled and carries a lot code; recalls are reported within a day.
- The maker carries product liability insurance naming the store.
- Either side can end it with written notice.
- TaroStack keeps local makers as suppliers, with lots and dates on what arrives. More below.
The clauses
| Clause | What it covers |
|---|---|
| Products and prices | Products, packs, wholesale prices; how long prices hold; notice before a change |
| Ordering and delivery | How and when you order; delivery day; a delivery note with lot codes |
| Payment | On delivery, net 15 or net 30 |
| Dates | Minimum shelf life on arrival; credit for unsold product that dates out |
| Licenses and labels | The licenses the maker's state requires; labels with ingredients, allergens, net weight, name and address |
| Lot codes and recalls | A lot code on each unit; notice of any recall within a day; refund or replacement |
| Insurance | Product liability insurance, with the store named as an additional insured |
| Display | The store sets placement and shelf price |
| Term and ending | A year, renewing; written notice to end |
Home kitchen products can only go to a store where the maker's state allows it, so the license line matters; more in cottage food license. The consignment version is consignment agreement template, and shelf life on arrival is in minimum remaining shelf life. This is general information, not legal advice.
An example: a Memphis corner store
Bluff City Market, the made-up neighborhood store in Memphis, Tennessee, I use in these examples, carries four local makers' products on one wholesale agreement each:
| Vendor | Product | Wholesale | Shelf price | Margin | Terms |
|---|---|---|---|---|---|
| Beale Smoke Co. | Barbecue sauce, 16 oz | $5.50 | $9.99 | 44.9% | Net 15 |
| Wolf River Hot Sauce | Hot sauce, 5 oz | $4.25 | $7.99 | 46.8% | Net 15 |
| Overton Cookie Co. | Cookies, 6-pack | $4.00 | $7.49 | 46.6% | On delivery |
| Mud Island Roasters | Coffee, 12 oz bag | $9.00 | $15.99 | 43.7% | Net 15 |
The compliance check caught two things: the cookie maker had no license copy on file and no lot codes on the packs, and the hot sauce maker's insurance certificate runs out November 30. The cookies stay off the shelf until both are fixed. What the store's local shelf earns is in convenience store business plan.
Get the template
Download the vendor agreement template. Three sheets: the agreement, each clause filled in for the example, to change to your words; a vendor list with wholesale and shelf prices, the margin, terms and weekly units; and a compliance check of license, insurance date, labels and lot codes that turns red when anything is missing or insurance runs out within 30 days. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
Four makers delivering on different days, each with its own lot codes and dates, and a recall call that has to be answered with which cases are still on the shelf: the agreement says what should happen; it doesn't track the stock.
How TaroStack does it
TaroStack keeps local makers as suppliers, with lots and dates on what arrives.
Makers as suppliers. Each maker is a supplier with its prices, lead time and minimum, and each delivery is received against them, with its lot and date.
Dates, oldest first. Local products go out oldest first, and an alert comes before a date runs out, so you can ask for the credit in time.
Recalls. A lot on hold is kept out of what can be sold, and stock by lot shows what's still on the shelf.
| The job | Notebook | In TaroStack |
|---|---|---|
| What each maker charges | The invoice | Supplier prices, with price creep |
| Cookies about to date out | Found on the shelf | An alert before the date |
| A maker's recall | Check the shelf | Stock by lot, and a hold |
Suppliers, receiving, lots, expiry and holds are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.