How do I check a packaging maker’s minimum order terms with its customers?

Collect the supply agreements, quotes and purchase orders for the biggest customers. For each one, note the minimum quantity, the price basis, how long the terms last and what happens if the customer orders less. Some arrangements are firm; others exist only as a habit. Know which is which.

Then check reality. Pull a year or more of order history and see whether customers actually reached the minimums. Orders that routinely fall short mean the terms are not worth much in practice. Ask who pays for finished goods or printed stock left on the shelf when a customer changes a design or leaves, since that cost can land on the shop.

Ask about special tooling, such as dies or plates, and who owns them. If a customer’s tooling sits in the plant, find out what happens to it in a sale. Your lawyer should read the contracts, especially anything about transfer or consent. Speak to a few customers, with the owner’s agreement, to confirm that they understand the terms the same way. Watch for terms the owner describes as understood but never put in writing. They may be real, but a new owner has nothing to point to if a customer later disagrees about what was promised.

Key takeaways

• Gather written terms for each major customer and note how long they last.
• Compare minimums with real order history.
• Ask who owns tooling and who carries leftover stock.