Advice in dealing with Food Distribution Reps

Hello all,

I am about to start shopping the food distribution market to look for a distributor. In doing so, since I have no experience in dealing directly with them, I am looking for a few helpful hints and tips that I can use to my advantage, or even just words of advice or caution when dealing with the reps.

Basically anything you can tell me that will help me and not enable the rep to think “hey, this guys new…I can screw him over easily”.

Thanks in advance!

-PBG

Just keep in mind that these guys are evaluated by two criteria. First is the percentage markup they yeild and second is new customers that they bring to their company. I can almost guarantee you that once you pick a distributor, your costs will increase faster than most because they will start you off low, just to get you to start buying. Once they get credit for bringing you in as a customer, they now have to get their percentages in line.

Try to negotiate a certain price over the block market for your cheese. Many distributors use the weekly average two fridays previous meaning if you were getting delivery today you would pay $1.915 plus your negotiated price over. By setting this up, you keep the distributor from raising your price at first sign of increase in block market, but only slowly decreasing as market declines.

Don’t be too quick to settle on a distributor, and don’t be shy about asking for free samples!

You will get different opinions on this so take all with a grain of salt (mine included)

I have owned two pizza places going on nine years. My advice is to use two distributors. Compare the prices weekly and buy from the one with the best price on an item by item basis.

If one of them gives you lousy service, call the company and ask for a different rep, if that does not work, drop them and pick up a different company, but I think you find that they are pretty professional outfits and the service will be fine.

If a company solves a problem for you by finding a great product, but it from them for a while (6 mo or a year) before shopping the price. That is the reward to them for solving youor problem.

i’m with Bodegahwy,

I use 3 distributors. Some items are more expensive than from the other ones. They will give you great prices in the beginning, and will raise everything on you a few weeks later. Just keep an eye on them, and protect your pocket.

I ALSO AGREE WITH MR.HWY
USE 2 VENDORS,CHECK PRICING BEFORE YOU BUY.
LET THEM KNOW YOU ARE USING MORE THAN ONE VENDOR.
I USE 3 REGULARLY , AND UP TO 5…

as a former food salesman…

using two companies is fine, to watch the prices…

they have a biz 2 run & need 2 make a profit…

if a customer buys 50 pies from you, on a weekly basis, do you cut them a “deal”…if you are a small operation or only give them small orders, they are not able to give you “great” prices…it costs the comp. $75 or so each time they stop @ your door…most salesmen maintain an 85% food cost…they may charge the guy who orders a little product more and give the guy who gets a $1,000 order a better break…most comp. require a minimum order of $500 in order to make any dough on the stop…

yes, you can get some items from Sam’s cheaper, but remember 2 factor in the cost of your time…Sysco, USFoods, ROMA etc don’t get much of a better deal on buying, as they are all buying at the best price…where they make their $$$ is in selling the slotting/spaces to new vendors/products etc, just like grocery stores…yes, they mark up their items, but it is a costly bis 2 run…

remember, no salesman will bend over backward for a lame customer…

For 11 years I always had two or sometimes three suppliers and I played the game of always checking prices and beating them up I got good prices and ok service this way. Last year I tried a new approach I picked one supplier and negotiated a cost plus deal. Now I get better prices and great service. I now have suppliers offering me all kinds of perks to get my business because I am offering larger volume. Just another way of looking at the buying game.

Do be sure to look at delivery policies and schedules. I had one supplier advise me that they will deliver to my area once a week on Thursdays, and I have to have my order to the rep by Monday. :shock: Yah, right.

Ask about the scheduled runs to your area. If you are in a metro area, then you may be in good (daily delivery possible) shape. Also find out their willingness to guarantee a window of time. I get orders from 8am to 5 pm depending on the driver and circumstances. So, no absolute guarantee, but at least ask. Also find out the return and crediting policies on all types of goods from canned to produce to frozen to meat/chicken/seafood.

All good additional services that can make a couple extra bucks a week worthwhile.

I’ve gone over and over the 1 vendor vs 2 vendor scenario for quite a while. I even posted a similar question on here not too long ago.

I ultimately decided to stick with 1 vendor. I can price shop every week and spend time trying to save a few bucks, but I find I get amazing service when I’m loyal to 1 vendor. In this case, right now, it’s Sysco. They’ve aggravated me a few times, but when I have any kind of trouble I have the DM or the local president calling or visiting me. That probably wouldn’t happen if I was nickel and diming them every week.

Our orders are between $2,500 and $3,000 every week, and we put it all on one truck. We’re still a street account, so that makes us a pretty big fish in a little pond and gives us a lot of pull with our rep and DM.

To me, having a great relationship with the vendor is more important than saving a few bucks by shopping every week. That said, I still keep them honest by checking prices versus their competition. I constantly have 2 other vendors visiting me trying to get their piece of the action, but nothing has made me move yet.

i agree with piper and patriot, one vendor and keep them honest is the way to go, they will bend over backwards if you are giving them the business

ask him/her how long they have sold pizza groceries, their recommendations, if they sell on price beware

I suggest you contact ROMA Foods…www.vistarvsa.com…
the best pizza supplier in the country

All great replies…thanks to everyone.

Keep em coming! :slight_smile:

They are my once a week/3 days ahead ordering vendor. Like to try them, but not at all on those terms . . . and they sent me a rep hired two weeks earlier and didn’t know their product list. I think they could be a gret company for those who get more access and more knowledgeable rep coming by.

Nickles and diimes?

Compared to the sole source pricing my vendors have supplied when they have tried to get me to change the cost savings is more like $5000-$6000 a year. For that money I can spend a half hour every other week or so double checking the pricing from both of them.

Our total food buy last year was about $175,000. Service from both is just fine. If it was not I would drop them.

