Rising Fuel Costs: How to Manage Supplier Price Increases AND Good Relationships in Your Trades Business

In the second part of our action plan for managing rising fuel costs, I’m going to give practical advice for how to tackle price rises from your suppliers.

The war in the Middle East is creating surge pricing at the bowsers but escalating fuel costs are affecting more than your own vehicles. They are also shaping how suppliers deliver, price, batch orders, recover freight, and respond to urgent requests.

The ACCC’s current monitoring of fuel prices and the Australian Institute of Petroleum’s weekly reports make it clear that fuel prices AND availability remains volatile. For a trades business, that means every delivery run, emergency pickup, and fragmented materials order becomes more expensive across the supply chain, not just inside your own operation.

As a business coach for trades, I know that every part of the supply chain is under pressure right now. Business owners who panic under pressure risk handling this situation badly. They either become passive and accept every cost increase without question, or they go too hard at suppliers and damage relationships that matter.

Both approaches are weak and will cause harm to your business’ reputation, your profitability or both.

If you run a plumbing, electrical, HVAC, landscaping, solar or building trade business, your suppliers are not just price points. They are part of your service reliability. If you manage the relationship properly, you can often reduce the impact of rising fuel costs without turning the discussion into a blunt discount argument.

In this article, I’ll share the business coaching advice for trades business owners to manage suppliers when fuel costs rise: how to approach the conversation, what to ask for, where to change ordering behaviour, and how to protect margin without creating unnecessary friction.

If supplier pricing and trading terms, freight creep, and ordering inefficiency are already dragging on your profit, a Tenfold business coach can help you tighten the commercial side of your business properly.

1. Start with the right commercial mindset

The first mistake many owners make is treating suppliers as either adversaries or rescuers. Neither view is useful. A supplier relationship should be commercial, respectful, and practical.

Your job is not to pressure suppliers emotionally or accept every change without analysis. As the owner, your job is to understand where the cost pressure is real, where inefficiency is creeping in, and what can be changed operationally on both sides.

Fuel pressure often exposes behaviours that were already leaking profit in a trades business, such as:

• Frequent urgent runs,
• Tiny order values that cost more because you’re not meeting minimum bulk order quantities,
• Multiple deliveries to the same site, costing time to order plus additional freight charges,
• Unplanned pickups because the right amount and/or type of materials weren’t in the van,
• Extra orders because no one checked stock properly when it was delivered to site.

Supplier price increases may be real, but your ordering habits can multiply the effect.

Trades businesses tend blame suppliers for margin pressure when the bigger problem is actually internal disorder. Owners are paying for speed and fragmentation because they haven’t built disciplined purchasing routines. The symptom looks like a supplier issue but the underlying cause is an operations issue.

So my advice as a business coach with over 20 years experience coaching tradies is this: the right starting point is to assume the external supplier pressures are real, but also assume your own processes may be making it worse. That mindset leads to better conversations and better outcomes.

Action to take now

• List the last 10 urgent supplier runs your business made and identify which ones were caused by poor planning rather than genuine urgency.
• Review your current ordering habits and flag where your team is placing too many small or reactive orders each week. (I’ve provided step-by-step AI / ChatGPT instructions in the FAQs – see: How do I improve materials ordering?)
• Write down the three biggest supplier-related frustrations in the business and separate what is a supplier issue from what is an internal process issue.
• Set one rule this week to reduce fragmented purchasing, such as no same-day order unless approved by the owner or operations manager.

2. Ask better questions before you argue about price

When suppliers increase freight charges, apply fuel levies, or tighten delivery terms, many trades business owners go straight to resistance. That is understandable, but not always smart. Before you push back, find out exactly what has changed and how it is being applied.

Questions worth asking

• Is the increase temporary, variable, or now built into standard pricing?
• Is the cost linked to delivery frequency, distance, minimum order value, or urgent turnaround?
• Can charges be reduced through batching or set delivery days?
• Are pickup and delivery options priced differently?
• Which sites, regions or order types are driving the extra cost?

