I would conduct business with this company but there would be certain stipulations I would require within our contract. Since the business said they can provide the proper paperwork that can meet all U.S EPA standards/requirements for the catalytic converters, I do not see that being a problem with the diverter as long as it is done properly.

Since the business has good standing for the past 10 years is a plus for doing business with the diverter (middleman), I see an advantage for our business to take this on as a contract. When getting into negotiations for a contract, I would request to have the original manufactures name with an agreement that we would not bypass the diverter for a period of time in the contract. Having a time period contract with the business is in the best interest of our company since product of goods and services prices change with time and technology. Having better visibility with bot businesses would give a greater confidence to do business with them.

There are a few concerns I would have when it came to doing business with the diverter. The overwhelming concern I would have would be, can they handle the volume needed and can they resource enough product incase late or emergency orders are needed. Do they have a safety stock to pull from incase our business is in need to fulfil an order or are they reliant on their manufacture that they are doing business with?

With the 25% is savings from switching from our current supplier to this new supplier with the diverter, I would have additional costs to implement for oversight costs within the company. Since the business is saving 25%, I do not see that as being a problem to have additional resources to manage the account and having a direct oversight for this contract.

Do you agree with this statement? If yes, then why?