Ahhhhh nickles, dimes, quarters…why bother? HMMMMM

Just had discussion with my managers about this…

Do we really think we are going to find some area in our business that in one shot we can save hundred or a thousand bucks? The answer is no.

But I can go in each and everyday…each and every minute and see nickles, dimes and quarters being wasted. I am truly convinced finding and collecting all of these is what is going to make me money.

10 cents a pizza for weighing cheese
3 cents a pizza for counting flat meats
2 cents a container from cheaper vendor
25 cents employee time clock running
5 cents a pound for each and every pizza topping bought from cheaper vendor.
20 cents a pound for cheese from cheaper vendor
2 cents on 100,000 flyers because I bought bulk
30 bucks in long distance calls
10.00 a day in employee pricing errors

The list is on and on and on…I think it adds up.

Kris

Kris,

I agree with the basic logic of your argument. I do believe that controls put in place to eliminate waste/poor portioning will make huge differences in our bottom lines. I also agree that controlling goods purchase pricing is a good overall practice.

I do not, however believe for myself that the quibbling over pricing with each and every vendor is that productive, and can actually be counterproductive to relationship building. By extending the logic, we should have accounts with 8 or 10 vendors and spend time each week tracking the pricing of every single item we intend to purchase that week . . . and the others on our items list in case we get a price drop we should capitalize on.

I am not at all saying that we should ignore comparison pricing, as it is an effective way of managing costs. I am saying that we should make that fit into the overall picture of the business and relationships we have. We can spend hours of productivity time to save that $10 to $50 a week, which really is a loss in total. Big picture . . . and opportunity costs are just as important as saving 5 cents on a pound of pepperoni.

Nick,

As you may remember I posted a few weeks ago about one of our vendors coming to us and wanting to be our sole vendor. We would do a contract of 6% over their cost.

So I am in the midst of learning what you are talking about and asking myself is it truly worth it to switch. Cause as you stated right now I do spend about an hour week going over price lists and deciding who to buy stuff from.

But here is what I have found odd the past week and a half.

We switched one of the stores over to the 6% over cost. The other one remained the same. In just one invoice I paid 250 more bucks than if I would have done it by choosing the vendors. Odd isn’t it? And that was just one store.

I totally get what you are saying about loyalty and “investing” in a sales rep and the relationship. But 10 years ago I checked prices after doing it for 3 years and found my trusted rep was ripping me off. That is how I came to order from 3 vendors.

And now for this guy to be begging for my business relationship and not even figuring out for himself that the identical stuff he is sending to my other store is 5.oo…10.00 cheaper a case. I just get confused.

We will probaly spend about $300,000 plus in food this year and if I can save 10%…heck even 5% of that and put it in my pocket I think it is the way to go…

Like I said I am still trying to figure all this out…we have been open 13 years and just opened our 2nd store so I have tons to learn and it seems not a day goes by I haven’t learned something.

I need to crunch the numbers on the other 3 invoices still and see.

I truly appreciate and respect what you have said.

Kris

Trust and loyalty are great if they run both ways. The fact is that, even when you have a good rep and they are loyal to you, the big multi-national they work for is not. Your food rep only has control over a small portion of the pricing equation. The company they work for has another piece and the vendors/distributors that supply them have even more. When I get an extra $3 a case on tomato product it comes from the distributor, not the company or the rep.

Sole source buying WILL cost you more money unless you have perhaps a million in annual buying; even then you need to watch them like a hawk.

If the service you get is worth it, fine; that is a decision for each of us to make for our business. Do you need “extra” service? Why do you need it? Are the food reps solving problems that you made for yourself? If so, paying higher prices may be well worth it.

We have three vendors that serve our market, we buy from two of them. If one of them failed to provide good service I would switch to the one we do not currently buy from. In 9 years we have had the same two reps serve us. We have never switched vendors. I have no complaints with the service from either of them. They both know how to get more business from me.

I am convinced that I am saving a lot of money doing it this way. In the last few months alone I have saved close to $2000 on cheese shopping back and forth as the prices move. Counting food shows and time spent on price comparison, I spend about 30-40 hours a year on “shopping” the prices. I would guess that I make better than $200 an hour doing it. Those are bottom line dollars that go in my pocket. I would not do it for that much additional sales, but you better believe I will for net dollars.

I buy a lot a product. I pay my bills on time. Our orders are ready when they stop in. I don’t call my reps with emergencies more than once or twice a year (I hear from them that they have accounts that call twice a week)

Bodegahwy made really good points. When a couple bucks a case here and there leads to huge money, then the time spent is worth more to the business. The whole economy of scale thing is at play.

I also here you. I do not make the point to trust blindly. As Ronald Regan said “Trust, but verify. . . Play, but cut the cards”. If I find my rep is ripping me off intentionally, it’s time to kick that rep to the curb and find a new source. I am very pleased that I am finding VERY little over-pricing for my invoices. It is usually on commodities that I use infrequently . . . cheese, sauce, boxes, sauce, etc. are at or close to the prices I find with competitors. I haven’t checked in a month or so since I have had hands full. Trust, but verify.

Nick is right, you do have to take scale into account. When the price of cheese is 10 cents a pound better at one vendor or the other (happens pretty frequently lately with cheese moving the way it has) the difference is over $4 a case. I have seen differences as high as 25 cents a pound in the last 120 days. I buy nearly 1000 cases of cheese per year.

For some reason I also find that items I don’t buy as much of like artichoke hearts (probably 40-50 cases per year are as much as $6-$8 different per case. Sometimes I have seen Roma Toms (100+ cases per year) differ by $10 per case depending upon where a particular vendor was buying that week and the weather there. Flour does not move as much, but still is often different by $1 a bag and I buy 1000 bags of that too.