InsideFood Message Board
Sign up Calendar
 
 
 


Reply
  Author   Comment  
agoodcustomer

Newbie
Registered:
Posts: 8
Reply with quote  #1 

Hi Guys.

I currently am on a program with US Foods where we get some upfront money and a rebate based on volume. There is no set margin schedule or audit rights. Sysco offered that to me, but I've not yet had great success with Sysco. When we do a market basket, they are consistently higher.

We are now on five stores and moving into new states. We will then be dealing with different units within US Foods (or Sysco, or whoever.)

What is the best way / process to get National Account pricing?

I know Coke has a National team that one can often get better pricing than through your local bottler. I would love to figure out how to do this.

Thanks! 

0
DENFOODIE

Member
Registered:
Posts: 21
Reply with quote  #2 
I just sent you a private message.
0
bestdsr

Member
Registered:
Posts: 34
Reply with quote  #3 
Hopefully you have a good relationship with your sales person.
If so they can assist you in your endeavors.
If you do not have a relationship......you are either going to pay for someone to do this for you or go to a GPO.....( they are all going to take their slice too)
0
laser

Senior Member
Registered:
Posts: 141
Reply with quote  #4 
A couple of suggestions. Get written proposals from at least two companies. These should have delivered cost defined in them. Have audit privileges at least twice a year, with the number of items reviewed each time written into the agreement. Be sure that you can negotiate directly with manufacturers and have them give you their true FOB or delivered cost to your supplier, minus program monies. Work up a list of items to have market baskets quoted from each proposal. There will be many other points in the proposals that other folks will suggest here.
__________________
laser
0
Retiredfoodpro

Member
Registered:
Posts: 68
Reply with quote  #5 
As a former operator I would never agree to "upfront monies" and a rebate program or a "performance reward".  The only way to manage it straight up is to get a "net net" program with category margins over actual cost.  Assuming your drop sizes are healthy you have all the leverage assuming you pay on time.  

The upfront monies and rebate monies are all built into your margins to ensure the distributor is paying themselves back the money they give you. That is most likely why your market basket is behaving the way it is (you're funding the monies from the prices you pay). 

Your top 20 items are the items you spend the most money on so get those on vendor programs/manufacture rebates that do not funnel through the distributor. 

Just my 2 cents.
0
wilsontennis

Senior Member
Registered:
Posts: 124
Reply with quote  #6 
Here's the thing - your description is detailed enough.

1) you have five locations?  How many DCs do you currently have?  
2) what are the real, and real timing, plans of your growth/expansion?
3) do you currently have "high volume" items?  Combined value of two full trucks per month?  + or - 80k lbs.
4) does the menu have a signature aspect?  Special protein/salad/flavors/provided soups?  Many manufacturers have regional chain development people who may want to participate.

5) Coke - how big is your total geography?  An RSM or chain person can speak on behalf of the bottlers, I believe.

__________________
Statistics are like mini skirts; they give you a good idea but hide a lot of important stuff
0
agoodcustomer

Newbie
Registered:
Posts: 8
Reply with quote  #7 

We are building something similar to Einstein Bagels.

 

Quote:
Originally Posted by wilsontennis
How many DCs do you currently have?

I'm not sure what DC means.

Quote:
Originally Posted by wilsontennis
 What are the real, and real timing, plans of your growth/expansion?


We have opened or acquired five locations in four years.

We've started slow, still figuring out what we're doing. Landing on bagel/cafe concept. I say we've opened / acquired five stores, but I should mention, we are going to close two of those locations as they are either underperforming (bad location) or are too different than the model we are moving forward.

So let's call it three locations in two states.

Two ten minutes apart. The other is 6 hours.

Quote:
Originally Posted by wilsontennis
Do you currently have "high volume" items?  Combined value of two full trucks per month?  + or - 80k lbs.

I don't think our locations are that big. Our menu is pretty small compared to some, we buy 2000 bags of 50# flour to each commissary (which is located at one of the shops in each state.)

Quote:
Originally Posted by wilsontennis
Does the menu have a signature aspect?  Special protein/salad/flavors/provided soups?  Many manufacturers have regional chain development people who may want to participate.


No, I don't think so. What does this mean, I don't fully understand.

Quote:
Coke - how big is your total geography?  An RSM or chain person can speak on behalf of the bottlers, I believe.

Between the two states, drops will come out of two different bottlers. Again, two of the shops are ten minutes apart.

Thanks for your help!!!

