I’ve been working with a local food vendor since a couple weeks after we took over our store. I like to spend my money locally as much as possible, since we’re an independent store. Our rep is extremely nice, always ready to help and the warehouse is just a few blocks away which is great considering our limited space and my uncanny ability to miss important items when doing inventory.
I’ve recently started getting items from Roma as well, although most of it is items that I was getting from Restaurant Depot, which is 90 miles away. They also do a lot higher volume in the products I use, so they’re generally about 5-10% less than my local vendor. It’s getting to the point that I can’t overlook the pricing difference anymore, but I like my local vendor soooooo much more.
I’m not really sure what kind of ability my rep may have to adjust my pricing. What are the chances he would be able to drop down to the Roma prices in exchange for a higher volume? I’m going to give him a price list from Roma tomorrow and talk to him, any advice or things I should bring up that may help?
Here is the point. F restaurant depot, its gotta be a 5 hour thing. 90 miles? thats 180 miles both ways. Your just putting for 5-10% savings right into your car. and time. Let me ask you the most improtant question…Is your local vendor putting money away for your new porsche? or kids college? I’m all about loyalty but 10% a year because you like someone?..Jump Ship right now. keep your new guy on a short leash and make sure your vendor knows you may be back for the right price. This is a game, play it, and never get all personal about who you buy from. Thats your money.
Your position sounds very familiar! We’ve been in business now officially only 30 days, we use a small regional food service for 99% of our purchases. The last week we’ve finally taken time to sit down and do some pricing with at least 2 other distributors, one another small regional player, and two, US Foodservice. I like ALL the reps, but I like money in my pocket even more. We switched up the bulk of our produce orders and our paper goods this last week to local number 2 making a purely price & delivery decision. USF is still way out of the ballpark on pricing.
We also love shopping with Restaurant Depot and like you, it’s a 90 minute trip one way. But, we have our youngest son living about 20 minutes further “up the road” from our nearest RD so we just plan a day of it, figure we’d most likely be driving up to see him maybe once a month anyway so it all works out. The money I save on many of the products there more than pays for our fuel and usually a meal.
Don’t get caught up falling in love with only one provider rather, fall in love with saving that extra couple of hundred bucks each month and get your shop paid off quicker so you can get to the beach!
Stop going to RD its costing you time and money. I have one day off a week I cant imagine spending driving 90 miles to save 100 on cheese.
As far as your vendors go. I advise you to take a minute and think about swapping. PFG/Roma work with high pads. Right now as they gain your business they will drop their pants. The rep is most likely pricing you at .01 or a penny, over his cost to get the business. Now I would take advantage of this by purchasing, you get great pricing and service as the rep wants to make a good impression. Its worth the 4 page credit app even if you want COD. In the mean time your old vendor will jump through hoops to get the biz back. It will take about 2-3 months for Roma to start inching your pricing upward. Thats fine give him some rope then call the old vendor in and let him price out. Unfortunately this is the business. My advise is to play them. I sold 3 million a year and the customers I made money on were the ones that were my “friends” and…contract customers! Unless you have massive volume, purchasing multiple locations or more than 2 mil a year never sign a prime vendor contract! They want this as it locks you in to doing biz and not shopping. If you can find a DSR, MA, TA,MR etc to be honest 100% of them will tell you that the guy who who is the PIA with spread sheets gets the best pricing and because they are tough they get better service, the invisible hand at work. Unless it was a whale, if I had a contract customer that was stocked out on something I would replace with a sub or try to convince them to wait for the next truck. If it was a “street” customer I would drive 100 miles to buy the item from a competitor and not charge the end customer as an apology, not to loose the biz to the other guy!
In their defense Roma knows the biz and will be competitive but the PFG management is driven by margin whereas the Roma management was driven by volume making up low margins. PFG will win out after a few months a force the Roma rep to raise margins. thats when you move,they will come back down or give you a new rep. Also dont be afraid to get “The new guy”, what they lack in experience they make up for desire to get off the management radar. They are often on salary so they will keep margins low as it doesn’t cost them anything, if you have problems call the DSM.
Note: When i talk about contracts Im talking prime vendor. Cheese or manufaturer contracts for individual items will work to your advantage and should go house(distributor) to house.
I’m not really going to RD more than once every 4-6 weeks anymore now that I have Roma. Filling up my car with paper goods and a few items that I save $10-$20 a case more than makes the trip worth it when I’m saving over $300 on things I don’t consume a lot of.
I’d certainly not want to burn my bridges but I’d want the new car in my driveway not his!
Show him the costs explain your position and see what he can. If he can match them or better them then you’ve saved straight away if not move the items he is more expensive on. But as suggested above review regularly. Healthy competition is a good thing in my book and I love telling people that they’re up against someone else - you soon find out if they really want the business. Everytime I buy a bulk load of something I shop around. The times I don’t I always fall over a much better deal a few days after the goods have arrived.
- Don’t ask, don’t get.
Your vendor does have room to move on price. So do the broker and the supplier. They will move price to keep business based on volume and payment history. (If you do not pay your bills on time forget about discounts)
Don’t ask for a flat discount on everything, go after pricing on your top 5,6,7,8 cost items. A couple of bucks a case on meats and tomato products and an extra 10 cents on cheese make a huge difference. Who cares what you pay for sundried tomatoes? Nobody uses enough of them for it to show up on your results (obviously an exaggeration… but)
Your rep needs to work to get you those things. They need to hit up the broker for the price diversion on the meats.
Tell your rep that you want to see lower cost options. Are you using #2 tomatoes and mushrooms on your pies? No reason to use the pretty ones when you slice them up and cook them! When there is a great deal on slice black olives or art hearts or pineapple, buy 10 cases!
- Don’t ask, don’t get.
I will move my source for a product for 1%. A red onion is a red onion. Some weeks the difference on a case of romas or a 50lb bag of onion from one vendor to another is $5. You can bet I move the business! What is your net at the end of the year? Every dollar saved on costs is a bottom line dollar! If you make 15% on sales as a profit and your food/paper/supplies cost is 30% of sales, saving 10% on food cost is a TWENTY (20%) percent increase in profit. If your food rep is a great guy, go have a beer with him… but make him earn the business! (If you are earning less than 15% on sales, the impact is even greater!
- Don’t ask, don’t get.
Great points made by everyone. Thank you.
Learning that it IS MY MONEY and they shouldn’t be allowed to put in any less effort that I do to earn MY customers is something that is now firmly in place in my mind. Especially when you consider I approached both vendors without them ever having to cold call me. It’s easy money for them, I should be able to expect them to to work harder now, since they didn’t have to put in the ground work at the beginning.
Both vendors have been put on notice, it’ll be interesting to see how they respond. I packed up the little ones and went to Restaurant Depot today and saved a few hundred bucks, I’d rather be at home playing outside with them, but it’s still time spent together…for now.