Certainty and savings are two things any lawn care operator would love to have, and early order programs can deliver just that.
These programs allow you to order the products you need in advance and reap financial savings as well through discounts, rebates and extended payment periods.
“Early order programs can seem very daunting, and there’s a lot of them,” says Kevin Laycock, director of category management for SiteOne Landscape Supply. “I would start at a very focused perspective and pick a portion of your business, maybe get a pre-emergent herbicide, because that’s earlier in the year. You’re going to be using that earlier in the year and it certainly gives you an opportunity to participate in EOP.”
The Benefits of Early Ordering
Depending on who you ask, the savings can range from 2 to 3% all the way to over 20%, based on the product, quantity ordered and when you order during the program.
Dana Irwin, vice president of operations and COO of ExperiGreen Lawn Care, based in Mishawaka, Indiana, says the savings will depend on each manufacturer or vendor. Some may offer a rebate or free product if you reach a certain volume level, while others offer extended payment terms.
“From a cash flow perspective, it puts people in a really good position where they can buy their early season and mid-season needs and use it, get revenue from it, prior to the payment terms being due,” Laycock says.
Chase Coates, owner of Outback Landscape, based in Idaho Falls, Idaho, notes you should also factor in the cost savings of having the materials delivered once versus having a technician have to pick up products, bring them back and unload them various times in the beginning of the season.
Josh Wise, CEO of GrassRoots Tree and Turf Care Inc., based in Acworth, Georgia, says another benefit is that it ensures that inventory is available right when you need it.
The Drawbacks of Early Ordering
Early ordering does lock you into orders well in advance, and it places purchased products in your inventory that are not producing revenue yet.
Wise says some other cons to early ordering include having to reach a minimum product order quantity to receive the benefits and having to plan next year’s program far ahead while not being able to adjust the program based on weather impacts.
Coates says another potential drawback of early ordering is having a safe and secure place to store bulk quantities of chemicals. Some materials will degrade if left on a pallet out in the sunlight. He suggests thinking through the logistics of storing that much material to keep it safe.
Laycock says that in times of pricing volatility, like during the pandemic, early ordering could lead to times of buying when prices are high and end up coming back down. He says in a normal market, there aren’t a lot of downsides to early ordering.
Irwin says the key is forecasting accurately the existing number of customers to service, expected cancellations and new sales to determine how much to order.
“It’s really trying to navigate what your business expectations are for the coming year and securing material for that as much as you’re comfortable with,” Laycock says.
Making the Most of Early Order Programs
If you are considering using an early order program, don’t let storage issues completely discourage you. Wise says you don’t have to receive all the products at one time if this is a problem.
“The supplier can deliver the products gradually as we need them as long as the total products ordered are received by the end of the term,” Wise says.
If you are strategic with your purchasing, you can increase your savings as well. For instance, Coates says they pay with the Spark Capital One card as it gives them unlimited 2% cashback.
“If you do early order, you’ve got 90 days or 120 days to pay then we’ll pay that bill with the 2% Spark card,” Coates says. “It gives us another 30 days and we take another 2% off the top of that product. There are ways to get creative with stacking the early order and then the way that you pay for it without paying interest.”
Wise says manufacturers can also give you credits for ordering early, which is returned in either the form of credit or money at the end of the EOP term.
“EOP payment is not due until the end of the term, which is usually around June of the coming year,” Wise says. “Payment can be made any time as long as it is paid in full by the end of the term.”
Laycock notes that SiteOne relaunched their partners program and it’s incorporated into their early order programs. Users can benefit from the regular savings with an early order program and also collect reward points that can be redeemed on future purchases.