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Prophet/Sage
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Reply with quote  #17 
Quote:
Originally Posted by ISellLettuce
And as usual, you misconstrue and interpret things in the most idiotic ways. 

Nowhere did I say that EI is the child of margin pressure. First of all, that doesn't even make any sense. I'll get to that later. I assume you know what EI actually is comprised of, but maybe you don't, which explains your post above. Very simply stated, EI is is money that manufacturers pay distributors as a cost of getting in the door, positioning their products to be promoted by reps, incentives for growing lines, marketing monies used for promotions, shows, etc. It's a pay for play type thing. There's both EI on the national (corporate) level, as well as on the local level. That's not to say that it's a clean and transparent practice either...it's quite the opposite and certainly has a shady underbelly quality to it. There's no denying that. Like I said, it's a pay to play practice that distributors try and throw right to the bottom line. In one aspect, you can equate this directly to retail and grocery stores, because they use the same practice, and as part of that, they use "slotting allowances", which is the price manufacturers pay to get on the shelves. Do you somehow think that the slotting allowance is being deducted from the cost of goods and passed along in its entirety to the consumer? Of course not. 

Second, the point I was making above regarding margin pressure is simply this. As selling margins become more under pressure or declining (again, on the sales side), that takes more $$$ of out distributor profits. Protecting EI is an important element to distributor profitability. It would be LESS important, is selling margin was 25%+ like it used to be 20 years ago. But in reality, that margin has been cut in half or more. I made the connection in my previous post because GPOs tend to have a negative impact on a distributors EI and therefore historically have not been embraced. 

Lastly, you are either willfully ignorant or worse, at evaluating distributor profitability. I know that you can't be part of any senior level staff at a distributor, otherwise you'd simply know better, but you can however read any earnings report from the Big 3. Food distribution is not a high margin business. I don't know what else to say about that because it's just about the most obvious fact out there. That's not to say they don't make money, they certainly do, but you're talking about single digit EBITDA. Guess what largely contributes to that EBITDA number??? You guessed it...EI. Or perhaps you don't realize that million and billion dollars companies also have tons of expense involved with conducting this business. 


So at the end of the day, you can continue to rail against the practice of EI and how its causing the end of humanity as we know it. The rest of us who are actually successful in this industry and run companies can handle the stuff that you obviously have no grasp on. That way, you can work hard at uncovering the next conspiracy theory.   





Here is what you wrote. Now tell me I'm wrong?
"---They've historically been a dirty word in distribution because most, or all, of them affect EI in a negative way. Some more than others. Distributors rely heavily on EI in order to be profitable. That is even truer now than it was 5 years ago as margin pressures are everywhere.

So  please genius of the business world tell me again that you're not apologizing for falsely inflating the cost of goods because there is all this mysterious "margin pressure" that didn't exist 5, 10 , 20 years ago? 

And as I wrote before who cares what your ebitda number is if you can skim billions of dollars out of the business?  KKR recently within the past two years yanked $673 million out of the USF business. Do you think they care about EBITDA ? 

You guys are clowns and dumb clowns at that. 

The mark up with EI is much higher than it's ever been before all this consolidation. The difference is when a $60.00 case is inflated to $75.00 per case, then that fictitious $15.00 per case upcharge cannot be touched or negotiated away, leaving the Wall Street parasites to rip off the US economy. So your argument (and there is no way around it) is "embed our prices with false costs that we never really incurred by us, and pass them on to a 3rd party so that are ROI, margins, whatever you want to call it looks better. I mean Jesus but you people are daft.  I'd love to see that argument used as a defense in a court of law. 

And by the way somewhere on this site I copied a 2003-2004 business article by a Star and Tribune writer who quantified the amount of "promo" (I have to laugh) monies in the retail supermarket trade and it was in excess of $100 billion. They would have their readers believe that manufacturers are really promoting , reducing prices, etc. by $100 billion per year. In reality that $100 billion is added cost to the US consumers. 




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Prophet/Sage
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Reply with quote  #18 
Quote:
Originally Posted by Retired President
Well said IsellLettuce. You are correct and in fact many times the operating companies EI percentage is higher than the EBITDA percentage so without it, they are in the red.



Retired President-- who cares, that isn't the real issue or point of contention is it? You're like the guy that says "I rob banks in order to maintain my lifestyle, which otherwise wouldn't be very good".

