Formula text field isn't working with IfNull()

I have a formula text field with the following formula: If(IsNull([Preferred Vendor(Form)]),[Item List - Preferred Vendor],[Preferred Vendor(Form)]). The [Item List - Preferred Vendor] field is a lookup field. I want to be able to change the preferred vendor if need be, so I tried creating a field that would look to see if I entered a different vendor in the [Preferred Vendor(Form)] field, and if I had not then it would default to the preferred vendor that's already listed. It's not working though. It will fill in the field if I have entered a value into the [Preferred Vendor(Form)] field, but if there's nothing in that field then it just shows up blank. Am I doing something wrong with the formula? 

Thanks for the help.