e-Commerce Fulfillment Agreement

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e-Commerce Fulfillment Agreement Powered By Docstoc
					e-Commerce Fulfillment
Agreement
This e-Commerce Fulfillment agreement is between a company and a supplier that will
fulfill and ship the company’s online orders. It is vital to use a written agreement for
fulfillment agreements between two companies to minimize the chances of
complications or disagreements between the parties. Customize the products that will
be fulfilled, the supplier’s handling charges, the billing terms and specifications, and
much more. This agreement is ideal for small businesses or other entities that offer
online orders and want to use a separate company to ship and fulfill online orders.
                     E-COMMERCE FULFILLMENT AGREEMENT

THIS E-COMMERCE FULFILLMENT AGREEMENT (hereinafter referred to as the
“Agreement”) is made on _________________ [Instructions: Insert the date of this
agreement] between _________________ [Instructions: Insert the name of the supplying the
goods] (hereinafter referred to as the “Supplier”) of ____________________________________
[Instructions: Insert the Supplier’s address] and _________________ [Instructions: Insert
the name of the Retailer] (hereinafter referred to as the “Retailer”) of
____________________________________. [Instructions: Insert the Retailer’s address]

                                                     RECITALS

WHEREAS, Supplier desires to provide order fulfillment to Retailer for its online store
(hereinafter referred to as the “the Online Store”) and Retailer desires to use the Supplier’s
services for its order fulfillment;

WHEREAS, Supplier and Retailer desire to enter into this Agreement under which Supplier will
fulfill certain _________________________________ [Instructions: Insert the type of
products that Supplier will fulfill] (hereinafter referred to as the “Products”) for Retailer to sell
under the Retailer label.

NOW, THEREFORE, for good and valuable consideration, receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

1. FULFILLMENT SPECIFICATIONS

    A. Supplier has a warehouse to handle the fulfillment of orders received by the Retailer.
       The warehouse is located at ____________________________________. [Instructions:
       Insert the location of the Supplier’s warehouse]

    B. Supplier shall (i) be available for and participate in such training necessary to fulfill the
       Retailer’s orders, (ii) print orders received through the Retailer on a dedicated terminal
       and printer to be supplied by Retailer, (iii) pull all orders, Products and other items to fill
       each order as such is received, (iv) pack and arrange for shipping of the order in
       accordance with the instructions received by the Retailer.

    C. All orders shall be packed and shipped within ______________________ [Instructions:
       Insert the amount of time that Supplier will take to ship the goods] of receipt, other
       than for delays caused by shortages of ordered items other than Product and causes
       beyond Supplier’s control, such as shipper strikes.

    D. Retailer shall supply to Supplier the specifications for a printer and computer terminal
       necessary for receipt of orders from the Retailer. The printer shall be provided free of
       charge by Retailer, and shall be returned to Retailer, at Retailer’s instruction, at the
       termination of this agreement. Supplier shall install the equipment at the Warehouse per




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            Retailer’s instructions, and shall use its best efforts to provide uninterrupted Internet
            access as its cost.

    E. Supplier shall receive and promptly and properly store all Inventory shipped to Supplier
       by Retailer or its vendors for fulfillment of orders through the Retailer. All Inventory
       shall be Retailer’s property, in a locked, temperature and humidity controlled
       environment, free from insect or vermin access; provided, however, that Supplier shall
       not be obligated to provide any refrigerated or freezer warehouse space. Supplier shall be
       responsible for any loss, damage or theft of goods provided by Retailer while in
       Supplier’s possession. Supplier shall keep adequate insurance to cover the replacement
       cost of any Retailer goods.

    F. Supplier shall prepare a sufficient supply of each Product to be sold in the Online Store,
       in accordance with instructions of Retailer and the terms of the private label arrangement
       between the parties. All Inventory sold in the Online Store shall be provided by Retailer
       to Supplier on a consignment basis. Products manufactured by Supplier for Retailer
       under the existing private label agreement between the parties shall be labeled by
       Supplier and transferred to the Warehouse from time to time in such quantities as
       Supplier shall reasonably determine to fulfill its obligations for prompt shipment under
       this Agreement. Supplier acknowledges that it shall have no ownership interest in any of
       the Inventory sold in the Online Store, and any such Inventory not sold shall be returned
       to Retailer. Supplier shall ensure that no security interest of any party to whom Supplier
       owes any monies shall attach to the items owned by Retailer, and Supplier shall keep all
       such goods segregated from its normal inventories. Supplier shall execute such
       documents as may be necessary to preserve Retailer’s ownership interest in the Inventory
       free from liens and encumbrances.

