One distributor or twenty

One distributor or twenty

By 

Rich Wolverton

Former VP of Category Management, FSA

Published 

January 21, 2022

One distributor or twenty

Distributors play a critical role in foodservice today.
As an operator you really need to consider multiple factors before choosing the right ones for you.

Here are some factors to consider when choosing distribution partners:
  • On time delivery – getting deliveries when you expect, whether it is a specific hour or just the delivery day
  • Orders shipped as promised –   What is YOUR added workload when an order is shorted?
  • Competitive pricing – Are you receiving competitive pricing on each item?
  • Freshness - Does each item meet your expectation?
  • Market updates - When do you hear about price increases or market shortages? Is it when your shipment shows up or in time for proper planning?
  • Business operations - Do you need assistance with menu development or help with operations from your distributor?

So, how many distributors do you need to run your operation at peak performance levels?

One distributor – high trust – high service – must be great at everything, right?

I had the pleasure of spending 18 years on the category management side of foodservice distribution.
One of our Guiding Principles started with, “The customer is the boss.”
We worked hard to take care of the operator we were proud to serve because “…they pay all of our salaries.”
I was proud to work with a great team of sales associates. Most of these men and women put in long days serving customers they loved.

The relationship between the operator and their distributor(s) can range from “tied at the hip” to “necessary evil.”

What builds or breaks the relationship? Typically, I’d say it is trust.

So, what builds trust between an operator and a distributor?

  1. Do what you say you are going to do & keep your customer informed. Never allow your customer to be blindsided.
  2. Deliver orders on time. This is hard today with labor shortages in the warehouse and with drivers for many distributors.
  3. Ship what you said you would ship every order. The number I’ve seen is most distributors aim for 98.5% order fill. That may include unauthorized substitutions to cover a shortage.
  4. Deliver food in the right condition. Frozen should be frozen. Fresh should be fresh, the right temperature, code date and looking good (fresh, crisp lettuce). Boxes of beef or chicken not leaking.
  5. The distributor should offer information on when to buy, so the operator can save money on arising market or smart seasonal buy.
  6. Sharing smart marketing ideas.
  7. Always offering the best value for the operator .

Conversely, you may be able to guess what breaks trust between a operator and a distributor.

  1. Lack of respect for the operator or staff.
  2. Late trucks or missed orders.
  3. Key items, which were ordered, getting shorted on the order without a recovery plan.
  4. Product quality was less than expected.
  5. Cost of goods increase without a good reason.

Some operator buyers have a Prime Vendor relationship with a distributor, while others “play the field” and check the pricing of one distributor against others.
Both approaches have risk. When you lean on just one distributor, you are trusting they will take care of you all the time. Your risk is they may screwup & you are left with their problem becoming your problem.
It could been other customer took all of a tight inventory item leaving you with nothing. The distributor’s vendor may not ship an item, leaving you with nothing, again. I hate to say it, but the distributor sales rep may start sneaking your costs up, hoping to improve their paycheck.

If you play one distributor against another, you may spend HOURS making sure you get the best deal.

If you play one distributor against another, you may spend HOURS making sure you get the best deal. you are filling out a spreadsheet or checking online pricing or running to the local cash & carry.
You may save a few dollars, but you lose hours every week making sure you are getting the right value.

So, what’s the answer to getting the best cost of goods on every order without spending all your time buying?

Reeco is a new marketplace platform where a operator buyer can easily and accurately enter their needs for each item, see what the competitive offers are from top distributors and decide which items to purchase. This can all be done in a few minutes.

When the order arrives, the receiver simply takes the tablet supplied by Reeco and validates the product was received in good condition! Savings typically range from 12-19%!

Reeco solves problems for the distributors, too! No more worry about bad debt, sell only what you have (no more orders for products you don’t have in stock), quickly react to changing conditions.

Lower cost-to-serve!

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