Those questions matter because they move the discussion from emotion to mechanism. Once you understand the cost driver, you can look for leverage.

If the issue is fragmented ordering, fix that. If it is emergency delivery, reduce that demand. If it is minimum order value, consolidate purchases.

A materials supplier is far more likely to work with you when you approach the problem commercially instead of just arguing that prices are too high.

Action to take now

• Choose your top three suppliers and call each one this week to ask exactly how fuel-related charges are being applied.
• Create a short checklist of supplier questions for your admin or purchasing staff to use whenever pricing or freight changes.
• Request a written breakdown where a supplier has added a levy, freight increase or changed delivery threshold.
• Document which suppliers are charging for urgency, distance, low order value or fragmented delivery so you can compare them properly.

3. Consolidate ordering to reduce freight and improve your negotiating position

One of the simplest ways to protect margin during fuel-cost pressure is to order less often and order more deliberately. A trades business that places five small orders a week will usually pay more in freight, incur more admin, and create more disruption than a business that places two larger, better-planned orders.

This is especially relevant where your work is repetitive, your material consumables are predictable, or your projects can be staged properly. Standard fittings, cable, pipe, fasteners, safety stock, common maintenance parts and frequently used materials should not be triggering constant ad hoc purchases.

At Tenfold, the advanced trade businesses we coach invest their time in tightening purchasing discipline than spend the same energy complaining about supplier pricing. That is because batching gives you three advantages at once. It cuts delivery exposure, improves planning, and gives you a stronger position when discussing terms with suppliers.

At Tenfold, when we work with trade business owners on margin protection and recovery, good purchasing systems deliver bankable results. Once ordering becomes more deliberate, businesses find that some of the freight pain was self-inflicted. They were paying for avoidable urgency.

Action to take now

• Pull the last four weeks of purchase orders and count how many were small, urgent or placed outside your normal ordering rhythm.
• Set two fixed ordering days each week for standard materials instead of allowing constant ad hoc ordering.
• Build a shortlist of consumables and commonly used items that should be ordered in planned batches, not reactively.
• Assign one person to consolidate orders across jobs before anything is submitted to a supplier.

4. Negotiate service structure, not just unit price

Many owners negotiate too narrowly. They focus on the price of the item and ignore the delivery structure wrapped around it. At a time when we tackling rising fuel costs, that is a mistake. The best supplier negotiation is often about how the product gets to you, not just what the product costs.

What to negotiate

• Set delivery days for regular stock.
• Free delivery above a realistic minimum order threshold.
• Reduced charges for grouped site deliveries.
• More accurate cut-off times for same-day dispatch.
• Clearer lead times so you can avoid urgent premium freight.
• Consolidated invoicing to reduce admin friction.

This is where a good supplier relationship becomes valuable. If you have a history of paying on time, ordering consistently and communicating clearly, you are in a stronger position to ask for these adjustments. That is why maintaining the relationship matters. The goal is not to win one aggressive negotiation. The goal is to build a working arrangement that protects both service reliability and margin.

Good suppliers understand this. They also want predictable demand, fewer avoidable emergency requests, and customers who are commercially organised.

Action to take now

• Identify your top five suppliers by spend and list which service terms matter most for each one: delivery days, thresholds, lead times, freight, or invoicing.
• Ask at least one key supplier this week for a structured arrangement such as fixed delivery days or reduced freight above a set minimum order value.
• Compare whether grouped site deliveries or branch pickup is more commercially sensible for your busiest jobs.
• Write down the specific service changes you want before the conversation so you negotiate from a plan, not frustration.

5. Use data, even if it is basic

You don’t need sophisticated software to manage supplier exposure properly. But you do need more than memory and frustration. If you want to protect margin and have better discussions with suppliers, track a few simple things for the next month.

Track these items weekly

• Number of supplier pickups made by your team.
• Number of urgent deliveries requested.
• Freight charges as a percentage of materials purchased.
• Number of orders below your preferred minimum value.
• Return trips caused by stockouts or missing items.

