What Happens to My Suppliers When I Sell My Business?
Written by Christopher Krassnig - Founder - Kairos Exchange and ZenoX Media.
Published
- Checks in every memo8
- Automatic on day one3 of 8
- Read by handad spend and processor payouts
- Tracked ecom salesEUR 200M+ZenoX ad-management figures, not Kairos deal volume - Kairos hasn't closed a deal yet.
A supplier contract does not automatically travel with your business when you sell it. Most online store sales are asset sales, so each supplier agreement has to be assigned to the buyer, and a contract can usually be assigned without the supplier's consent unless it says otherwise. Full novation, replacing you with the buyer and releasing you from the contract, needs the supplier to agree.
Selling a store of your own? Join the seller waitlist
What Is the Difference Between Assignment and Novation?
A contract can usually be assigned to a new party without the other side's consent, unless the contract itself says assignment needs approval, which many commercial agreements do. Assignment moves the benefit of the deal, the right to keep buying on the agreed terms, but the original party can still be on the hook if the new party fails to perform, depending on how the assignment is worded. Novation is different and stronger: it substitutes the buyer for you entirely and releases you from the contract, so the supplier is dealing with a genuinely new counterparty from that point on. Novation only happens when the supplier agrees to it, because the supplier is giving up its existing counterparty and taking on a new one it may not have chosen or vetted.
Does an Asset Sale or a Share Sale Change This?
Nearly every online store sale is structured as an asset sale: the buyer purchases the named assets, the store account, the domain, the ad accounts, the customer list, and the supplier agreements that consent to move, not the legal entity that holds them. That structure is exactly what forces the assignment or novation question, because each supplier contract has to be individually assigned or novated rather than carried over automatically with the company. A share sale is the one real exception. In a share sale the buyer acquires the company itself, so the supplier's counterparty never actually changes, and existing supplier contracts usually continue without needing any assignment or novation at all. Small ecommerce deals almost never use a share sale, which is why this question comes up so often.
Where Does a Supplier-Transfer Clause Actually Live?
The supplier-transfer clause lives in the asset purchase agreement, not in a checklist a marketplace ticks off for you. The APA's asset schedule is where a deal actually names which supplier agreements the buyer is taking on, whether each one is being assigned as is or novated with the supplier's written consent attached. That schedule is the single place worth reading closely, because a supplier not named on it does not transfer at all, no matter what anyone assumed. Kairos's own deal room tracks a defined set of platform accounts through to closing, and supplier contracts are not one of them: getting a supplier's consent in writing is negotiated directly between the parties and written into the purchase agreement, not a step any marketplace automates.
Why Is an Undocumented Supplier Relationship a Problem at Sale Time?
A handshake supplier relationship, however good, is not an asset a buyer can price, because nothing on paper says it survives a change of ownership. Kairos's own prep guidance already tells sellers to get supplier agreements in writing before listing, including whether they transfer, and this is why: an undocumented relationship gives a buyer no basis to assume continuity, so it either gets discounted in negotiation or becomes a condition the buyer wants satisfied before closing. A signed agreement with a transfer clause removes that discount, because the buyer can read exactly what happens to the relationship instead of guessing. None of this needs a lawyer before you decide to sell. It needs one conversation with each key supplier, asking directly whether the agreement can move to a new owner and getting the answer in writing.
Answered. Now Get Your Numbers Proven
Sellers on the list go through verification first when we open. Reading up is step one. Having your revenue proven from your own orders is step two.