    G. Supplier and Retailer agree that Supplier shall monitor Inventory levels of various items
       offered for sale in the Retailer and shall notify Retailer monthly of the need to restock
       any items. Notwithstanding (f) above, Supplier agrees that the Products not sold through
       the Online Store may be returned by Retailer to Supplier, and Retailer shall receive a
       credit for the full cost of any such returned products.

2. CONSIDERATION FOR SERVICES

    A. As consideration for the services to be provided by Supplier hereunder, Supplier shall
       receive the following consideration:

       i.      All shipping and handling charges as assessed by Retailer through the Online Store.
               The parties agree that shipping charges shall be the actual amount invoiced by UPS,
               Federal Express or other common carrier or freight forwarder to Supplier. Handling
               charges shall be determined in accordance with the criteria set forth on Schedule I
               hereto; provided, however, that the parties shall meet quarterly, if requested by either
               party, to consider modifications to Schedule I if appropriate, and the parties shall
               negotiate in good faith toward resolution of any proposed modifications. It is the
               intention of the parties that all shipping and handling costs be covered with minimal



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              profit to any party. With respect to its customers, Retailer may, if it deems necessary
              to stimulate the Online Store sales, modify, reduce and for some orders eliminate the
              handling charges; provided, that no such modification or reduction shall affect the
              amounts due Supplier for shipping and handling. Shipping and handling charges
              shall be collected by Retailer through the Online Store and paid to Supplier on a
              ________________. [Instructions: Insert the frequency that Retailer will pay the
              Supplier]

      ii.     A monthly rental charge equal to $________________ [Instructions: Insert the
              per-square monthly rental charge Supplier will charge Retailer] per square foot
              of shelf or other storage space in the Warehouse allocated to the Inventory. All
              invoices shall be payable within _______________ [Instructions: Insert the length
              of time invoices will be due after receipt] of receipt. Supplier acknowledges that
              shelf space, if any, currently used to Retailer Products under the existing private label
              arrangement upon completion of production, prior to shipment, or for back order
              purposes shall not be subject to the foregoing rental charge and only Inventory
              stocked for order fulfillment through the Online Store shall generate the rental charge.

3. TRAINING AND INFORMATION

    A. Supplier hereby grants to Retailer a royalty-free license to reproduce on the Online Store
       website or Retailer site all information pieces prepared by or for Supplier and related to
       use of Products, any scientific studies on their uses, and any structure/function claims
       made regarding the Products, in electronic format. Retailer agrees to indemnify and hold
       harmless Supplier from any claim regarding the improper use or reproduction of the
       information provided by Supplier. Supplier agrees to indemnify and hold harmless
       Retailer from any liability and costs arising from the information provided by Supplier to
       Retailer.

    B. Retailer shall provide an informational “hotline” through its 800 number to answer
       questions and refer comments regarding the Online Store and the items sold therein.

4. MARKETING

Retailer shall market the Online Store, and the Inventory sold therein, as part of its normal
advertising efforts. The parties agree that after successful testing of the Online Store, the parties
shall establish a joint marketing program for the Online Store, under which Supplier shall pay a
proportionate share of the marketing costs, not to exceed $_______________ [Instructions:
Insert the maximum yearly marketing contribution] in any year, approximately based on the
percentage of Products to total Inventory sold in the Online Store.

5. DEFAULT

It shall be a breach hereunder if any party fails to fulfill its material obligation in accordance
with the terms of this Agreement and in a timely manner. Upon any breach by any party
hereunder, the other party shall provide written notice to the address specified above. If any



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monetary breach is not cured within _______________ [Instructions: Insert the amount of
time a party has to cure a breach under this agreement] following notice, or any other breach
is not cured within 30 days after notice thereof, the non-defaulting party shall be entitled to
terminate this agreement and recover such damages as it may recover in law or in equity.