Jesus but you guys are daft. I can hear that tiny pea banging off the inside of your cranium.
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Retired President

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Reply with quote  #19 
First of all, I'm not going to argue with you because its pretty obvious to people on here that you know nothing about foodservice. I have been at the highest level in foodservice for over 35 years and can assure you that you are wrong about 98% of the time with your posts. You seem to think cost of goods is something that companies are responsible to share with you, I assure you that they are not,  so holding up in a court of law is not an issue. The only way it becomes an issue is if you define it  in a contract and then violate the contract. You seem to think that every restaurant is entitled to know cost. Wrong! They have the price and the option to buy it or not period. Its just like any other business. Nothing illegal about it. You need to come up for air, not everything is a conspiracy. Everyone is entitled to be stupid now and then, but some people abuse the priviledge.
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SCURVYCHEF

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Reply with quote  #20 
Quote:
Originally Posted by Retired President
Everyone is entitled to be stupid now and then, but some people abuse the priviledge.


I am soooo going to use this line all the time now!
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Reply with quote  #21 
Quote:
Originally Posted by Retired President
First of all, I'm not going to argue with you because its pretty obvious to people on here that you know nothing about foodservice. I have been at the highest level in foodservice for over 35 years and can assure you that you are wrong about 98% of the time with your posts. You seem to think cost of goods is something that companies are responsible to share with you, I assure you that they are not,  so holding up in a court of law is not an issue. The only way it becomes an issue is if you define it  in a contract and then violate the contract. You seem to think that every restaurant is entitled to know cost. Wrong! They have the price and the option to buy it or not period. Its just like any other business. Nothing illegal about it. You need to come up for air, not everything is a conspiracy. Everyone is entitled to be stupid now and then, but some people abuse the priviledge.


First of all  you are arguing, so your very first sentence is a lie. Secondly if you can find a single time where I have said anything about sharing cost with end users then I'll add $1,000.00 towards your retirement income if you'll agree to pay me the same if you cant deliver the proof. 

You cannot pass down costs you didn't incur and that's exactly what this accounting trick is and it's worth billions of added cost to the industry each and every year. The state of NY sued Sysco on this very premise. And the reason it's continued is not because it isn't illegal but due to political reasons, where Wall Street runs the country. Topple Wall Street and you can kiss your arse and all that stealing being engaged in for 35 years goodbye. 

And in this case g it is a conspiracy. This theft on a massive scale couldn't take place were it not for "suppliers" falsifying invoices, accruing the spreads between actual cost and inflated cost and returning that portion back to the distribution companies.

I do agree with you that end users can "take it or leave it"  if, and it's a big if, the markup were the only cost component used to set pricing. But it would be pretty embarrassing and telling if you went to market with a 60% markup. It would show the end users the real cost of consolidation. 





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dawg1981

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Reply with quote  #22 
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tjseadoo

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Reply with quote  #23 
Quote:
Originally Posted by dawg1981
In my experience GPO's like Aramark/Sodexo they "force" in the "spec'd" product where companies like
Entegra "tailhook" on Sodexo programs. Also Premier specs several companies for each category which really does not help promote your product very well if you are not in stock at US Foods, if US Foods does  not have either of the spec'd products they will just sub their brand if it does not reach the minimum levels.

When did a price list stop being a price list?...everybody's hand is always sticking out for a discount!


Dawg



You don't really understand GPOs.  Contractors like Aramark and Sodexo do spec products, but True GPOs do not.  The customer is able to pick their products based on their menus and food costs.  Premier/Vizient, which are actually driven through USF  do spend more time driving product(especially USF private label).  Others like Navigator/Intalere/HPSI etc. allow the customer to dictate what products they want to utilize and even give them the choice of which distributor they want to use.  Any subbing,  comes from the distributor, not the GPO.  Both Sysco and USF are well known in the industry for auto subbing.  Distributors talk about the 1.5% that GPOs get as cutting into EI, but the distributors actually have back end money that comes from the Mfrs that is untouchable.  that 4-8% is sometimes used to secure larger pieces of biz, but rarely.  When you are talking about EI, Distributors make the lions share.

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texaspeddler

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Reply with quote  #24 
Thank you Prez...
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ISellLettuce

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Reply with quote  #25 
Quote:
Originally Posted by Investigator



Here is what you wrote. Now tell me I'm wrong?

"---They've historically been a dirty word in distribution because most, or all, of them affect EI in a negative way. Some more than others. Distributors rely heavily on EI in order to be profitable. That is even truer now than it was 5 years ago as margin pressures are everywhere.

So  please genius of the business world tell me again that you're not apologizing for falsely inflating the cost of goods because there is all this mysterious "margin pressure" that didn't exist 5, 10 , 20 years ago? 

