Buyers and sellers have a very peculiar relationship. The buyer can be anyone who purchases the goods or products directly from the manufacturer to get the raw materials from providers as well. Buyers can be in business with multiple entities that include retailers, raw materials providers, or even manufacturers as well. Sellers can be vice versa and provide these kinds of goods either by making themselves or by procuring from other domains.

Well, there are pros and cons associated with both short-term and long-term relationships. In a short-term relationship, there exists flexibility on the part of the buyer to switch suppliers easily. This could be of benefit in a place where, for example, prices tend to fluctuate a lot since there might be better deals and discounts resulting from competition.

However, there are also some disadvantages to short-term agreements. Normally, they allow very limited flexibility in payment and ordering terms. For instance, a new supplier has to rapidly confirm the order and pay for it; moreover, less trust between the buyer and seller makes it harder to share market information.

On the other hand, long-term relations that are usually common have several advantages for both buyers and sellers. Both parties are more likely to enroll in this, where orders are reliably placed and paid. Quantity discounts and flexibility in payment terms can be allowed more liberally in established relations. With time, trust grows and information, forecasts, and even customers can easily be shared.

They usually bind the business through long-term contracts; hence, it is essential and crucial to predict with accuracy future needs and performance. A strong supply chain partnership provides stability, and in a way, all participants will be working toward long-term success.