6. TERM

The term of this Agreement shall be _______________, [Instructions: Insert the length of
time this agreement will remain effective] commencing with the first date upon which the
Retailer commences sales to the public; provided, however, that if Retailer determines that sales
from the Online Store do not justify the expense of its operations and Retailer terminates the
Online Store’s operations, this agreement shall automatically terminate and all Product and other
items provided by Retailer to Supplier for sale at the Online Store shall be promptly returned to
Retailer, at Retailer’s expense, pursuant to instructions given by Retailer to Supplier.

7. SALES RECONCILIATION

    A. Supplier shall provide Retailer with a monthly report summarizing the total amount of
       sales from the Online Store processed in the previous month, the total amount of shipping
       and handling charged on the sales, actual shipping costs incurred, total returns or credits
       granted, and any other information reasonably requested by Retailer, to the extent such a
       report can be generated by the system. The report shall be provided by the _________
       [Instructions: Insert the day of the month that Supplier will provide monthly
       reports to Retailer] of each month for the previous month’s Online Store activities.

    B. Supplier shall provide Retailer with monthly item movement reports showing sales in
       each category, and Inventory levels remaining in each category, to the extent such a
       report can be generated by the system.

    C. Retailer may, on notice to Supplier, conduct a monthly inventory of all goods held by
       Supplier for fulfillment of Online Store orders. Any discrepancy between actual and
       recorded amounts of delivered, sold and remaining goods shall be resolved by Supplier at
       its expense.

8. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which shall be deemed
to be an original, but all of which together shall constitute but one and the same instrument.

9. COMPLIANCE WITH LAWS

In performing under this Agreement, all applicable governmental laws, regulations, orders, and
other rules of duly-constituted authority will be followed and complied with in all respects by
both parties.

10. GOVERNING LAW



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This Agreement shall be governed by, construed, and enforced in accordance with the laws of
the State of ______________________. [Instructions: Insert the state’s laws that will govern
this agreement]

11. NOTICES

Unless provided herein to the contrary, any notice provided for or concerning this Agreement
shall be in writing and shall be deemed sufficiently given when sent by certified or registered
mail if sent to the respective address of each party as set forth at the beginning of this
Agreement.

12. CONFIDENTIALITY

Supplier acknowledges and agrees that all know-how and other manufacturing, sales, marketing,
technical, and other information disclosed to it by Retailer is confidential and proprietary to
Retailer (hereinafter referred to as the “Confidential Information”) and acknowledges that the
unauthorized disclosure of any of the Confidential Information will result in immediate and
irreparable competitive injury to Retailer. Supplier may disclose the Confidential Information
only to those of its employees to whom such disclosure is necessary to permit the manufacture,
use, and sale of the Products and may not disclose any of the Confidential Information to any
other person or entity without the prior written approval of Retailer.

13. ATTORNEYS’ FEES

In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party in the
action shall pay to the successful party, in addition to all the sums that either party may be called
on to pay, a reasonable sum for the successful party's attorney fees.

14. MANDATORY ARBITRATION

Notwithstanding the foregoing, and anything herein to the contrary, any dispute under this
Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the
parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators
shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The
arbitration shall be governed by the rules of the American Arbitration Association then in force
and effect.


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth in
the first paragraph of this Agreement.




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RETAILER



_____________________________________
I have authority to bind the Company



SUPPLIER



_____________________________________
I have authority to bind the Company




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                                                   SCHEDULE I

                                            HANDLING CHARGES


[Instructions: Insert or attach a description of how the Supplier will charge the Retailer for
handling the fulfillment orders]




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DOCUMENT INFO
Description: This e-Commerce Fulfillment agreement is between a company and a supplier that will fulfill and ship the company’s online orders. It is vital to use a written agreement for fulfillment agreements between two companies to minimize the chances of complications or disagreements between the parties. Customize the products that will be fulfilled, the supplier’s handling charges, the billing terms and specifications, and much more. This agreement is ideal for small businesses or other entities that offer online orders and want to use a separate company to ship and fulfill online orders.