Fulfilment agreements are one of the cornerstones of the emerging "click and mortar" business partnership model. The typical fulfilment agreement involves a situation where an online business is seeking to enlist a "brick and mortar" manufacturer, distributor or large retailer to source and ship products or provide services to its customers. While simple in concept, fulfilment agreements can present a host of difficult and interrelated challenges. In this article, a number of strategic issues and negotiation concerns associated with fulfilment agreements are identified and discussed.
1. Strategic Issues
The first thing that any company should do before entering into a fulfilment agreement is to define fully the short-term and long-term business strategy that underlies the fulfilment relationship. Too often, businesses enter into fulfilment arrangements without analyzing the impact that these arrangements may have on their ability to achieve long term e-business objectives. The
