Prices of food, beverages, packaging, waste removal and energy are all soaring – it’s unbelievable! There are big savings to be made when you negotiate lower prices, and use a new way of negotiating. When you remove some of the emotion from relationships you have with them, you’ll become better at doing deals.
Setting up systems, reminders, and templates will help you create a system of continual price monitoring and communication to get the best results. Strong negotiation skills are an important part of your growth as a business operator, and respectful relationships with suppliers create a real win-win for both parties.
Suppliers complain about their own problems – they face rising costs and staff shortages just like us. And in some areas, there’s a lack of competitive suppliers – you’re stuck with one or two, but there’s still room plenty of room to negotiate lower prices.
How to Be a Better Negotiator
Adjust your mindset – you’re a $200,000 p.a. customer, not a $4000 p.w customer!
Or you want to buy $25,000 of Product A over 12 months, not $500 per week!
Understand how supplier’s costs are set: suppliers buy goods, add their cost of admin, promotion and distribution (the blue line costs), plus their profit margin to arrive at the price they sell to you.
If you can help reduce their blue line costs, the savings should pass through to you: e.g. buy larger quantities less often, allow more flexible delivery times, minimum monthly order, faster account payment, electronic ordering – there are many things you can do. Talk to the suppliers – what do they suggest?
Set up a negotiation rhythm – set and forget doesn’t work anymore!
Organise a monthly meeting with main suppliers, at a time of your choice. At the end of each meeting, book the next one.
Call for Expressions of Interest from suppliers every 6 months, with a list of items and quantities required. This can be generated from your current ordering or menu management system.
Use a digital order system to track price changes – systems like Restoke do this automatically, so you can respond immediately to flagged items.
Ask for Special Deals as part of the supplier relationship: this could be free equipment eg coffee grinder, or free mineral water as a bonus for large coffee purchases. Or bonus stock in return for joining a liquor promotion.
Ask for the first option on run-out deals or special purchases the supplier finds e.g. a cheap pallet of tinned tomatoes from a supplier who went bust.
Ask for your costs to be covered e.g. menu printing in return for placement of their logo, or free coffee and milk for the annual charity coffee promotion.
Benefits of Better Negotiating…
There’s an immediate 8-10% saving to be made with many of your suppliers, particularly when you think of yourself as a $200K annual customer! Just ask!
You’ll have a new relationship of respect with suppliers – this is much more businesslike than worrying about hurt feelings.
Your regular meetings with key suppliers create real win-win relationships that build success in the future.
Start Today!
Call your top 3 suppliers and make time to meet, the first of regular monthly meetings.
Be prepared with a list of your purchases and annual purchase value – it can be surprising!
Start the move to an electronic ordering system that immediately flags price changes.
Want to get some 1 on 1 help? Talk to one of our coaches
Want the Action Sheet ? Click Here
Prices of food, beverages, packaging, waste removal and energy are all soaring – it’s unbelievable! There are big savings to be made when you negotiate lower prices, and use a new way of negotiating. When you remove some of the emotion from relationships you have with them, you’ll become better at doing deals.
Setting up systems, reminders, and templates will help you create a system of continual price monitoring and communication to get the best results. Strong negotiation skills are an important part of your growth as a business operator, and respectful relationships with suppliers create a real win-win for both parties.
Suppliers complain about their own problems – they face rising costs and staff shortages just like us. And in some areas, there’s a lack of competitive suppliers – you’re stuck with one or two, but there’s still room plenty of room to negotiate lower prices.
How to Be a Better Negotiator
Adjust your mindset – you’re a $200,000 p.a. customer, not a $4000 p.w customer! Or you want to buy $25,000 of Product A over 12 months, not $500 per week!
Understand how supplier’s costs are set: suppliers buy goods, add their cost of admin, promotion and distribution (the blue line costs), plus their profit margin to arrive at the price they sell to you.
If you can help reduce their blue line costs, the savings should pass through to you: e.g. buy larger quantities less often, allow more flexible delivery times, minimum monthly order, faster account payment, electronic ordering – there are many things you can do. Talk to the suppliers – what do they suggest?
Set up a negotiation rhythm – set and forget doesn’t work anymore!
Organise a monthly meeting with main suppliers, at a time of your choice. At the end of each meeting, book the next one.
Call for Expressions of Interest from suppliers every 6 months, with a list of items and quantities required. This can be generated from your current ordering or menu management system.
Use a digital order system to track price changes – systems like Restoke do this automatically, so you can respond immediately to flagged items.
Ask for Special Deals as part of the supplier relationship: this could be free equipment eg coffee grinder, or free mineral water as a bonus for large coffee purchases. Or bonus stock in return for joining a liquor promotion.
Ask for the first option on run-out deals or special purchases the supplier finds e.g. a cheap pallet of tinned tomatoes from a supplier who went bust.
Ask for your costs to be covered e.g. menu printing in return for placement of their logo, or free coffee and milk for the annual charity coffee promotion.
Benefits of Better Negotiating…
There’s an immediate 8-10% saving to be made with many of your suppliers, particularly when you think of yourself as a $200K annual customer! Just ask!
You’ll have a new relationship of respect with suppliers – this is much more businesslike than worrying about hurt feelings.
Your regular meetings with key suppliers create real win-win relationships that build success in the future.
Start Today!
Call your top 3 suppliers and make time to meet, the first of regular monthly meetings.
Be prepared with a list of your purchases and annual purchase value – it can be surprising!
Start the move to an electronic ordering system that immediately flags price changes.
Want to get some 1 on 1 help? Talk to one of our coaches
Check the other useful blog posts on the Foodie Coaches website…