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At market the vendor is showing and selling his merchandise to the retailer and the retailer is viewing, choosing and placing orders for merchandise that will fit his store and clientele. When the retailer finds the right merchandise he places an order by giving the vendor or the vendor’s sales rep his Purchase Order. This piece of paper is a contract between the retailer and the vendor and should be treated as such. Many times at market the vendor will have his own form for placing orders and it may be more convenient to use the vendor’s form; however, you want to make sure that you attach your own Purchase Order form with your conditions and requirements to the vendors form. If you do not, you are allowing the vendor to dictate to you the terms of this transaction.

While it would be nice to have a standard Purchase Order form that every retailer uses, there are too many unique, independent retailers to be able to do that. There are, however, a number of pieces of information that we feel should be on the Purchase Order you turn in to your vendor when placing an order.


1.  Retailer’s name and address. There could be a different Bill To: and Ship To: address and if so, they should both be listed.

2.  Vendor name and address.

3.  Vendor number or code if you are on a computerized system (which you should all be).

4.  Date Purchase Order is issued.

5.  Shipment start date. This is the earliest date the merchandise may be shipped from the vendor.

6.  Cancel date. The latest acceptable shipping date OR the latest acceptable receiving date. Be sure to specify which of these you are listing.

7.  Order number. This is the retailer’s order number and should ideally be pre-printed on the Purchase Order.

8.  Invoice payment and discount terms (if any). Be sure to note any special deals you have negotiated with the sales rep. Many times this information is not relayed to the vendor’s billing office.

9.  Shipping instructions, to include, where applicable, the F.O.B. location.

10.  Merchandise descriptions, including classification number, SKU number, style number, color, size, unit cost, unit retail and total retail for each item.

11.  Multiple copies for: vendor, retailer’s office, retailer’s receiving department and one for the buyer.

12.  Customer’s name if this is a special order.

13. “This P.O. number must appear on all invoices, packages and correspondence pertaining to this order.”


1.  Buyer name: _______________   Confirmed or Approved by: ________

2.  Confirmation requested.

3.  Insurance instructions.  Ideally “Do Not Insure”, provided the retailer has arranged for merchandise-in-transit coverage through his own contents, multi-peril or marine coverage.

4.  “All shipping charges are verified and excess freight charges will be charged back to vendor”.  This is used if you are weighing and verifying the freight costs.  Many retailers find enough errors to more than recover the cost of doing this.

5.  “A style or coordinated group must be shipped in its entirety”  OR “Partial shipments of coordinated merchandise will not be processed until total quantity ordered is received.  This includes processing for payment.  If coordinated merchandise is not completely and timely delivered, the portion that is delivered may be returned at buyer’s option with freight paid both ways by vendor.”

6.  “In accepting this order vendor accepts all stated terms and conditions.  Any deviations will be at the risk and expense of the vendor, plus handling charges.”

7.  “We reserve the right to reject all goods not delivered within the shipping times specified, not agreeing with the sample, or sent in excess of amount ordered.  Also, we reserve the right to reject if there are any substitutions that were not pre-approved by us.  In these instances there may be a service charge assessed.”

8.  “Terms commence with receipt of invoice or receipt of merchandise, whichever is later”

9.  “Do not include more than one order on an invoice.”

10.  DUNS Number.

11.  “Do not enclose invoice with merchandise.”

12.  “Orders not shipped by completion date are automatically cancelled.  No further notice will be necessary.”  OR “Completion dates shall be considered to be “in store” by date stated.  Merchandise not shipped in conformity to shipping dates (start and cancel) may be refused at vendor’s risk and expense.”

13.  Salesperson’s (sales rep) name and phone number in case you need to contact him or her about the order or to place a re-order.

14.  “Separate invoices must be prepared for each shipment or purchase order.”

On the other hand, we have seen language on Purchase Orders that is Excessive, Improper or Unnecessary.  An example of this is:

“Anything to the contrary notwithstanding, we shall be under no duty to inspect goods before resale, and resale shall not be considered an acceptance of the goods so as to bar our right to reject them. Complaints or notice of defects in said goods will be considered made within a reasonable time if made a reasonable time after notification is given to us of such defects by our customers. Return of such defective merchandise shall not relieve vendor from liability for failure to ship merchandise in accordance with order.”

Comment:  This should be unnecessary. Vendors who don’t practice this should be avoided. The reasonable time after receipt of merchandise should not be excessive, however, i.e. more than one year. The retailer should not be expected to be the vendor’s quality control department.

The Purchase Order is also an important means of communication between the retailer and the vendor, and it is very important to keep the lines of communication open.  Several suggestions to do that are:

1.  If possible, designate 1 person in your organization to be responsible for communicating with the vendor. Also, if possible, try to always talk to the same person at your vendor’s office. (Do not try to go through the vendor’s salesperson or rep.) If your vendor is factored this becomes more difficult, and more important, since you will be dealing with more people.

2.  If you are having a problem paying your bills, let the vendor/factor know before the payment is due. Once you and the vendor/factor work out a payment schedule that is satisfactory, be sure to make your agreed payments on time.

3.  If there is a problem with an invoice (due date, terms, etc.) let the vendor know immediately. Do not wait until the payment is due.

4.  When giving a vendor’s name as a credit reference, also give the name of the person you deal with. Then, let that person know you have given their name.

It is important to keep the lines of communication open with your vendors.  Using your Purchase Order with all the necessary language and talking to your vendor when needed are critical to good vendor relations.