Your Supplier Just Sold Your Product on Amazon. Here's What You Missed.

That WeChat thread you've been using to manage your supplier relationship, it's not a contract. Those handshake deals, verbal agreements, and we've always done it this way. Arrangements, they're not protecting you. And the first time something goes wrong, a quality issue, a missed shipment, a payment dispute, you're going to realize that messages don't hold up. I'm Lara. I've spent 17 years on supply chain, and I've seen what happens when supplier relationships don't have documentation. I've Watched founders lose 30k on defective inventory they couldn't return because there was no quality clause. I've seen brands get blindsided by price increases because nothing was locked in writing. I've seen suppliers sell a founder's exact product design on Amazon because there was no IP protection. None of these suppliers were bad people. There was just no agreement about what. What was supposed to happen. In the next 10 minutes, I'm going to walk you through the eight sections. Every supplier agreement needs what they are, why they matter, and exactly what to include. No legal jargon, no lawyer required. By the end, you'll have everything you need to create a simple, clear agreement that protects both you and your supplier. Before we dive in, I want to be clear about something. A supplier agreement isn't about distrust, it's about clarity. Both parties knowing exactly what's expected prevents 90% of disputes before they happen. Good suppliers want clear agreements too, because it protects them as much as it protects you. This isn't adversarial, it's professional. Section one, Product specification. What exactly are you ordering? This sounds obvious, but I've seen agreements that just say product X as discussed. That's not a spec, that's a recipe for arguments. Your product spec section needs material and components, not cotton. What weight, what blend, what origin, dimension and tolerance. Exact measurement with acceptable variances, plus or minus what colors. Pantone numbers, not descriptions. Navy blue means different things to different people. Packaging specifications, inner packaging, outer cartons, polybags, labels, barcodes, labeling requirements, country of origin, care instructions, certifications and warnings. Reference sample, production must watch. Approved sample dated X and retained by both parties. Here's the rule. If something matters to your customer, it needs to be in writing with your supplier. Because you should have known what I meant. Doesn't fix a 10k unit order. Section 2, pricing and payment terms. How much and when do you pay? This section protects your cash flow and prevents surprise cost increases. These include unit pricing, exact price per unit, per sku, documented price validity period. These prices are valid through date. This Locks in your cost and gives you planning visibility. Now the currency Is it USD? RMB Euro what exchange rate applies? If currency fluctuates? What's included? Does the unit price include packaging? Labeling? Assembly B Explicit deposit terms? What percentage upfront? When is it? June Balance Payment Net 30 Net 60 ZU ON Shipment Joan Delivery Payment Method Wire Transfer LC what are the banking details? Price change provisions supplier must provide 60 or 90 days written notice before the price change. This is huge. It gives you time to plan or negotiate. The brands that get blindsided by cost increase didn't have price validity periods. The brands that see them coming did. Section three order quantities and lead types, MOQs and delivery schedules. This section sets expectations for how ordering works. These include minimum order quantity per sku, per order or per year. However it's structured. Standard lead time. How many days from order confirmation to shipment. Order lead time. How far in advance must you place orders? Production capacity what's the maximum they can produce per month? This matters during each season. Rush order terms. Can you expedite? What does it cost? How? How much time can you save? The goal is no surprises. You know exactly what to expect and so does your supplier. Section 4 Quality Standards what's acceptable and what happens when it's not? This is where most founders have nothing in writing. And it's where most disputes happen. Include acceptable quality level. What defect rate is tolerable? Industry standard is often 2 to 3%. But define yours. Inspection rights can you or a third party inspect goods before shipment? Who pays for inspection? Quality reference all goods must match approved production sample retained by both parties. Defect resolution if quality fails inspection, what happens? Rework, Replacement Refund Credit toward future orders. Claim process how do you report defects? What evidence is required? Photos Inspection reports Videos Claims timeline How long after receipt do you have to file a claim? 