The Restaurant Boss Ryan Gromfin knows you want two things from your local supplier: fair prices and great service.
Ryan returns to Chow Talks to chat about the hard lessons learned on how to get what you need as a restaurant operator. The hard knuckle approach of pitting supplier reps against each other might shave a few bucks off a case of tomato sauce. But don’t expect to get much service when you need it.
The bottom line is a competing distributor can beat any price on any given day. So, run fast the other way if a rep says they’ll offer lower pricing than your current supplier. You’ll end up paying more over the long run in most cases.
Work for the long-term balance between pricing and service, Ryan explains in this Chow Talks interview.
Fair prices video transcript
Dave and I were just talking about how certain clients had three or four vendors all literally sitting at a table and arguing over price.
So I go back to my restaurant owners, my operators, my clients and I say why are we doing this? Why are we thinking that price is the only thing we care about when it comes to a vendor relationship. Now, I fell into this by happenstance. But I happened to be moving to a new town and I didn’t know any reps there. I had always been a Sysco guy my whole life which is how I grew up and when I got to this new town, somehow I got introduced to a guy with an independent distributorship. And he was amazing.
We were doing four restaurants so we were doing pizza cuttings on cheese, sauce and tomatoes. And then the next thing we were doing burgers and the next day we were doing stuff for pastry. Anyways, he probably spent weeks and weeks with me… and he may never get my business. But he built a trust with me so he did get my business and then minute we filed for licenses, of course, every vendor was knocking on the door.
“Oh, I’ll beat his price,” they all said. And the words that naturally came out of my mouth were even if you could he’s never given me a reason to even entertain you.
He’s amazing. He’s the best rep I’ve ever worked with. Even if your prices are better I don’t care.
But in reality his prices were great. Why were his prices great? Because I had a verbal agreement with him. I said to my rep I said I’m opening up for four restaurants in the next year. I don’t save time to price shop. I don’t have time to do anything, but if you take care of me you’re going to get three-, four -hundred thousand dollars in business and sales from us.
So, do me a favor… this was just my instinct. This is why I said that instead of spending an hour a week driving in your car and looking for business to replace my business when I stop buying from you, use that hour a week to make sure I’m getting the best prices possible. To make sure I’m ordering properly. To make sure I shouldn’t be taking advantage of it deal that I don’t know about you do. Like he would call me and say hey you’re normal volume in plastic wrap among your four restaurants is X.
I can give you a great deal if you buy two cases of it right now. And he would cut my plastic wrap price in half… because I bought enough for a month instead of one order at a time.
And then he’d deliver it to me as I needed it. But the point is what I later came to know is this is a prime vendor agreement or a managed distribution agreement, depending on who you work with or whatever. But this basically says I’m going to guarantee you that I’m going to buy 90 percent of the products that you sell… I’m going to by 90 percent of them from you for the next year. But in exchange for that give me the best pricing possible contractually… not on a handshake but under contract where we can all audit each other. I give you my business, you give me best pricing. We’re best friends right now.
This game of how much are you selling this for this week… this guy is cheaper this week, this guy is cheaper next week. All you’re doing is taking people who have a mortgage and have kids and have bills and you’re scaring the crap out them… because you’re saying to them I don’t know what your income is going to be next week. It depends on what the guy upstairs says. your pricing is. Maybe you’re going to make money this week, maybe you won’t. But if you say to them… I’m going to guarantee you a commission for this long. You just have to go the guy upstairs and get me better pricing… and everybody wins.