Know why your local food distributor often charges more for the same items you might find for less at Restaurant Depot or Costco? Well, to get lower food costs from local distributors comes down to how often the delivery truck stops at your place each week.
DSR Dave Miesse explains how you can get the goods delivered and still save money. Oh, and save time by eliminating those emergency trips to Restaurant Depot!
Lower food costs video transcript
I’ve talked to a lot of operators in the past two and a half weeks… most of them are talking about price. A lot of them are going to Costco and Restaurant Depot or whatever… and most of them always ask me why does it cost them so much more from the distributor than it does if they go pick it up at Restaurant Depot.
Here’s some distributor math, so that you understand what costs are involved… 32 percent of a distributor’s expense is delivery…15 percent is for warehousing and 20 percent for sales.
And so what you can do as an operator, if you have room, is to ask for less deliveries… that means getting more per delivery. You can probably cut prices by 2, 3 or 4 percent overall or even more if you make some adjustments.
A lot of people think that they’ve got to get more deliveries because they want fresh tomatoes or other items. So, they get deliveries three days a week thinking the tomatoes are going to be really fresh.
But you need to know that the distributor probably gets those tomatoes coming from Salinas, California or Nogales as a truckload once a week or maybe every two weeks. And so the chances are the tomatoes delivered to you on Wednesday came from the same load that is delivered to you on Friday.
So you think you’re getting fresh tomatoes… but they’re the same tomatoes that came on the same truck coming from California a week ago. And that’s certainly the way it is with most things.
If you have the storage room, start whittling down your deliveries. Maybe go from three days to two days a week. And if that works and your rep asks why you’re doing this, tell them you know his or her’s biggest cost is delivery. Let them know you understand more how it works now and can you get a better price for helping them out. Most of the time they’re going to be willing to do that because they want to reduce delivery because they’re getting hammered back at the office. Everybody wins… they get their margins up and you get a better price.
Yeah it’s a win win. And also the flipside of it is going to Costco or Restaurant Depot takes time out of your day. So there’s a cost for the not having your products delivered… you have to work that into the equation as well.