7 days? 30 days? A founder told me she received $40k in defective inventory. Supplier claimed it was fine when it shipped. No inspection clauses, no claims process. No resolution. She absorbed the loss. Don't let that be you. Section five Shipping and Delivery. Who pays for what and who owns the risk? This section prevents expensive misunderstanding about logistics. You should include incoterms. This is the big one. FOB means supplier's responsibility ends when it's on the ship. After that, you own the risk. DDP means supplier handles everything, including duties and delivery. CIF means they pay shipping, but you own transit risk. Know what you're agreeing to. Named location fob Shanghai DDP Los Angeles Be specific. Freight arrangements. Who booked the freight? Forwarder can you use your own insurance. Who provides cargo insurance? What's delivery schedule? Expected timeline from shipment to arrival Late delivery provisions what happens if they miss the deadline? Penalties Discounts at minimum notification requirements Shipping terms can swing your landed cost by 10 to 20%. Get them right section 6 intellectual property and Confidentiality Protecting your designs and information this section prevents your supplier from selling your product to your competitors or on Amazon under their own breadth. Include IP ownership All designs, specifications, formulas and intellectual property provided by or developed for buyer remain buyer's exclusive property. Confidentiality Supplier agrees not to disclose your information to any third party or without written concept. Non compete Supplier agrees not to manufacture identical or substantially similar products for third parties. Define the scope. Same product category, Same design elements, tooling and molds. If you paid for custom tooling, you own it. Document ownership clearly return of materials upon termination, supplier returns or destroys all confidential materials, samples and designs. I've seen brands discover their suppliers selling their exact product. Same design, same specs on Amazon. No IP clause meant to recourse. They had to compete against their own manufacturer. This section is non negotiable. Section 7 term and termination how long does this last and how do you exit? This section defines the relationship timeline and exit process. Include initial term. This is a one year agreement. Two years open ended renewal. Does it auto renew? How do you prevent auto renewal? Termination for convenience, can either party exit with notice? How much notice? 30 days 90 days termination for clause what breaches allow immediate termination Quality failure Missed deliveries IP violations Effect of termination what happens to open orders? Do they complete production or does everything stop? Survival clauses what survives termination? Usually confidentiality and I pre protections continue even after the agreement ends. You want a clean exit option. Relationships change. Business needs change. Make sure you can move on when necessary. Section 8 dispute resolution what happens when things go wrong? Every supplier relationship eventually hits a conflict. This section ensures you have a process before you need one. Include good faith negotiation. Both parties agree to attempt resolution through direct discussion for 30 days before escalating. Most disputes can be resolved with a conversation. Mediation if negotiation fails, agree on a mediation process Faster and cheaper than lawyers. Arbitration if mediation fails, binding arbitration with a specific organization. Still cheaper than court governing law. Which country's law govern agreement? This matters in international relationships Jurisdictions if it goes to court, Where? What country? Suppliers country Neutral territory like Singapore or Hong Kong there's the thing about dispute resolution clauses. Having them in writing actually prevents disputes. When both sides know exactly what happens if things break down, they work harder to avoid the outcome. So you have the eight sections how do you actually implement this? Step one Start with what you have. If you have any existing documentation, emails, messages, previous agreements, gather it. Some terms might already be documented somewhere. Step 2 Prioritize the gaps. You probably don't need everything at once. Start with the sections where you have the most risk. Quality standards, payment terms and IP protecting. 1 Usually the priorities and IP protection are usually the priorities. Step 3 have that conversation Send your supplier a message as we continue to grow together, I'd like to formalize some of our terms in writing. This protects both of us and ensures we're alive. Can we discuss Most good suppliers will welcome this. They deal with professional buyers all the time who require documentation. If the supplier resists putting basic terms in writing, that tells you something. Step 4 Keep it simple. This doesn't need to be 50 pages. A clear 2 to 3 page agreement covering the essentials is enough for most DTC brands. Complexity creates confusion. Simplicity creates clarity. Step 5 Review annually as your business grows and changes. Review the agreement, update pricing, adjust terms, add provisions as needed. I've put together a complete supplier agreement template that covers all eight sections we discussed today. It's in plain English, fill in the blank format, no lawyer required. You can literally copy paste the language and customize it for your supplier. Comment template and I'll send it over. The template includes product specification section with all the fields you need. Pricing and payment terms with price validity, language quality standards including defect rates and claims process shipping terms with incoterms, explanation, IP and confidentiality protections terms and termination provisions, dispute resolution costs. It's everything we cover today in a ready to use document. And if you want to go deeper on supplier relationships, negotiation, quality management and everything that protects your margins and I break this down every week in my newsletter. Unboxed weekly free tactical and focus on what actually matters for DDC founders links in the description so stop running your supplier relationships on messages and handshakes. Get it in writing.