A food distributor is the lifeline of your business and its most crucial partner. But often, owners view these professionals as simply restaurant suppliers who:
- Drop off boxes
- Send invoices
What if your partnership could go deeper? What if you could leverage this working relationship to increase your margins and grow your business ?
We’re going to explain the steps that you can take to reach these goals below.
5 Steps to Maximize Your Relationship With Restaurant Food Distributors
1. Focus on Your Relationship
Who are your largest food distributors? When was the last time that you had a talk with them? Your first step in maximizing these relationships is to schedule regular check-ins with your point of contact, who may be a manager, salesperson or director.
Yes, it’s easy to go online and place an order with no face-to-face interactions.
But those interactions keep the human touch going and add immense value to your relationship in ways that automation cannot match. Your goal with these relationships is to:
- Help your distributor understand your needs
- Support your goals and brand with products
For example, let’s assume that you run a taco shop. You notice that your customers are increasingly asking for alternative meat products, such as beans or tofu, rather than beef. Your distributor already has a pulse on these products and can make valuable recommendations to help meet these demands.
2. Request Bids from 3 Wholesale Food Distributors Every Year
Food service distributors are in business to make money. As their costs rise, the increase will be passed on to you. If you’re not tracking these costs, you’ll find your margins begin to shrink before you even realize that there’s a problem.
But you also don’t have time to look through weekly quotes to compare prices.
Let’s say that you’re working with restaurant meat suppliers and you purchase 80% of your goods from them (or more). Work on a vendor agreement that benefits you and the supplier:
- You agree to buy 80%-90% of your goods from the supplier
- Suppliers provide better overall service to you
- Higher purchasing amounts give you negotiating power
Vendor agreements are a win-win for everyone involved. You might have higher butter or steak costs with this supplier, but overall, the agreement will save you money while increasing the quality of your service.
But here’s the catch in all of this. While you’re forming these relationships with suppliers, remember that you need to be loyal to your business. Annual supplier bids allow you to maintain high profit margins even if it means you only stay with one vendor for a year or two before making the switch to another with better terms.
3. Monitor Pricing and Negotiate Quarterly
You have an agreement in place with a supplier for the majority of your food, but that doesn’t mean that monitoring prices stops. Quarterly negotiations are healthy for business. Price creep will happen, and while 10 cents here or there doesn’t seem all that expensive, it quickly adds up when a meal that used to cost $5 to make is now $6 .
Here’s what you want to do:
- Monitor your pricing
- Ask why costs are rising
- Pick up the phone and have a conversation with your contact
For you to know if costs rise, take time right now to create a list of your current prices. You can then use this list as a reference to cross check to see if the cost of goods is going up or not .
If you advocate for yourself and fair pricing, it lets the distributor know that you mean business.
Sometimes, costs rise because of economic conditions, which are out of the supplier’s hands. If the rise is due to the supplier trying to increase their bottom line, you can often negotiate it down if you’re willing to find a compromise that works best for both parties.
4. Request for Volume Discounts
Food service distributors are part of your restaurant’s supply chain. If you rely on one distributor to be your main supplier of cheese and buy in large volumes, you have instant negotiating power on your side.
Volume discounts are very common in the restaurant industry and can be added to your distribution agreement. For example, let’s say that you order 3,000 pounds of cheese, a vendor may be fine with offering a 10% discount to keep you as a customer.
You want customers to come through your doors every day, and your supplier wants restaurants to keep ordering from them. Volume discounts when you’re committing to large, consistent orders help both of you reach those goals.
5. Stay on Top of Invoices, Missing Credits and Short Orders
Restaurant food suppliers are human - they make mistakes, too . While you can accept a short order here or there or a few dollars in missing credits, it should never be a common occurrence. Eateries like yours grow when managers:
- Check every invoice
- Verify all items are received
- Stay on top of suppliers
If a supplier delivers spoiled produce, don’t accept the shipment. You must maintain the highest standards possible to keep your customers happy and coming back. While remaining loyal to suppliers is a good thing when you’ve built up a strong partnership, remember that this loyalty must be earned and maintained .
Remember to Be Loyal to Your Business and Choose Your Partners Wisely
Restaurant owners must remain loyal to their business and customers. If the quality of your supplies begins to falter or costs skyrocket unjustifiably, it’s up to you to bring it to the supplier’s attention.
Professional discussions go a long way in ensuring that all parties are on the same page.
Should you give a food distributor a second chance if they’re late or some products are missing? Sure, business happens, and if you have a strong partnership, it’s an occurrence that is worth overlooking so long as it’s rectified.
Partners must work together in these instances, which means discussing what is going right and wrong on both ends. If your supplier fails to make the necessary adjustments or can no longer offer the competitive prices that your restaurant needs to grow sales, it may be worth finding a new one.