How to fire a supplier

How to fire a supplier

Nobody likes the idea of having to fire an employee let alone a supplier. Sometimes the inevitable has to be done and we need to learn the right way to go about it. Listed below are a few steps to consider when you’re forced with a hard decision to fire your current supplier.

How should I go about it?

First you need to make sure this is something you want to proceed with. If for any reason you decide to not go through with a termination, then its best that it’s not approached in conversation, but instead sit down with your supplier and discuss the recommended changes. In the event that you choose to go forth with it, then maintain a courteous relationship as you will need to keep good standing until the end of the contract.

How long should I give?

Typically, every supplier has some sort of written contract that you signed when you entered in the partnership. Check your contract and it should give the necessary information. In the event of a verbal contract there are a few other steps that are required.

Typically a reasonable notice is required and is defined by how long you’ve been with the supplier, how much business your company has given the supplier, how fast the supplier can find someone to replace your business, and what both parties were seeking when the partnership was first started.

Anything outside of the United States may require legal counseling as certain rules apply whereas others do not.

When do you give notice?

When terminating any supplier you want to give them enough time to find a replacement for the revenue that was being generated from your business. However, some suppliers will ask for various payment installments to make up for loss of payment and in turn this can end the contract.

Give a formal goodbye

You want to remain on good terms with your supplier in the event of a termination for multiple reasons. The best way to end termination is to use a hand-typed or written formal letter and have it delivered directly.

Tie up loose ends

Any time you end a contract with a supplier it’s a good idea to tie up all loose ends. For example, some may be required to teach the new supplier proper standards and protocols that were laid down by your company, or maybe there are certain manuals or ways in which your company expects things to be done. Any time a contract from the supplier being terminated requires you to return certain things you want to make sure not only do you receive your materials back, but they do as well. Some suppliers require fee’s for termination as well as whatever costs may be required to teach the new suppliers how things are done and the manner in which they are supposed to be taken care of. In this aspect make sure everything is covered and done. 


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