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COPGuy

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Reply with quote  #1 
After far too many years to count of calling on distributors all across the country and selling COP items, I have to admit that it just never ceases to amaze me how the buyers act. 
  The products I have sold over the years has never been the cheapest, and I have done well in this arena of selling quality over price.  I get the need to be competitive on price, and the competition the sales managers are under on the street..Believe me, I get it!!
  I do not fault a restaurant buying what is cheapest, if it makes sense for his establishment..

But here is where I get really frustrated..

Buyer agrees to a meeting because they are buying the same "protein" as the other two major distributors in the area, therefore it is just a race to the bottom for the reps on the street.
The buyer wants: 1. quality, 2. differentiation, 3. marketing program 4. slotting fee 5. foodshow booth 6. quarterly promotion  All so his reps can be competitive... huh??

1.Quality (usually branded) will be 10% higher on average
2.Differentiation-( halal, non gmo, pasture raised) that's another 3-5%
3. Marketing program- 7-10 cents per lb
4.$500.00 per item about a .01 cents per lb
5.Foodshow- $5000.00  about .03 cents per lb
6. Quarterly promotion times 4 on top of rebate for foodshows .10 cents per lb

 .24 cents per lb in what the buyer wants not including a better product with differentiation.. I haven't even figured in the .05-.10 cents they put on the cost before falsely inflating the cost in the computer for the street reps... and you know what..they say no thanks, its too much.... we wont be competitive...

Actually, if you gave the reps the better product, with differentiation, they would sell more at a slightly higher bump then what they are selling now... you would make you money on the sell and not the buy!  You would have a reason for the customer to buy from you.. you would add value to the customer, you would even be able to offer the customer an item they can charge more for and make more money as well!!

It kills me to be on a call with a rep knowing the cost of my item is say $8.00plb.. and here the rep say, well my cost on this is $9.00.... 
  Customer almost always says they want the product and it would work for them and then the rep ends up writing it at almost nothing to make the sale..... 
  Then what does the buyer say to me??  The reps aren't selling your product at 10-15% like you said...

Actually Mr. Buyer..they are...  My cost is $8.00, the rep sold it for $9.45..  You think they wrote it at 5%.. but the reality is, they wrote it at 18%.... unfortunately you stripped it all away from the rep by being greedy...

Oh and don't forget, I am not allowed to mention to reps about the false cost, marketing, slotting, foodshow, promo, slaesmeetings and all the other stuff built in...

If there is truly nothing wrong with charging me for ALL this stuff, why hide it from the reps?

Just a rant.. thanks for listening

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SonofAbeach

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Reply with quote  #2 
If the Rep's don't know by now what is going on internally, then they are still Rookie's. I don't even work with Rep's anymore, I call the Restaurant owners/chef's myself and tell them the different ways the Distributors can get my product to them, and let them decide who to order it through. If it is a Key Account, Multi Unit, etc. then they are on a cost plus program and I will quote them my landed price to the distributor all day long. Those are the customers I want anyway. The mom and pops are probably ordering from 2-3 different distributors so I let the Broker network focus on those.
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commoditiesguy

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Reply with quote  #3 
Not enough food people in the food distribution business anymore.
That's the problem.
I can't speak to where they are getting the trash they call today's sales rep, but I can tell you that "buyers" are coming from college with supply chain degrees.  So most can't tell the difference between WOGs and HOGs.

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northernms

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Reply with quote  #4 

AMEN!!!

 

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Investigator

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Reply with quote  #5 
After reading the message from Center of the Plate Guy I wonder why I get the resistance to my statements that sheltered income is the "lone reason" you have Wall Street parasites all over the food distribution business. COPGuy even used the phrase "falsely inflating the cost"

And why do they prefer profits from the buy versus profit from selling?

1. It's a non negotiable fixed upcharge, a hidden tax against their customers. 
2. It steals commissions from the sales rep (lowers their sales cost)
3. It covers up the true cost of distributor consolidation (26% + cost isn't a true markup. It's likely twice that markup)
4. Hidden income stream that can be utilized to buyout more distribution channels and further increase the game of "toll roads". 
5. It helps to consolidate the supplier base as well. More business in fewer hands. 
6........
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Salamiking

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Reply with quote  #6 
I really feel for you COP guy. The pad my company puts on our product is just asinine. We get told costs are coming down and they hold it internally for a few weeks and when something is going up the increase is taken as the PO is being made.
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SonofAbeach

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Reply with quote  #7 
It is too bad more Restaurant owners and Sales Rep's don't read and/or participate on this site. You could almost run a college course on Food service Sales. First you have Corporate Marketing/Buying Group Program, then you have individual Local Marketing, then you have the Buyers Mark-Up before the Sales guy even add's his. Now keep in mind these Distributors rent a convention center, ball park, stadium, etc. and charge us anywhere from $2000-$8,000 for a 10'x10' booth, and we have all been to food shows, how many booths do you see? This does not even include electric, carpet, preparing items and this is usually twice a year! Then they expect you to offer deals for their customers on top of everything else you give them. NO! they don't take from the Marketing money you give them, they want you to keep digging and do everything while they still call those end users, "Their Customers" LOL and any samples that are pulled from them to help grow "Their Sales", gets billed back and/or deducted at their P2 or Marked up price. (Or at least they get away with it from most Manufacture'). Then they still get a little more from the end user, for fuel charges, or higher minimums etc. Did I forget anything??
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brokerexpert

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Reply with quote  #8 
The brokers commissions are reduced as all these marketing, promotional programs and food shows costs are deducted from the gross sales, thus lower commissions. Let's call it what it really is, A Scam. Corporate America has ruined the business that we once loved at all levels. The manufacturers are just as greedy as the distributors, and have allowed this to happen by giving them large amounts of money at a cost to all of the sales people. Computers will never sell a new product.
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Investigator

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Reply with quote  #9 
Quote:
Originally Posted by brokerexpert
The brokers commissions are reduced as all these marketing, promotional programs and food shows costs are deducted from the gross sales, thus lower commissions. Let's call it what it really is, A Scam. Corporate America has ruined the business that we once loved at all levels. The manufacturers are just as greedy as the distributors, and have allowed this to happen by giving them large amounts of money at a cost to all of the sales people. Computers will never sell a new product.


