New Fees for Sysco Suppliers

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Owsley_Bear

Member
Registered:1590699271
Posts: 33

Posted 1613071909	Reply with quote #1

Sysco just announced a series of new fees for the supplier community. Would assume these are standard in the "Drug" channel. Service Level fees Supplier Billback fees - they want a % of whatever deal a supplier is giving to an operator. Fee for setting up Operator Deals I've been around long enough to remember it was Sysco that wanted to do billbacks for operators. Now they want a cut for doing so.
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DistributionDiva

Senior Member
Registered:1268139838
Posts: 109

Posted 1613140223 · Edited	Reply with quote #2

I don’t believe they are standard in the Drug channel as much as Sysco, and really all distributors, has created an environment that makes it too difficult for manufacturers to understand their business. National brokers have access to sales data. The anointed Category Leader gets data in return for supplying headcount to manage the data (or did a few years ago). Innovative brands and small / regional brokers aren’t given access and therefore must open the OpCo by selling to a large local or national account. That requires pricing deviations. Because Sysco didn’t help open the account, they don’t get access to funds. The best way to know where your product goes is to create a deviated bill back. Sysco has visibility. They want their cut whether they deserve it or not. The irony is that if that actually bothered to work with the smaller guys and packaged data and insights for them, there would be fewer deviated bill backs. Sysco and US and most of the foodservice distribution space is ripe for disruption. And it is coming fast.
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Investigator

Prophet/Sage
Registered:1218261323
Posts: 1,572

Posted 1613202984	Reply with quote #3

Quote: Originally Posted by Owsley_Bear Sysco just announced a series of new fees for the supplier community. Would assume these are standard in the "Drug" channel. Service Level fees Supplier Billback fees - they want a % of whatever deal a supplier is giving to an operator. Fee for setting up Operator Deals I've been around long enough to remember it was Sysco that wanted to do billbacks for operators. Now they want a cut for doing so. There is a cost to running reports and if you give an operator a billback then you need the distributor to provide you accurate sales data. Now the way to get more of your sales without using rebates is to remove the inflated portion of your pricing to distributors and the product price would be less costly. Now the real issue is all the debt piled on all the debt piled on more debt. I believe even national broker Acosta defaulted on $3 billion they owed. In 1995 do you think all the brokers in all the 48 states had $3 billion in debt-- not likely-- in the early 1980's do you think there was a distributor like USF carrying $5 billion in debt, and PFG carrying close to half a billion. I mean just keep adding it all up and it's frightening. So the manufacturer reps have become white collar "bag men" running around with cash to try and pay off all these overhead claims. These claims are usually settled by the manufacture and distributor colluding to inflate prices to the end user and by default their customers. So the cost of 35 years of consolidation is staggering to US consumers and tax payers. I could cut the cost in half for the operator just by getting rid of all these worthless overhead financial claims now gripping the business. And these college educated suburban ass holes that proliferate the industry have taken to crime like a fish to water. And all of it is a crime.
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whodunit

Newbie
Registered:1615691493
Posts: 2

Posted 1615691904	Reply with quote #4

@DistributionDiva - re: "Sysco and US and most of the foodservice distribution space is ripe for disruption. And it is coming fast." Like how? We've been saying that for years.
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