05292017

9 Things You Didn’t Know You Could Negotiate With Your Restaurant Supply Store

You can navigate food industry standards to find discounts from your supplier you didn’t know existed.

As a restaurateur, you’re looking to increase your profit margin in any possible way. When you secured the lease for your building, you didn’t accept the first offer – nor should you when you choose your food and supply vendors. Once you have a list of vendors and what you need from each, see where there are overlaps and competition. Do your research so you know the prices of the items you need. Then you can start negotiations.

Market Basket Data

Finding the right food source for your restaurant starts with the manufacturer prices for the items you need to buy. You can do the legwork yourself by contacting manufacturers directly to find out how much distributors, or suppliers, are paying for the product. You can also ask a supplier for a market basket report, which details the cost to the distributor so you know what kind of markup it’s applying to the products. Do this with each supplier you may want to do business with so you can see which one negotiates the best price from the beginning.

Bundle to Save

One of the best ways to save money on food costs is to source as much as you can from a single supplier. If you’re buying most of your food from one company, you may qualify for a discount.

Find the Competition

You could diversify your suppliers to get a better price on produce or protein, but you may end up paying more in administrative and delivery costs. However, if a supplier knows you’re shopping around for another supplier, it’s more likely to go out of its way to entice you to work with it exclusively with a discount.

Long-Term Contracts

Suppliers want to do business with you, and the longer the relationship lasts, the better it is for them. If you’re willing to enter a long-term contract with the distributor, you’re more likely to net discounts or bonuses from it. When you start shopping for a supplier, let the companies know that you’re willing to commit if the price is right.

Get a Fixed Price

All food distributors are in the business to make money, so markup is inevitable. You’re paying for the food, convenience of deliveries and reliability. Many suppliers offer a cost-plus-fixed-rate plan, which means you pay the cost of the product, plus a fixed fee that doesn’t fluctuate. Just be sure you get it in writing.

Smaller restaurants may not have the luxury of choosing a cost-plus-fixed-rate plan and must settle for a cost-plus-percentage program. This means you pay the cost of the product, plus a percentage of that cost, which can increase as costs do.

Buy in Bulk

If you have plenty of storage space and you buy foods with long shelf lives, you can buy in larger quantities and get fewer shipments. This cuts down on the supplier’s costs and yours. You may be able to negotiate more of a discount than what you’d save by just getting fewer deliveries.

It Can’t Hurt to Ask

Aside from clever negotiations, you could just ask nicely. Suppliers want to develop a long relationship with you because you’re helping them stay in business and garner more business from the area. Often, asking your account executive is enough to possibly get a slightly lower price.

Pay Early and Frequently

Many suppliers offer clients a discount if they pay more often than is typical. This offers the distributor peace of mind that it’s going to get paid. Also, if you pay early, this creates a buffer for the supplier, which anyone in business appreciates.

Image from Giovanni Cardillo/Shutterstock

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