The Vendors Quietly Eating Your Margins
Warren Buffett has a phrase I love: “tapeworm companies.”
The idea is simple. A tapeworm company is a business that embeds itself so deeply into your operations that leaving becomes painful… and expensive. Once they’re inside, they slowly raise prices faster than inflation while quietly eating your margin.
Real estate investor Moses Kagan has written about this a few times, and the concept stuck with me.
And if you run a property management company, you probably have a lot of them.
Why? Because property management businesses have an enormous surface area. We touch leasing, maintenance, accounting, marketing, compliance, communications, and more. That means we end up working with dozens of vendors, platforms, and service providers.
Every one of those relationships is a potential tapeworm.
And every January, a surprising number of them quietly raise their prices. Most operators never notice.
The Tapeworm Pattern
Tapeworm vendors usually follow the same playbook.
First, they become essential.
They get deeply embedded into your workflows, your tech stack, or your data. Maybe your documents live there. Maybe your team runs a key process through them every day.
Then the switching cost becomes enormous.
Leaving means migrating data, retraining staff, rebuilding workflows, and potentially breaking other integrations. So when the price creeps up… you sigh and keep paying.
They’re betting you won’t rip them out. Historically, they’ve been right.
Where I See This Most Often
Some examples I’ve run into recently:
Internet providers are notorious.
I recently had someone on our team call Spectrum and negotiate our office internet bill from $130 down to $100 per month, and we actually got faster speeds. That’s fifteen minutes on the phone for a few hundred dollars per year.SaaS tools are another big one.
All those little apps that cost $5–$35 per user per month add up quickly. Zoom. Calendly. AI note-taking tools. Reporting tools. Integrations.
Here’s a trick: run through the cancellation flow and watch what happens. Many of them will offer a 50% discount immediately to keep you.
Office vendors are sneaky too:
Cleaning services
water cooler delivery
shredding services
photography vendors
after-hours call centers… all of these tend to raise prices quietly over time. If you haven’t reviewed the invoices in a while, it’s worth a look.
Marketing vendors are especially guilty here. Website providers and marketing agencies often raise prices or add “extra services” without much fanfare.
And then there are the big tech platforms:
Dropbox
Adobe
Google Workspace
Slack
Zapier
QuickBooks
In my experience, these almost never negotiate. I’ve tried. (Let me know if you’ve cracked the code.)
But it’s still worth periodically evaluating whether you actually need every tool in your stack.
A Simple Annual Habit
None of this requires a massive project.
Just create a simple annual process:
Once a year, someone on your team reviews every recurring vendor charge.
Call them.
Ask for a discount.
Run through the cancellation flow.
Re-evaluate whether you still need the tool.
It’s amazing how often that one exercise saves real money.
And the best part? You can delegate it.
Don’t Get Starved Out by These Companies!
You want to own tapeworm businesses, not be their customer.
But if you are the customer (which we all are) the best defense is simple awareness.
Audit your vendors. Question your subscriptions. Negotiate when you can.
Because if you don’t… those tapeworms will keep eating.