Once you can see the pattern, you can respond properly. A lot of owners believe the supplier relationship is the issue when the data would show that internal stock planning, job preparation or quoting accuracy is the real problem. Even a simple spreadsheet can make this visible. The point is not to produce a beautiful report – don’t waste time making it look good – you just need to have the data so you can have sensible conversations with your suppliers and make informed decisions about stock ordering and management.

As with most commercial issues, the owner who can point to a pattern has more leverage than the owner who just feels annoyed.

Action to take now

• Set up a simple spreadsheet today to track urgent orders, supplier pickups, freight charges and stock-related return trips.
• Record every supplier run for the next four weeks, including why it happened and who requested it.
• Review freight charges as a percentage of monthly materials spend so you can see whether the issue is growing.
• Bring these numbers into your weekly management meeting and make one operational decision from them each week.

6. Protect supplier goodwill by being a better customer

There is a blunt truth here. Some trades businesses want supplier flexibility without behaving like good commercial customers. They pay late, order chaotically, demand urgent turnarounds, or shop around and then act surprised when charges rise or support softens. That is not a pricing problem. That is a relationship problem created by poor habits.

If you want suppliers to work with you during a fuel-cost spike, become easier to work with:

• Pay on time
• Forecast regular demand where possible
• Give notice
• Reduce needless changes
• Keep communication clear
• Confirm delivery details properly
• Be respectful of time spent quoting your orders
• Ask for (and expect) a fair price but don’t shop around excessively

Those behaviours matter more than many owners realise.

The business.gov.au guidance on payments and invoicing is aimed at business operators generally, but the principle applies here as well: disciplined payment and administration underpin stronger commercial relationships.

A supplier is much more likely to hold pricing, prioritise delivery or work through issues with a customer who behaves professionally.

At Tenfold, we often see the best supplier relationships sitting with businesses that are the most organised and collaborative, regardless of how much they buy. Reliability creates leverage.

Action to take now

• Review your current accounts payable ageing report and clear any overdue supplier accounts that are hurting goodwill.
• Nominate one person to own supplier communication so instructions, changes and delivery details are not scattered across the team.
• Give key suppliers better forward notice on upcoming jobs, stock needs or seasonal demand over the next month.
• Reduce last-minute order changes by confirming quantities, site details and delivery requirements before the order is placed.

7. Know when to challenge, when to switch, and when to simplify

Not every supplier relationship should be protected at all costs. If charges are creeping up without explanation, service reliability is poor, or freight structures no longer make sense for your model, you need to make a commercial decision. Sometimes that means challenging the arrangement. Sometimes it means simplifying your supplier base. Sometimes it means moving some spend elsewhere.

But do not make those decisions emotionally. Compare the full commercial picture. Unit cost matters. Freight matters. Lead times matter. Product availability matters. Rework and delays matter. Admin burden matters. Credit terms matter. A supplier who looks cheaper on paper can still cost more overall if they create disruption or force constant urgent pickups.

This is where many owners oversimplify. They chase nominal price savings and ignore the total cost-to-serve. In a fuel-sensitive environment, that is a dangerous way to buy. The right question is which supply arrangement gives your business the best combination of margin protection, reliability and control.

Action to take now

• Review your top suppliers and score each one on price, freight, lead time, reliability, admin ease and payment terms.
• Identify one supplier relationship that should be challenged commercially and one that may need to be replaced or reduced.
• Compare the true cost-to-serve across at least two suppliers for the same product category, not just the unit price.
• Remove unnecessary supplier duplication where it is creating admin complexity without giving you meaningful buying leverage.

Bringing it all together

Rising fuel costs put pressure on supplier relationships, but they do not have to damage them. Handle this situation well by taking these actions:

• Ask better questions about how pricing is being applied and what factors are within your control,
• Reduce fragmented ordering,
• Negotiate the service structure around supply,
• Behave like strong commercial customers,
• Make decisions based on the total cost of the relationship rather than one invoice line item.

In my experience, fuel pressure often exposes problems that were already there: chaotic purchasing, weak stock planning, too many urgent requests, and vague supplier management. Once you fix those, the relationship usually improves and so does margin. The supplier issue becomes more manageable because your own business is more disciplined.