0
wilsontennis

Senior Member
Registered:
Posts: 124
Reply with quote  #8 
First - I meant to ISN'T - thanks for still answering.

The rest - so you are three, not five.  You have not mentioned the specifics of growth.  

DC = Distribution Center

Coke bottlers - can't help.

Stick with the others who have offered support.  Don't take upfront money.  Why are you in the bagel/café segment?  

__________________
Statistics are like mini skirts; they give you a good idea but hide a lot of important stuff
0
FSVET

Avatar / Picture

FS God....FIRST InsideFood Poster
Registered:
Posts: 815
Reply with quote  #9 
Einstein's and Noah's haven't exactly set the world on fire. Why do you think your concept will be different?

Flour is your main item. This a low-end item for most distributors. Not a lot of vendor money either. I'm not sure how much warehouse space US Foods or any other distributor is willing to allocate for this. How often do you buy 2,000 bags of flour for your commissary? Once a month? Twice a month?

Personally, I don't think you have the horsepower to negotiate any kind of deal with only five locations and a limited menu. I think you should talk to your USF rep about a net pricing deal, and work with manufacturers directly on volume rebates.

__________________
The problem with your gene pool, is that there is no lifeguard.
0
CheeseFlourSauce

Newbie
Registered:
Posts: 4
Reply with quote  #10 
Don't mean to be too blunt, but with 3 locations, you probably shouldn't be buying flour from USF or sysco. A bake supply house will consistently beat their prices on wheat all day long - and you're not doing the kind of volume that you can really beat up Sysco or USF to compete with them - even if they could. Bakery or pizza distributors usually move an order of magnitude more flour than the local broadline DCs do in my experience.

No one wants to sell flour to a bakery account - it's penny margins. A DC generally sells you the flour so they can supply the paper, chemicals, spices, etc. But with an account your size, they're probably pushing a higher margin because they can. Shop around find some independents in your local areas. You'll probably see much better prices  - and I think you're getting way ahead of yourself here trying to set up distribution to every zip code in the contiguous US, when you only have 3 active locations thus far.
0
Mustard

Newbie
Registered:
Posts: 2
Reply with quote  #11 
If you're on a street program, don't go shopping around until your deal is expired.  You could be required to pay back a portion of the upfront money if your sales drop or you quit buying from USFoods.  Also you may run into problems, when you close your 2 stores if those were built into the agreement.
0
northernms

Senior Member I
Registered:
Posts: 222
Reply with quote  #12 
No matter what they offer you they will always make THEIR margin

Find a independent distributor that can handle your specific multi unit items. They don’t have shareholders or inflated CEO salaries to cover.

What region of the US are you in?
0
northernms

Senior Member I
Registered:
Posts: 222
Reply with quote  #13 
Quote:
Originally Posted by CheeseFlourSauce
Don't mean to be too blunt, but with 3 locations, you probably shouldn't be buying flour from USF or sysco. A bake supply house will consistently beat their prices on wheat all day long - and you're not doing the kind of volume that you can really beat up Sysco or USF to compete with them - even if they could. Bakery or pizza distributors usually move an order of magnitude more flour than the local broadline DCs do in my experience.

No one wants to sell flour to a bakery account - it's penny margins. A DC generally sells you the flour so they can supply the paper, chemicals, spices, etc. But with an account your size, they're probably pushing a higher margin because they can. Shop around find some independents in your local areas. You'll probably see much better prices  - and I think you're getting way ahead of yourself here trying to set up distribution to every zip code in the contiguous US, when you only have 3 active locations thus far.



Flour is also a betch to deliver for drivers! Hahaha
0
Investigator

Avatar / Picture

Prophet/Sage
Registered:
Posts: 1,308
Reply with quote  #14 
Quote:
Originally Posted by wilsontennis
First - I meant to ISN'T - thanks for still answering.

The rest - so you are three, not five.  You have not mentioned the specifics of growth.  

DC = Distribution Center

Coke bottlers - can't help.

Stick with the others who have offered support.  Don't take upfront money.  Why are you in the bagel/café segment?  


You forgot to ask if the business was "vertically integrated". My God but you're a time waster, asking meaningless questions and providing zero or negative value in return.
0
commoditiesguy

Senior Member
Registered:
Posts: 195
Reply with quote  #15 
You might consider working with a bakery distributor; and buying your non-foods from a Bunzl or something like that, and then getting your beverage service through a 3rd party.

Most broadliners don't know squat about bakeries.
0
Previous Topic | Next Topic
Print
Reply

Easily create a Forum Website with Website Toolbox.