Buy-Side vs. Sell-Side Contracts: Differences, Similarities, Opportunities, & Challenges

Your company’s performance can be defined by how well you sell and how you buy. Regardless of the industry, there are always two sides to every deal, and you’ve likely been on both at one time or another. Consequently, the way you manage both sell-side and buy-side contracts directly impacts the success of your business. 

By knowing their specifics, similarities, and differences, not only can you achieve your organizational goals faster, but you can also set more ambitious ones.

Definition of Buy-Side Contracts

In simple words, buy-side contracts are agreements that define the receipt of goods or services in exchange for something in return, typically money. No matter which industry your company is in, there are always departments such as procurement, outsourcing, and others that deal with buy-side contracts.

Managing the buy-side has some opportunities for your company, but to take advantage of them, you need to overcome certain challenges as well.

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Negotiate the best possible price

Opportunity: Negotiations are an excellent opportunity to discuss prices or individual terms. 

Challenge: Negotiations via email make it difficult to track all changes that were discussed. Thus it’s easy to miss price adjustments or lose the actual version where they were agreed upon.

Re-negotiate the price or terms with current vendors

Opportunity: If your organization is a long-term client, it’s usually easier to get a reduced price, discount, or another special offer. 

Challenge: If you work with many vendors, you might miss the renewal deadline, which will lock you into the existing terms for one more contract period.

Manage expenses

Opportunity: Knowing when and what kind of goods and services you purchase will help you avoid overspending and supply shortages. To control costs and efficiently manage supplies, you need to analyze how many materials you need, as well as when and why there were too many or too few materials ordered.

Challenge: It may be difficult to accomplish this without something that can serve as a single source of truth from which you can easily pull information from contracts and transform it into reports.  

Ensure that procured goods and services are delivered and paid for

Opportunity: When everything is delivered and paid for as expected, it helps you run your business on time and on target. Also, when everything goes as agreed, it helps build good business relationships between parties.

Challenge: Delivery terms and payment details are standard clauses, but they must be clearly stated, or else some misunderstanding may arise. For deliveries, this includes timeframes, costs, who’s responsible for deliveries, and possible delays or damages due to reasons that are or aren’t in human control. 

As for payment details, if they’re ambiguous or unstipulated, disagreements can occur, leading to breaches and litigation. Some common payment obligations are cash-in-advance, consignment, and open account, but there are many more, and they should be discussed separately.

Also, obligations tracking may prove challenging if you have to stay on top of many things. There may be different deliveries and payments at the same time. Failure to fulfill obligations as promised could lead to financial losses. In addition, not receiving the necessary tools for your job when agreed upon or missing a billing date may stop you from satisfying your obligations.

Definition of Sell-Side Contracts

Sell-side contracts help set up the sale and delivery of goods and services to a buyer. Your sales department works with sell-side contracts, and just like buy-side contracts, this type also has its opportunities and challenges.

Increased revenue

Opportunity: Effective management of sell-side contracts results in closed deals, customer retention, new customers, and higher revenues for your organization.

Challenge: If a sales manager can’t find a contract template quickly, needs to wait while a lawyer prepares it, or uses an outdated version by mistake, it creates delays that could cost you a deal.

Additional sales & upselling

Opportunity: By analyzing existing contract information and running it against planned supply volumes, business units gain the ability to sell new or additional goods and services. 

Challenge: A lack of visibility into contract data may lead to missed revenue opportunities or blocked company growth.

Build trust in your organization

Opportunity: Tracking contract obligations ensures that goods, licenses, and services are delivered and paid for according to contract terms. 

Challenge: If the people responsible don’t receive timely notifications about actions that need to be taken, it may result in broken obligations.

Similarities and Differences of Both

There is really only one difference between buy-side and sell-side contracts. Buy-side focuses on cost reduction while sell-side looks for ways to increase revenue. As for their shared traits, there are a few.

Both sides need to interact with other parties to accomplish organizational goals. That’s why risk avoidance, compliance, and relationship management are essential. Other main similarities are:

  • Information: This includes the basic metadata of your company, such as names, addresses, and signature details.
  • Processes: Contract-related processes have the same flow for both buy-side and sell-side agreements. They usually require requests, negotiations, approvals, and financial and legal reviews before being executed.
  • Software: Whether you create or track vendor contracts or sales agreements, the same software is used.
  • Goals: Sales and procurement departments work to increase revenue and help their company achieve its business goals faster.

Since these types of contracts have more in common than not, it’s reasonable to combine both in one centralized management system for buy-side and sell-side agreements.

CLM Software for Buy-Side vs Sell-Side Contract Management

Distinctive reputations

As mentioned above, buy-side focuses on cost reduction while sell-side works to grow revenue. Contract lifecycle management platforms can achieve both goals so long as they have the right features, such as:

Centralized storage

Keeping all contracts in one place will help you analyze and report contract performance, as well as quickly check information. You’ll be able to make better-informed business decisions. In addition, the ability to retrieve information from existing contracts greatly accelerates the contract management process.