If rising freight, delivery charges and ordering inefficiency are cutting into your profit margins, this is exactly the sort of practical commercial problem one of Tenfold’s business coaches for trades businesses can help you work through.

The goal to build a stronger, more controlled business on your side of the relationship. Taking smart actions will position your business for fair and consistent pricing that supports decent profit margins for you and your suppliers.

FAQ

Should I push back on every fuel price increase from suppliers?

No. First work out whether the increase is genuine and what is driving it. Then decide whether the better move is negotiation, ordering changes, or supplier review.

What is the fastest way to reduce supplier-related fuel cost pressure?

Batch orders, reduce urgent runs, and set regular delivery patterns. Those changes usually create immediate improvement without requiring advanced systems.

Is it better to collect materials myself or have them delivered?

That depends on distance, staff time, vehicle use and frequency. Many owners underestimate the true cost of pickups because they only look at fuel and ignore labour time and disruption.

How many suppliers should I be using?

There is no perfect number. Too many suppliers can create admin complexity and weak buying leverage. Too few can create dependency. The right structure is the one that supports reliability, commercial control and sensible freight outcomes.

What should I review first in my own business?

Look at how many urgent orders, pickups and low-value purchases you made in the last month. That will usually tell you quickly whether the supplier issue is partly an internal planning problem.

How can I use AI to improve materials ordering?

Here’s the step-by-step for using AI to review supplier ordering and purchasing habits.

Step 1: Run a report on purchases for the last 4-8 weeks

• In Xero, run the Payable Invoice Detail report. In MYOB, it’s the Bills report.
• Set the date range to the last 4 to 8 weeks (or longer, based on your business’ purchasing activity)
• Export it to Microsoft Excel

Step 2: Clean the spreadsheet before using AI

If needed:

• remove total rows
• make sure supplier names are consistent
• keep one row per invoice line where possible

It doesn’t need to be perfect – just make it clean enough that AI can interpret it.

Step 3: Upload the Excel file into AI (ChatGPT / Claude / Gemini / CoPilot) and ask AI to clean and classify the purchasing data

Use this prompt:

I run a trades business in Australia. This file is shows supplier invoices for our last reporting cycle.

Please:

1. Clean and standardise supplier names where needed

2. Identify duplicate or inconsistent entries

3. Flag low-value purchases that may indicate fragmented ordering

4. Group similar purchases by supplier and week

5. Highlight any patterns that suggest reactive or urgent ordering

Then give me:

– a summary of the main purchasing patterns

– obvious data issues

– areas where ordering looks inefficient

Step 4: Ask AI to identify the real operational patterns

Then use this second prompt:

Now analyse this purchasing data for operational inefficiencies.

I want you to identify:

1. Suppliers receiving too many small orders

2. Repeated purchases from the same supplier in the same week

3. Signs that standard materials are being ordered reactively

4. Orders that may have been caused by poor planning, stock control, or job preparation

5. Any ordering patterns that are likely increasing freight, pickups, or admin time

Then give me:

– the biggest inefficiencies

– the likely root causes

– the commercial impact areas

– the top 5 changes I should make immediately

Step 5: Ask AI to turn the findings into rules

Once the patterns are clear, use AI to create practical controls for the team.

Use this prompt:

Based on this analysis, create simple purchasing rules for my trades business.

I want:

1. Rules for batching standard purchases

2. A definition of what counts as an urgent purchase

3. A rule for low-value or ad hoc orders

4. A weekly purchasing review process

5. A short instruction list for admin staff and supervisors

Keep it practical, commercially focused, and easy to implement.

Step 6: Turn the output into action

Use the AI output to create:

• a shortlist of suppliers receiving too many fragmented orders
• a list of frequent low-value purchases
• a weekly ordering rhythm
• a definition of urgent versus planned purchasing
• a set of rules for admin, supervisors, and field staff

Step 7: Review again in 30 days

After putting the new rules in place, rerun the same report in Xero or myob the next month and compare the pattern. That gives you a simple way to check whether purchasing behaviour is actually improving.