Business Smarts: Establishing Vendor Relationships That Protect Your Margins

Poorly managed material costs can shrink your already tight margins. However, if you take the time to develop strong vendor relationships, you can ensure you’re getting the best pricing for this expense.

“By negotiating better pricing or terms, businesses can improve their profit margins without sacrificing quality,” says Mary Angebranndt, a purchaser for Ruppert Landscape, based in Laytonsville, Maryland. “Strong vendor relationships can also lead to exclusive discounts, early access to new products, or more flexible payment options.”                                 

Forming Strong Vendor Relationships

Just like your own client relationships, you need to establish rapport with your vendors. Angebranndt suggests building relationships through phone conversations, visiting the nursery, and attending trade shows or industry functions.

“Having those relationships allows me to get to know the sales representatives, their family and things about their lives,” she says. “I think some of my success as a purchaser is a direct result of the great relationships I’ve formed with my vendors over the years. There are many I consider friends and even a few who are more like family.”  

Brad Stephenson, co-owner and CEO of New Castle Lawn & Landscape, based in Birdsboro, Pennsylvania, says he forms strong relationships with vendors by being authentic and vulnerable.

“How would you treat your employees?” Stephenson says. “Treat them the same way. Respect them. And guess what? They’ll come back, and they’ll want to help you as well. It’s a whole reciprocity thing.”

Stephenson recommends seeking out vendors who have similar core values because they are essentially an extension of your business.

“You need to make sure they’re good people,” Stephenson says. “I’ll go two states away if I know there’s no good people in our area that could serve us. I’ll just go somewhere else and pay extra. I don’t want to help build a company with bad people.”

He says he’s found it helps when they let their vendors know they are New Castle’s chosen vendor. Stephenson also makes a point to direct business to their vendors as he wants to see them succeed.

“When vendors know we value the relationship, they’re more likely to go the extra mile, whether that’s helping us through supply challenges or offering better pricing and service,” Angebranndt says. “In the end, everyone wins.”

Monitoring Pricing

Because material prices are constantly changing, it’s important to monitor prices on a regular basis. Angebranndt advises paying attention to freight and fuel fluctuations in particular.

“I’m always checking in to make sure we have the most current information, whether we’re bidding on a project or placing an order,” she says. “Many of our suppliers are great about keeping us updated on price changes or upcoming increases, which helps us plan ahead and stay competitive.”

Everyone who’s making a purchase at Ruppert is expected to do their homework and get competitive quotes when making purchases. For anything over $1,000, three quotes are expected.

“It’s part of our culture to be cost-conscious and take ownership of those decisions at all levels and in all departments,” Angebranndt says. “We really believe in that old piece of wisdom about watching the pennies and the dollars will follow.”

Stephenson recommends that when you are comparing prices between vendors, you ensure it’s an apples-to-apples comparison.

“One yard for mulch for somebody might be a little bit different for somebody else,” he says. “That was a mistake we made thinking a yard was a yard.”

He says if you don’t have an existing vendor for a certain material, start with a trial period to see who comes out on top.

Negotiation Etiquette

Once you’ve established a strong relationship with your vendors, you can request better pricing without damaging the connection.

“They are more willing to give you the better pricing and will be honest with you if they can’t,” Angebranndt says. “I recently spoke to a vendor about some hollies I needed for a job. Because of our relationship, I was able to give the price I needed, and they were able to meet that price.”     

Stephenson says he lets his vendors know upfront that he expects the best prices from the start.

“If I have to go to you and ask you for better prices and you drop your prices, that’s a problem,” he says. “That means you’re not giving me your best price. I tell our vendors, ‘We’re not going anywhere, but I expect the best prices.’”

By sticking with one vendor, Stephenson says they often receive bulk pricing.

Angebranndt says they also take advantage of bulk pricing and using the same vendors allows them to get the best discounts available.

Stephenson and Angebranndt caution against asking for special pricing or better deals on every order. He says in the past they previously did this.

“It’s key to work with our partners and not beat them up on price,” Stephenson says. “It doesn’t work, and they don’t want to work with you anymore, and then you get a bad name. We had to do a lot of mending just to retain those relationships and make them better in the future.”

In some cases when a vendor isn’t able to drop the price, they can assist in other ways. Stephenson says there have been times when they went over on hours, and they’ll ask their vendor if there’s anything they can do.

“It could be credit or they could find some promo buys out there,” Stephenson says. “If you have a good relationship, they’ll mark down their margin, if you’re honest with them, to continue to work with you, so there’s room for them to move. I think when you’re giving them all your business, and you’re easy to do business with, then they’re going to help you whenever they can, because they know you’re in it for the long haul. If you’re in a jam, ask. The worst they could say is no.”

Other Considerations Beyond Price

While price is an important factor, there are other considerations to take into account as well. This includes delivery times, warranties and customer service.

“In particular, freight timelines and managing deliveries are critical to keeping products on schedule and avoiding costly delays,” Angebranndt says. “Even the best-priced materials lose value if they don’t arrive on time or in good condition. A reliable vendor who consistently meets delivery commitments helps maintain workflow continuity, reduces downtime, and enhances overall project efficiency.”

Stephenson agrees that reliability is critical, as downtime can end up costing your team more in the long run.

“Additionally, strong warranty policy and responsive service can mitigate risks, reduce long-term costs and build confidence in the partnership,” Angebranndt says. “Ultimately, you want a well-rounded vendor who offers both competitive pricing and dependable logistics.”

Stephenson and Angebranndt have also suffered the consequences of opting for a cheaper vendor.

“In 2018, we decided to go with a cheaper lawn care material that had a slow-release nitrogen,” Stephenson says. “The yield was a foot to two feet every single week. We had it cut off because it was such a quick release of nitrogen because it rained every single day.”

In Angebranndt’s case, the new vendor misrepresented the material quality and shipped it to the wrong address. She advises talking to experienced co-workers for trusted vendor recommendations and industry insights.

“Tapping into that collective team knowledge can help you discover new vendors, avoid potential pitfalls, and ultimately make more informed purchasing decisions,” Angebranndt says.