  • For buy-side: A single storage provides buy-side with easy access to information, allowing teams to stay aware of payment dates or shipment terms, as well as give up on unfavorable partnerships in favor of better ones.
  • For sell-side: After contracts are signed, they go to the storage, which keeps all documents organized, structured by project, and accessible if details are needed. It’s more convenient and secure than keeping them in different locations.

Automated reminders

Notifications will inform you about upcoming due dates and obligations, no matter the side of the deal. They’ll also provide you with time to prepare for renegotiating terms for impending renewals.

  • For buy-side: With automated reminders, you can ensure that the goods and services you order are delivered and paid for. Also, you can stay aware of approaching renewals or terminations, which gives you the opportunity to renegotiate terms, ask for discounts, add more services to your orders, or cancel unfavorable partnerships and find better ones. 
  • For sell-side: By staying notified about actions that need to be taken, you can ensure you’ll meet your obligations, which in turn helps you build stronger relationships. It also provides you with the opportunity to sell additional products, services, or features before renewal or to retain a client by offering special terms if the contract is about to terminate. 

Analytics and custom reports

Modern solutions allow you to add custom metadata to your contracts that you can group and analyze contracts by criteria such as contract type, amount, date, vendor, or other. Custom report capabilities enable you to track the performance of a group of contracts or any separate agreement.

  • For buy-side: Analytics and reports help enable better business decisions, choose the best vendors, assess company procurement needs, and avoid overspending, shortages, or buying too many items of some goods. In addition, you can use analytics to prove to your vendor that you’re a valuable customer, which can help when renegotiating terms and prices. A lot of costs can be saved this way.
  • For sell-side: These features help show what can be improved in the sales process, which customers may be interested in additional services or goods, which contracts aren’t profitable, and what can be done.
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Real-time collaboration

This tool will improve and accelerate your negotiation process by allowing multiple people to collaborate on documents simultaneously, as well as track all changes and roll them back if needed. You can go through the process 35% faster, and get a deal signed in 3-4 days instead of 3-4 weeks.

  • For buy-side: Tracking all changes puts you in a stronger negotiating position as all terms are visible and you can be sure you aren’t mixing up anything.
  • For sell-side: Your sales managers can also get into a stronger position during negotiations while real-time collaboration allows them to close deals faster. And the faster they seal the deal, the more deals and higher revenues they can obtain.


This feature is crucial for any department that deals with typical contracts such as MSAs, NDAs, DPAs, Sales Agreements, and similar agreements. With self-service, business units can generate compliant documents using pre-approved templates without having to involve legal. 

  • For buy-side: All of your organization’s procurement needs can be fulfilled faster without any delays. It can also help save funds that would have been spent on unnecessary legal involvement. 
  • For sell-side: It speeds up sales cycles by 5x since lawyers don’t have to draft or review the contract. If you use public-facing templates, they allow your customers to initiate sales cycles on their end. Salespeople only need to meet them halfway through. 

Automatic calculations

Automatic calculations are very helpful for sales contracts that frequently contain numbers that necessitate some calculations. Some CLMs, like AXDRAFT, make calculations automatically based on the data entered by users, which in turn eliminates costly mathematical errors.

  • For buy-side: It eliminates the risk of confusing numbers and overpaying or underpaying for procured items. Being reliable can allow you to enjoy better terms in the future.
  • For sell-side: Mixing up numbers in a sales deal can lead to losses instead of profits. 

Conditional logic

Conditional logic allows you to create compliant contracts by answering simple questions whose answers determine the clauses used in the contract, as well as the final look. Also, conditions allow you to create addenda for any contract easily as counterparty data can be pulled and inserted without error. 

  • For buy-side: Conditional logic automatically inserts the necessary clause, allowing those dealing with buy-side contracts to not worry about omitting or mixing up details. It also eliminates the need to reenter information you already have for existing vendors. Managers only need to choose the vendor, type of contract, and other details based on the need (i.e. goods they’re buying).
  • For sell-side: When clauses are inserted automatically according to predefined conditions, it eliminates the risk of non-compliance. It ensures mistakes won’t find their way into the contract language, causing terms to be incorrectly stipulated or overpromised. Plus, for contracts that may require addenda such as sales contracts, lease agreements, SaaS contracts, and others, this function allows them to be created in seconds based on a primary agreement.
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Wrapping Up

Contract lifecycle management solutions simplify contracting, but it’s important to mention that they should be tailored to your needs. With AXDRAFT, you can choose the essential features you want and scale in the future when needed.

Moreover, mastery takes a matter of hours for all company units, whether they’re operating on the sell-side or buy-side of a deal. Book a demo if you’d like to discuss how you can gain complete control of your contract management.

What are buy-side and sell-side contracts?

Buy-side contracts involve buying products or services, while sell-side contracts are used to conduct sales with your customers.

What is the difference between Buy-Side and Sell-Side e-commerce?

Buy-side e-commerce refers to resource-procuring transactions that use the internet for all related operations. Sell-side e-commerce refers to transactions where products and services are sold to a customer via the internet.

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