Identify your needs.
It’s always important to know what went wrong in your previous vendor relationship. You ended it for a reason. This is a crucial step in determining who your next vendor will be. Map up your ideal distribution team, and while doing so, keep the following considerations in mind.
Do your financials and their payment options align?
Knowing what you need is not enough, but knowing how much you’re willing to pay for it. Make sure you sit with your accountant (or your books) to figure out your budget and how far you’re willing to stretch that budget. Remember, when you increase your budget, you may also have to increase your mark-up in order to receive a sufficient return, and that affects your customers. It’s essential to keep them top-of-mind.
When dealing with vendor payment structures, there’s generally two types: cost plus fixed price or cost plus percentage price. The pricing model that works for you is dependent on the type of supplier, but it may be favourable to negotiate for fixed pricing considering that food costs are continuously on the rise. You wouldn’t want to be decreasing your margins in the foreseeable future. Place your controls where you can.
What is their service standard for delivery?
In the food business, we don’t like to keep our customers hungry and waiting. You want to be treated the same way by your vendors. Punctuality is everything. We rarely come across a service industry that lives and dies by inventory shelf life like the restaurant and foodservice industry. Making bulk orders on weekly basis makes it easy to lose track of expiry dates, but as restaurant operators, unused inventory or using expired ingredients is a hit to your paycheque and a risk to the business. This makes finding a vendor with an excellent track record of on-time delivery and exceptional service all that important for your business and relationship.
Do they expect minimum or maximum order quantities?
This ties in with delivery requirements and inventory management. You need to make sure that your kitchen needs align directly with a vendor’s minimum orders. If their minimum order quantity leaves your kitchen with excess inventory, or their maximum order quantity has your kitchen empty out too quick, they may not be the best fit.
Understand their lead times and order availability.
Any good business relationship should operate on the same schedule. Does your restaurant operate with the just-in-time delivery method or just-in-case where you order more inventory where demand is unforeseeable? Either way, you will need to identify your restaurant’s needs and choose the vendor who can adhere to this schedule. Vendors are now using technology to optimize their delivery schedules and routes. This makes it easier for you to determine if there is a fit.
Review their quality assurance procedures.
Your ideal vendor will hold their production quality to a high standard, especially in food and beverage. If their focus is purely on bottom line and driving revenue more than providing their customer with the quality products, you should seek elsewhere. As a foodservice operator, keep your eye out for how they run QA tests on allergen management, ingredients, sanitation and food tracking. You want to create a relationship to a supplier organization who runs thorough checks and are diligent in their analysis of production, packaging, delivery and overall handling protocols.
Research reputation and reviews.
Ratings are not just for restaurants, Uber drivers and Airbnb hosts. Consumers care about what’s in their food, and so doing your research is critical. Check out their website and look for more customer testimonials to see how well they’ve performed with other restaurateurs.
It’s always safe to send a message to one of your industry colleagues to refer a vendor they have had success with. You can also post a question about a vendor on our Member Forum to other Restaurants Canada members right here in the portal.
Finding the right fit.
There is no one-size-fits-all vendor in the restaurant business, and restaurateurs are generally engaged with multiple distributors to coordinate shipping schedules and ensure inventory is exactly where you need it.
Asking the right questions protects your restaurant, your time, and your customers. Selecting a vendor who can deliver on all of these fronts is setting up your restaurant for success and a long-lasting partnership.