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Rebate agreement: definition and important aspects for buyers
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Bonus agreement in a nutshell:
A bonus agreement is a contractual addition between the purchaser and supplier that stipulates subsequent payments when defined targets (usually turnover or quantity) are achieved. For the purchasing department, this is an important instrument for subsequent cost reduction and long-term supplier loyalty.
Example: An automotive supplier agrees with its steel supplier an annual bonus of 2% for an annual turnover of EUR 1 million, 3.5% from EUR 2 million and 5% from EUR 3 million, which means a reimbursement of EUR 87,500 for a realized annual turnover of EUR 2.5 million.
Contents
Introduction to the bonus agreement
What is a bonus agreement?
A bonus agreement is a contractual agreement between a company and its suppliers in which subsequent discounts or bonuses are granted if certain targets are met. These targets can be sales thresholds, purchase quantities or quality standards, for example. Such agreements create incentives for higher purchase volumes and strengthen the business relationship between buyer and supplier.
Core elements of a bonus agreement
Significance for purchasing
In purchasing, bonus agreements are an important tool for reducing costs and optimizing supplier relationships. They enable companies to obtain better conditions through increased purchase volumes and at the same time intensify cooperation with strategically important suppliers. They also offer financial benefits and promote long-term planning in the procurement process.
Application of a bonus agreement in purchasing
A bonus agreement enables purchasers to receive subsequent discounts by reaching certain sales thresholds. By strategically planning order quantities, savings can be achieved and the relationship with the supplier strengthened.
Calculation example of a bonus scale
Initial situation:
A company concludes the following bonus agreement with its main supplier for the calendar year:
- Turnover up to €100,000: no bonus
- Turnover from €100,001 to €200,000: 2% bonus on the total turnover
- Turnover from € 200,001 to € 300,000: 3% bonus on the total turnover
- Turnover over €300,000: 5% bonus on the total turnover
Calculation:
The purchasing department plans to purchase goods worth € 220,000.
As the turnover is between €200,001 and €300,000, the company receives a bonus of 3% on the total turnover.
Bonus calculation:
220,000 € turnover x 3 % bonus = 6,600 € refund
Result:
At the end of the year, the company receives a credit note for € 6,600. The effective procurement costs are therefore reduced to € 213,400.
Strategic benefit:
A higher bonus level was achieved and additional savings realized through targeted bundling of orders.
Evaluation and strategic findings
✓ Critical success factors
→ Precise sales planning: Accurate determination of demand and volume projections for optimal bonus levels
→ Negotiation skills: Enforcement of attractive bonus scales and fair threshold values
→ Transparent monitoring: continuous monitoring of sales development for bonus optimization
⚠ Challenges and limitations
→ Minimum quantity risk: risk of overstocking due to striving for higher bonus levels
→ Supplier dependency: Possible excessive concentration on individual main suppliers
→ Complexity management: time-consuming administration of various bonus agreements
Future trends and implications:
"Digitalization enables more dynamic and individual bonus models."
→ AI-supported bonus optimization
→ Automated bonus settlement
→ Integration of sustainability targets in bonus agreements
→ Real-time tracking of bonus progress
◆ Strategic recommendations for action
→ Portfolio analysis: regular review of bonus agreements for profitability
→ Digitalization: implementation of tools for automated bonus tracking
→ Risk management: Balanced distribution of procurement volumes
Conclusion on the bonus agreement
Bonus agreements are an effective tool in strategic purchasing that promotes both cost savings and long-term supplier relationships. Success is based on careful planning of procurement volumes, transparent monitoring and digital management of the agreements. Despite potential risks such as excess stock or supplier dependency, the benefits of subsequent discounts and improved purchasing conditions outweigh the risks. Modern digital solutions and the integration of sustainability aspects make bonus agreements a forward-looking element in professional procurement management.
