2011 May: Valued Partner

Imagine this: never asking your sales representative the cost of cheese or the price of any other ingredient ever again. You quit the weekly dance we call placing the order. In fact, you personally delegate that task to an employee. You stop writing a check for deliveries. And finally your food cost drops 3 to 5 percent and your checkbook is always in the black. Your relationship with your rep is a deep and trusting friendship and you cover each other’s backs.

This model is absolutely attainable. In my 30-year career of owning Big Dave’s Pizza & Subs, I evolved from being a purchasing bully to a profit partner with my food distributors. When I was young and full of myself, I pitted all my salespeople against each other. It was a weekly way that got my macho on and flexed my purchasing muscles for the sake of power and ego. I had the power and I wasn’t afraid to make you sweat for the order or wait until the last minute before I paid you. What a major waste of time and energy.

Food service distributors have myriad responsibilities that range from furnishing, automating and equipping a huge big box building to providing a fleet of refrigerated delivery trucks and company vehicles for sales reps to maintaining, insuring and replacing all hard assets. All the while, they provide service and appropriate price levels to keep your business.

Contrary to outward appearances and perceptions, the majority of food service distributors run on very thin margins. They all have one thing in common: they seek to do business and build long-term relationships with top-shelf restaurants.

The fastest way I know to reduce your food cost and get the best pricing is to allow a distributor to make more profit or margin on your account. If you do your part, your overall invoiced pricing will go down. The more food, the bigger the drops, the higher the margin for your supplier. If you are a cherry picker, like I was for 10 years, you will constantly have a distrustful relationship with your distributor. You will be forced to have your guard up at all times.

There are new rules of the road for buying food from a distributor. In fact, there are rules for them and rules for you. Buyers and sellers have a very co-dependant relationship. One is just as important as the other, even though you may have been taught otherwise.

Rule No. 1 — Choose your supplier carefully. What do other restaurateurs have to say about them? Do you share common goals? Do you like and totally trust your route rep? This is a biggie. If the chemistry isn’t there, the relationship starts off on the wrong foot.

Rule No. 2 — Don’t ever lie. A good rep worth his laptop has heard
every lame fabrication in the book. Don’t think you can snowball them. This may be the hardest thing to change. Two-way truths are a wonderful thing. This concept may mean you let go of the “I’m the customer, you’re my servant” mindset.

Rule No. 3 — Respect their time. Be organized and never make them wait for an order or check. Time is money. From time to time schedules get messed up and there is a valid explanation. Don’t make it the rule. The last
10 years I owned Big Dave’s I didn’t write a check to my supplier or call an order in. I trained an employee to inventory and place all of the orders. He was in high school and made extra pay for owning inventory responsibilities. Since I was rarely around when my rep came in looking for a check, I had his signature added to my checking account. He wrote his own check every week. I didn’t make them chase the money.

Rule No. 4 — Treat your delivery drivers with deep respect. They will treat you very special, rotate your stock and be considerate of your time. Buy them lunch (or at least a beverage). If they are great, let the company know. If they are weak, let the company know that, too.

Rule No. 5 — Enter into a written Prime Vendor Agreement. Every major restaurant chain has one thing in common: they buy all of their food from one distributor. That gives you one point of contact and cost-plus pricing. You write one check. In return, you retain the right of audit to confirm price-plus pricing is being honored. You will get better service if you are loyal.

Rule No. 6 — Get the ground rules right out in the open from the start. No one likes to be surprised with new rules or terms. Right from the get-go talk about terms, delivery days, food specifications, customized boxes and minimum order levels. The sales rep is not your gopher. If his company has an out of stock item, they own fixing the problem. If you forget to order it or blow out of an ingredient, don’t force him or her to run to the warehouse for a take-along. If you created the problem, you fix it.

My parting shot this month is this: through thick and thin, for better and worse, relationships built on trust
endure the test of time. If you want to get the most from a supplier, be their favorite customer. It’s just human
nature and the right thing to do.

Big Dave Ostrander owned a highly successful independent pizzeria before becoming a consultant, speaker and internationally sought-after trainer. He is a monthly contributor to Pizza Today.