Am I paying the right price?
Am I the only one who typically finds a better price on a product or service they purchased… a week or 2 later?
Do you ever find yourself asking these questions?
Fortunately what may happen to us in our personal lives does not happen to my clients. My clients buy millions of dollars in food and hospitality products. They have an advantage over us… they are buying the same/similar products over and over. Experience does matter and with the right approach you can ensure ongoing competitive pricing.
Best in class organizations control the margin (net net margin) of their suppliers or at least have a good understanding of supplier profitability with their business. Every organization is entitled to make a profit. You can’t ask your suppliers to do business with you just to run a production line or to cover their overheads… it’s not sustainable.
On the other hand, let your competitors pay double digits margin to their suppliers and set up fair business deals with yours (or the passé “win-win” relationships). You may find an “opportunity buy/deal” once in a while and take advantage of it, but long term, it pays to apply a 5 step process: Step 1: Benchmark, Step 2: Challenge, Step 3: Bid, Step 4: Control, Step 5: Re-bid.
In our opinion, the purchasing department’s biggest weakness, especially for small and mid-size restaurant chains / foodservice operations, is their lack of resources. Sourcing an additional purchasing employee or a 3rd party supply chain consultant will return you 10 times what you invest. We have the data to prove it. Check in with us at www.Optimbuy.com