Food Vendors Who Should I Buy this Stuff From

Chapter 3Food VendorsWho Should I Buythis Stuff From?Chapter Outline Vendor-Selection CriteriaOverall ValueLearning Objectives Understand how methods used to select a vendor affect an F&B operation’s cost of sales.Develop selection criteria based on the operation’s needs.Ability to investigate potential suppliers and assess their overall fit into the operation.Learning ObjectivesDiscuss the implications of various pricing systems, ordering procedures, and credit terms.Describe perceived value and its relation to product quality.Describe the difference between AP price and EP cost.IntroductionWhen “hiring” a vendor:Review multiple applicantsInterview several candidatesNational chains provide purchasing supportStill must buy some items locallySome vendors have exclusive rights: your choice is to take it or leave itVendor-Selection Criteria ReferencesCompatibility/ChemistrySize of the FirmLocationDelivery ScheduleStorage AvailabilityVendor-Selection Criteria Free SamplesSocial ResponsibilityLead TimeReturns PolicyMinimum Order RequirementsPurveyor’s ExperienceVendor-Selection CriteriaTechnological CapabilityOrdering ProceduresReciprocal BuyingWillingness to BarterCooperation in Bid ProceduresLong-Term Contracts Vendor-Selection CriteriaCredit TermsCost-Plus PurchasingOne-Stop ShippingStanding OrdersVendor’s Consulting SupportVendor-Selection CriteriaReferencesJoin organizations to meet other buyersNational Restaurant Association NRA (local chapter)American Culinary Federation (ACF) (local chapter)Ask about vendors in the areaVendor-Selection CriteriaReferences (cont.)Ask for references from vendors and call them!Is the vendor fair, honest?Are drivers easy to work with?Are deliveries made on time? How are credits handled?Will the vendor make emergency deliveries?Vendor-Selection CriteriaCompatibility/ChemistryNote positive or negative vibesAre you comfortable with the person?Hopefully this is a long-term relationshipVendor-Selection CriteriaSize of the FirmLarge firmsAdequate inventoriesAbility to meet your needsMay be impersonalSmall or specialty vendorsMay not have large inventoriesMore personal serviceMay cost in the long run in stockouts and shortagesVendor-Selection CriteriaLocationThe closer the betterStaff members may need to pick up itemsWill-call or cash and carry buying will be easierIdeal world – between your home and the restaurantVendor-Selection CriteriaDelivery ScheduleMay not always have a choice as to timeEnsure that a knowledgeable person is available to receive deliveryDon’t use a purveyor who uses third-party shippersVendor-Selection CriteriaStorage AvailabilitySometimes available after a big orderStockless purchase play – pay for the order but receive it in small amountsVendor-Selection CriteriaFree SamplesGood for trying new productsMay make some managers nervous Super Bowl tickets aren’t “free samples”Vendor-Selection CriteriaSocial ResponsibilityDo manufacturer’s employees receive a living wage?Does the vendor buy from minority- or women-owned firms?Vendor-Selection CriteriaLead TimeTime between order and arrival of shipmentThe shorter the betterLets you make better ordering decisionsSaves you money in the long-runHelps keep inventories at manageable levelVendor-Selection CriteriaReturns PolicyIs it a hassle to get a credit to your account?Must you pay a fee for the goods to be picked up?Is there a restocking fee?Best when the driver gives you a credit slip right on the spotVendor-Selection Criteria Minimum Order RequirementsMeeting the minimum order requirementMay qualify you for free deliveryMay give you will-call privilegesMay be more than you can do – so find another vendorVendor-Selection CriteriaPurveyor’s ExperienceDo you want to be a new purveyor’s guinea pig?Financial stability is an issue hereLook for a good track record when seeking a vendorVendor-Selection Criteria Technological CapabilityAccessible online?Product availabilityNew productsRecipesCurrent promotionsStill need face-to-face contactTrendsGossipVendor-Selection CriteriaOrdering ProceduresOnline is preferableAvoid complicated ordering systemsVendor-Selection CriteriaReciprocal Buying“I buy from you if you buy from me”Not a good ideaBreak even arrangement at bestOften supplier will take you for granted and you will lose servicesVendor-Selection CriteriaWillingness to BarterTradeoutsIs vendor a member of a barter group? A $500 dinner may only cost you $200Food vendors don’t usually tradeAdvertising account executives like these kinds of tradesVendor-Selection CriteriaCooperation in Bid ProceduresRequest for QuoteGood to shop around occasionallyCurrent vendor may be responsiveCurrent vendor may be secretive and not respondOnline systems provide information immediatelyVendor-Selection CriteriaLong-term ContractsSome vendors may not commit to long-term prices or product availabilityMost vendors want large buying commitments before committing to long-term contractsVendor-Selection CriteriaCredit TermsAsk aboutFinancingDiscountsCash on deliveryPrompt paymentsPayment in advanceDeposits for equipment and packaging Credit PeriodVendor-Selection CriteriaCost-Plus PurchasingDefinition: purveyor’s cost plus negotiated percentage markupBuyers have a love/hate relationship with this processVendors don’t like cost-plus – they take on more riskVendor-Selection CriteriaOne-Stop ShoppingAlso known as: sole-source, prime-vendor, preferred-provider or single-source procurementEasy for the purchaserMay cost more but result in labor savingsVendor-Selection CriteriaStanding OrdersDriver leaves enough product to bring you up to par stockTypical items: dairy products, bread, soft drinksRemember to watch the driversVendor-Selection Criteria Vendor’s Consulting SupportSource of product informationNetworking sourceWhen buying equipment, vendor may help with health and/or building permitsOverall ValueValue – cost of the product plus additional supplier servicesEdible portion (EP) cost—servable or usable costAs-purchased (AP) price—price of product on deliveryBetter to pay higher AP if it results in lower EPMost Important Vendor-Selection CriteriaIt’s really up to youMost buyers wantConsistent product qualitySupplier servicesAP priceLook for consistency, dependability, loyalty and trust