What does exclusivity cost me?
Mostly options. With an exclusive you cannot test the market on part of your volume, take a better spot bid, or split materials between specialist buyers. If you grant it, keep it to the materials and sites actually priced in the contract.
How does a matching right work?
You bring a written offer from another buyer; the current buyer has a set number of days to match it. If it matches, you stay. Matching rights discourage other buyers from bidding at all, because they know their offer may only be used to move the incumbent. Keep the window short and the offer details private.
Is there a middle path?
Yes: exclusivity for one material at named sites, with a carve-out for materials the buyer does not price well. Pallets, totes and gaylords often fetch more from specialist buyers than from a cardboard buyer that takes them as an extra.
Sample wording
14.1 Scope. Seller shall offer to Buyer all [OCC] generated at the sites in Schedule A. Nothing in this Agreement restricts Seller’s sale of other materials.
What to negotiate
- Limit exclusivity to named materials and sites.
- Carve out unit-priced items such as pallets and totes.
- Keep matching windows short, and refuse to share rival bidders’ names.
Red flags in a draft
"All recyclable materials" at "all present and future sites".Exclusivity with no index link and no floor.
Questions
- Should I sign an exclusive recycling agreement?
- Only if the price reflects it: an index link, a floor, audit rights and a short exit, limited to the materials and sites actually priced.