What is a blanket purchase order?

It is often shortened to blanket order, and some buyers call it a call-off order. The idea is simple: agree the terms once, then call off deliveries as you go.

Why buyers and sellers use them

A customer who buys the same product every month does not want to raise a full purchase order each time. A supplier who ships to the same customer on a schedule does not want to requote each one. A blanket order removes the repeat work.

For the buyer, the benefits are fewer approvals and often a steadier price. For the seller, it gives visibility of future demand and helps plan production or stock.

How a blanket order works

Most blanket orders state:

• The products covered, and their prices or how prices are set
• A total quantity or value, or an estimated volume
• The period it runs for
• How and when the buyer will release deliveries
• Delivery and payment terms

Then each delivery follows a release. The buyer says "send 5 pallets to the Leeds warehouse on the 14th", and the seller ships against the blanket. The remaining quantity falls with each release.

What if the buyer takes less?

That depends on the wording. Some blanket orders commit the buyer to a minimum, others only set out the terms if the buyer orders. Be clear which one you are agreeing to. This is a general explanation, not legal advice, so have the actual terms reviewed.

An example from product sales

Say a packaging distributor agrees with a food producer to supply 12,000 cartons over six months at a fixed price. The producer sends a blanket purchase order. Each month the producer's planner sends a release for 2,000 cartons. The distributor's rep creates the order for that release, ships, and notes how many cartons are left under the blanket.

Related terms

• Purchase order: the buyer's order for a single purchase.
• Sales order: the seller's record of what was ordered.
• Customer price list: where agreed prices for a customer are held.
• Volume rebate: a different way to reward repeat volume.

How PromptLab handles it

In PromptLab you run a blanket order with the records you already use. The customer's price list holds the agreed prices, a quote records the terms, and each release becomes its own sales order on the account. Put the blanket reference and the remaining quantity in the sales order notes or a custom field, so the next rep sees where it stands.

Frequently asked questions

What is the difference between a blanket order and a purchase order?

A standard purchase order covers one purchase. A blanket purchase order covers many deliveries over a period, with each one released as needed.

Is a blanket purchase order legally binding?

It depends on how it is worded and where you are. Some commit the buyer to a minimum, others do not. Have the terms reviewed if you are unsure.

What is a release against a blanket order?

A release is a short instruction from the buyer to deliver a set quantity on a set date under the blanket order. Each release reduces what remains.

Can prices change during a blanket order?

Only if the agreement allows it. Many blanket orders fix prices for the period, and others include a review date or a formula. State it in writing.

When is a blanket order a good idea?

When the buyer orders the same products often and in predictable amounts. It is less suited to one-off buying.