Sure the manufacturers are in cahoots with the distributors. How many supplier companies existed in 1980 versus 2017? The consolidation that has taken place over 3 decades is beyond belief. These large food cartel companies could not have achieved their domination without consolidation of distribution, so one hand washes the other.

It's one giant cartel system, with the big food companies working hand and glove with the big distribution networks, and both represent Wall Street and the City of London. Look they don't really care in fact they prefer if the independent restaurant disappears. They want no independent businesses to be left standing in this country. 

And beneath the giant processors and their distribution partners sits the dwindling bankrupt independent US farmer, trying to deal with this monster from their end and losing badly each and every year they remain in business.
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DistributionDiva

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Reply with quote  #10 
This. I don’t always love the way Investigator delivers the message. But that doesn’t mean he is wrong.

Quote:
Originally Posted by Investigator


Sure the manufacturers are in cahoots with the distributors. How many supplier companies existed in 1980 versus 2017? The consolidation that has taken place over 3 decades is beyond belief. These large food cartel companies could not have achieved their domination without consolidation of distribution, so one hand washes the other.

It's one giant cartel system, with the big food companies working hand and glove with the big distribution networks, and both represent Wall Street and the City of London. Look they don't really care in fact they prefer if the independent restaurant disappears. They want no independent businesses to be left standing in this country. 

And beneath the giant processors and their distribution partners sits the dwindling bankrupt independent US farmer, trying to deal with this monster from their end and losing badly each and every year they remain in business.
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SonofAbeach

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Reply with quote  #11 
Everything is not always a conspiracy. I can only speak for our Global Manufacture and we are far from, "in", with the Manufactures, we have never decreased the brokers commissions, in fact, when we, "Regionals", Close our own deal and force items into distribution. We strip all Marketing for anything sold to that customer, but we keep paying the broker to handle any situations that might come up with that customer. If you want to succeed in this business than build the relationship, own the end user in such a way that he considers you an asset to his business. Offer him more than just, " Do you need Sugar Packets, How is your Salt, Do you need more bleach"? LOL, I laugh at some of these new Distributor Sales Rep' I see hired out on the streets! 
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wilsontennis

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Reply with quote  #12 
Quote:
Originally Posted by DistributionDiva
This. I don’t always love the way Investigator delivers the message. But that doesn’t mean he is wrong.


Only commenting on two items:  1) it is hand IN glove, not and....  2) 97% of all farming is still family owned.  No doubt, big companies have a disproportionate amount of land but still.  And bankruptcies in farming are at a rate of 2 to 3 per 10,000 which, statistically speaking is far less than the general population.  


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Investigator

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Reply with quote  #13 
Quote:
Originally Posted by wilsontennis


Only commenting on two items:  1) it is hand IN glove, not and....  2) 97% of all farming is still family owned.  No doubt, big companies have a disproportionate amount of land but still.  And bankruptcies in farming are at a rate of 2 to 3 per 10,000 which, statistically speaking is far less than the general population.  



Well if anyone is an expert regarding "hand in ....." it would be you Mr Vertical Integration . You should check the aggregate farm income for 2016. 

Mr Mini Skirt, 60% of principal farm operators work "off the farm" sort of a subsidy for the cartels. Actual farming median income earned by farm house holds in 2016 was -$940.00 per farm household (yes they earned negative $940.00 from farming) and estimates for 2018 are projected to be -$1,316.00 in farming income per farm household. Aggregate net farm income is projected to drop another $4.3 billion.

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Investigator

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Reply with quote  #14 
Quote:
Originally Posted by SonofAbeach
Everything is not always a conspiracy. I can only speak for our Global Manufacture and we are far from, "in", with the Manufactures, we have never decreased the brokers commissions, in fact, when we, "Regionals", Close our own deal and force items into distribution. We strip all Marketing for anything sold to that customer, but we keep paying the broker to handle any situations that might come up with that customer. If you want to succeed in this business than build the relationship, own the end user in such a way that he considers you an asset to his business. Offer him more than just, " Do you need Sugar Packets, How is your Salt, Do you need more bleach"? LOL, I laugh at some of these new Distributor Sales Rep' I see hired out on the streets! 


What's ironic is your conspiring with the operator, but then again not everything is a conspiracy. Those sugar packets are a result of conspiracy as well as the salt, bleach, milk, ice cream, the trucks that deliver the goods, everything is a conspiracy. 


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SonofAbeach

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Reply with quote  #15 
How are we conspiring with the End User? Are they not the deserving party of any deals? LOL All the arguing is about how the operator is getting screwed over. Our approach is to take care of the operator first??
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Investigator

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Reply with quote  #16 
Quote:
Originally Posted by SonofAbeach
How are we conspiring with the End User? Are they not the deserving party of any deals? LOL All the arguing is about how the operator is getting screwed over. Our approach is to take care of the operator first??


any concurrence in action;combination in bringing about a given result.

Do you have any children? Did you conspire with your wife to bring them into the world or did you slip on the throw rug and you just happened to land on top of her? Another conspiracy eh? 
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