Are Your Propane Vendors Costing You More Than You Think?

Running a propane company means dealing with many moving parts – equipment, delivery schedules, safety systems, fuel supply, and service. One of the most significant cost areas that often gets overlooked is vendor relationships. You rely on outside vendors, from tank suppliers to software systems, to keep your business running. But over time, even trusted vendors can start draining your profits without anyone noticing. It’s not always about being overcharged – it’s often about missed value, outdated agreements, or hidden inefficiencies. If you haven’t carefully reviewed your vendor partnerships in a while, now is a good time to do so and identify any gaps.

Start With the Numbers, Not Just the Names
A good vendor relationship shouldn’t just feel reliable; it should show up in your financials. Begin by pulling actual spending data for each vendor from the past 6 to 12 months. Look at how much you pay them, how often, and for what. Compare it to the value you receive. Even a low-cost vendor can become expensive in the long run if you’re not getting consistent quality, timely service, or solid support.

You’ll want to look beyond the unit price. Total ownership costs include delivery delays, product returns, customer complaints caused by vendor mistakes, and even employee time spent fixing vendor issues.

Evaluate Performance and Delivery Timelines
Are your vendors meeting agreed-upon timelines? Do they respond quickly when something goes wrong? In the propane industry, timing affects everything – especially in cold weather. If your supplier is always late or sending partial orders, that hinders your ability to serve your customers well and stresses your team. Even if the product is good, unreliable service affects your bottom line.

Check how long it takes from order to delivery, how often deliveries are missed, and how much follow-up your staff needs to do. The more time and attention it takes to manage a vendor, the less profitable that relationship is.

Review Contract Terms and Renewal Dates
Many propane companies keep using vendors year after year without reviewing their contracts. Over time, those agreements can become outdated. Once competitive, their pprices may no longer reflect current market conditions. You might also miss better terms, loyalty pricing, or more efficient service models.

Look at contract expiration dates, auto-renewal clauses, penalties for canceling, and whether the contract aligns with your current business size and goals. If the contract was written when you were smaller or had fewer clients, it may no longer support your needs.

Assess Vendor Support and Innovation
Do your vendors help you stay ahead or keep things running the way they always have? Some vendors become passive over time – offering no improvements, no proactive communication, and no added value. A strong vendor will share ideas to help you operate more efficiently, provide new services, or show you ways to reduce waste. If your vendors haven’t offered a single improvement in the last year, they might be stuck in the past while your business is trying to move forward.

Talk to Your Team About Daily Concerns
Ask your drivers, techs, and office staff which vendor-related issues slow them down the most. You might hear complaints about software that crashes during scheduling, tanks that take too long to restock, or safety labels that arrive misprinted. These minor frustrations all add up and cost you more than you realize. Your team can give you insight into which vendors make their jobs harder instead of easier – information that’s just as valuable as invoice data.

How This Impacts Your Long-Term Profit
Evaluating vendor relationships is not just about cost-cutting; it’s about getting the greatest value for every dollar you spend. Over time, inefficiencies can grow subtly. A five-minute delay here and a missing part there can translate into thousands in lost revenue over time. You regain control of your margins when you clean up your vendor list and renegotiate or replace the underperformers.

Strong Vendor Choices Mean a Strong Business
You can do much to protect your propane business from hidden cost drains by routinely auditing vendor relationships. It also keeps your operations functioning more smoothly, your team more productive, and your customers better served. A clean, high-performing vendor lineup helps you stay competitive, especially when prices rise or demand shifts. You deserve partners who not only meet your expectations but also support your growth.