Notifying A Vendor of a Change

Notifying a Vendor of a Change

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By now, you know time is often a precious commodity in business, and reading vendor contracts word for word doesn’t often rank high on your list of must-dos. After all, these contracts can be long and cumbersome. You can’t very well glean much from a quick glance. That’s why many companies end up in a less-than-ideal relationship with a vendor. And when matters finally come to a head (they always do), you have no other option but to terminate your business arrangement. And we know notifying a vendor of a change can be difficult.

Notifying a Vendor of a Change

“It’s not you, it’s me” just doesn’t seem to cut it these days. While the conversation will never be easy, it must be done, and the following can help with the process:

Plan Your Exit

Getting out of a business relationship is as much of an ordeal as getting into one — just with a bit more financial risk. Get to work on an exit plan, highlighting what you’ll need to do to ensure a successful transition.

Much of this process involves developing a list of who absolutely needs to know about the split. Before notifying a vendor of a change, talk with any managers, coworkers, or additional parties who have any interest in the change. This news may come as a surprise to the vendor, but you certainly don’t want it to take your team off guard.

Note of Any Issues

When things aren’t going well, it’s always wise to document any of the vendor’s shortcomings. Detail exactly what the vendor is doing and whether anything can be done to remedy the situation. If you’re going to be notifying a vendor of a change, put it all in writing and inform them of the issues.

Vendors are usually experts at selling their services to others. When it comes to making a split, they will use every last ounce of energy to try keeping your business. Regardless of their promises to hold up their word and correct any issues, if you’ve had a multitude of problems in the past with no easy fixes, you can guarantee that there is nothing more that needs to be done on their end – it’s time to move on. Ensuring that you have a list of everything which has happened in the past can help make this conversation quick. Notifying a vendor of a change can be exhausting. But they need to know why they lost your business so they can improve themselves for future business relationships.

Negotiate the Transition

In some instances, a vendor may insist on locking you into a contract despite issues in the relationship. If this occurs, negotiate with the vendor on how to exit or terminate the contract. But make sure it is in a manner reasonable to both parties. Most often, vendor contracts serve as a way to secure a business relationship for the benefit of all involved parties. But in the case of a bad vendor, they are only trying to cover their own back.

If termination isn’t an option, consider other ways to end or shorten the relationship. This could include reducing the fees for the remainder of the contract, adjusting the length of the contract, or providing additional services at no cost. Lashback is normal when notifying a vendor of a change, but stick to your guns.

Establish Guidelines for the Exit Process

Once terminated, devote attention to the exit process by establishing guidelines for the transition. Set expectations, milestones, and objectives for all parties involved.

During the process, make sure your actions don’t inadvertently remove your vendor’s expert responsibilities. Governance and performance management are both critical to a successful termination and exit process.

Where Do You Go From Here?

In order to avoid a contentious exit, always review the termination provisions of a contract prior to signing. Oftentimes, it may seem great at the onset, but this feeling may quickly fade in a year or two as you become more familiar with how that vendor conducts business. Make sure you consider all the necessary variables of selecting a new vendor as well.

If you’d like to learn more about how you should handle notifying a vendor of a change, or discuss how Interlog USA might handle your shipping and logistics needs, our team can answer any of your questions.

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