11 Clear Signs It’s Time to Cut Ties with a Vendor

signs that it's time to cut ties with a vendor

Maintaining good relationships with your vendors helps ensure that you consistently receive the goods and services you need and achieve mutually beneficial goals. But when the buyer-supplier relationship begins to sour for whatever reason, it may be best for your business to cut ties and move on.

To help you determine whether it’s time to seek out a new vendor partnership, 11 Young Entrepreneur Council (YEC) members shared their insights on the following question:

“What’s one warning sign that it might be time to cut ties with a particular vendor, and why?”

Here’s what YEC community members had to say.

1. They Won’t Renegotiate Redlined Clauses

“Sometimes it’s hard to know which side people are on or if they will even change sides. If you redline a harmful clause in your contract and send it back to a vendor, they will react. There’s no problem if the reaction is a compromise. If it’s not, and things escalate, end the relationship. Compromise strengthens aligned relationships and breaks misalignment.” ~ Sean Adler, GZI

2. They Can’t Deliver Within an Expected Timeline

“Our saying is, ‘You are only as strong as your weakest partner.’ If our vendors can’t deliver consistent products or within the timelines our customers expect, we move on quickly. There is always another great vendor out there who wants to work as hard and as thoughtfully as we do.” ~ Michael Barnhill, Specialist ID

3. They Affect the Quality of Business Operations

“A big red flag is when vendors begin to affect the quality of your business operations and offerings. This might look like failure to deliver supplies on time, quality going down or failure to communicate. Of course, mistakes can happen. But if the situation becomes a pattern, it’s a sign to move on before their lack of discipline disrupts your business operations and dampens quality.” ~ Blair Thomas, eMerchantBroker

4. They Stop Providing Product Support

“If a vendor stops providing product support, then it may be a good time to cut ties. Customers want to have a reliable source of information when trying out a new product or service. Business clients are no different; if you are not given any communication or contact when solving a problem, then you may want to switch providers.” ~ Duran Inci, Optimum7

5. Issues Continue to Occur

“The most significant warning sign in vendor relationships is when you’ve already communicated a problem and the issue continues to occur. Likewise, it’s also a bad sign if the communication has drastically changed or stopped between you and the vendor — or even worse, the communication has turned hostile. If the issue persists, it may indicate they are not up to par with the demands of your business and you need to take your business elsewhere.” ~ Jared Weitz, United Capital Source Inc.

6. They’re Causing the Bulk of Your Problems

“The Pareto principle states that roughly 80% of the outcomes come from 20% of the sources. If you notice that 80% of your problems are coming from one particular vendor, it’s time to cut ties.” ~ Rachel Beider, PRESS Modern Massage

7. They Aren’t Communicating Important Information

“The biggest red flag is when vendors aren’t forthcoming about delays, price changes, quality issues and more. They may disregard requests for information and operate outside of professional norms. In these instances, it’s obvious that the vendor is working in their best interests and not yours.” ~ Firas Kittaneh, Amerisleep Mattress

8. The Vendor Is Supplying Subpar Products

“If the product or service the vendor supplies is subpar and causing harm to your reputation, you should seek an alternative. Maintaining your standards is important, even if customers don’t notice right away. Eventually, it will catch up to you, so it’s not worth it even if it saves you a little in the short term.” ~ Kalin Kassabov, ProTexting

9. You Can’t Rely on Them

“Your business has so many aspects that demand your attention that you must insist on reliability in the people you work with. This is a reasonable standard, but remember, your vendor’s reliability has a direct impact on your own reliability. Nobody is perfect, but if you see some consistent failures of reliability, it’s time to start shopping around.” ~ Tyler Bray, TK Trailer Parts

10. They Have High Customer Turnover

“If a vendor has high customer turnover, I’d probably stay away from them. I wouldn’t make the decision right away, but the scenario would definitely raise a flag for me. I’d explore the reasons why people are leaving that particular vendor. For that, I may get in touch with a few of those people and find out.” ~ Stephanie Wells, Formidable Forms

11. They Start Acting Like Your Competitor

“One of the biggest red flags with any vendor is if they start trying to compete with you directly. This means they don’t respect the relationship and are more interested in their own bottom line. It can also lead to tension and conflict later on. If a vendor starts acting like they’re your competitor, it’s time to reevaluate the relationship.” ~ Sujay Pawar, CartFlows

Image: Envato Elements

The Young Entrepreneur Council The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.