And as I wrote before who cares what your ebitda number is if you can skim billions of dollars out of the business? 




Yeah moron, you're wrong. As usual might I add.

1) What I wrote, and you highlighted, is 100% correct. Ask any sale guys on here if their (sell-side) margin is higher now, or if it was higher 10 or 20 years ago. I'll wait...

2) You still have no idea what Earned Income actually is, or how it effectively works within a distribution house. But I'm also done trying to explain it to you as your comprehension skills are that of a coconut.

3) Who cares about EBITDA? Well, let me see....here....that would be just about anybody who cares about the financial well-bring of a company. Employees and shareholders alike. After all, it is the standard of how we judge profitability of a company. 

And once again, just to prove that you have not even the slightest clue on what the hell you are rambling about.... You said,  "And as I wrote before who cares what your ebitda number is if you can skim billions of dollars out of the business?". The very "skimming" that you are misrepresenting, or as intelligent people in this industry know it as, earned income, directly contributes to EBITDA. They very much go hand in hand when it comes to earnings.

Like Prez said, it's truly amazing on how you can be wrong virtually every single time you sit down at your keyboard and hunt and peck something out. It's this amazing mixture of ignorance and stupidity with a dash of comedic gold for rest of us reading your nonsense. Anyways, like I said...I'm done debating this with someone who lacks the ability to grasp it.
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Prophet/Sage
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Reply with quote  #26 
Quote:
Originally Posted by ISellLettuce


Yeah moron, you're wrong. As usual might I add.

1) What I wrote, and you highlighted, is 100% correct. Ask any sale guys on here if their (sell-side) margin is higher now, or if it was higher 10 or 20 years ago. I'll wait...

2) You still have no idea what Earned Income actually is, or how it effectively works within a distribution house. But I'm also done trying to explain it to you as your comprehension skills are that of a coconut.

3) Who cares about EBITDA? Well, let me see....here....that would be just about anybody who cares about the financial well-bring of a company. Employees and shareholders alike. After all, it is the standard of how we judge profitability of a company. 

And once again, just to prove that you have not even the slightest clue on what the hell you are rambling about.... You said,  "And as I wrote before who cares what your ebitda number is if you can skim billions of dollars out of the business?". The very "skimming" that you are misrepresenting, or as intelligent people in this industry know it as, earned income, directly contributes to EBITDA. They very much go hand in hand when it comes to earnings.

Like Prez said, it's truly amazing on how you can be wrong virtually every single time you sit down at your keyboard and hunt and peck something out. It's this amazing mixture of ignorance and stupidity with a dash of comedic gold for rest of us reading your nonsense. Anyways, like I said...I'm done debating this with someone who lacks the ability to grasp it.


Here is a prime example of how goofy you are. You call me a moron and say I am wrong and then confirm I was correct. 
QUOTE:
Yeah moron, you're wrong. As usual might I add.

1) What I wrote, and you highlighted, is 100% correct. Ask any sale guys on here if their (sell-side) margin is higher now, or if it was higher 10 or 20 years ago. I'll wait...

Now back to my comments
and EI/ debt from acquisition is greatest pressure on sales margins and the basis of my first comment. How can you jack an extra 20% in cost (fake cost) and expect margins not to come under pressure? 

You still pretend you need to school me about EI but it's you that need the wake up call.

And of course you're done debating, that's what all you morons say. Hell it took you days to muster up the latest garbage posting so imagine how exposed you'd get in a back and forth.




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ISellLettuce

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Reply with quote  #27 
Image result for hahaha gif


Quote:
Originally Posted by Investigator


Here is a prime example of how goofy you are. You call me a moron and say I am wrong and then confirm I was correct. 
QUOTE:
Yeah moron, you're wrong. As usual might I add.

1) What I wrote, and you highlighted, is 100% correct. Ask any sale guys on here if their (sell-side) margin is higher now, or if it was higher 10 or 20 years ago. I'll wait...

Now back to my comments
and EI/ debt from acquisition is greatest pressure on sales margins and the basis of my first comment. How can you jack an extra 20% in cost (fake cost) and expect margins not to come under pressure? 

You still pretend you need to school me about EI but it's you that need the wake up call.

And of course you're done debating, that's what all you morons say. Hell it took you days to muster up the latest garbage posting so imagine how exposed you'd get in a back and forth.




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Reply with quote  #28 
It's appropriate that you chose an actor famous for portraying organized crime figures.
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