20 Jan How to negotiate with your restaurant suppliers
Dealing with restaurant suppliers is not an easy task. We need time to think and prepare the negotiations with them and to plan our strategy. January and February are quite quiet months in the hospitality industry, and nowadays there are so many COVID restrictions limiting our activity, that this is the moment that we have a bit of time to do some important administration work.
A good relationship with your suppliers should be part of your strategy. A supplier is an ally, a trusted friend whom we must treat with respect. We have a symbiotic relationship in which neither can live without the other, we need them to provide us with quality ingredients at the right time.
I’d like to leave you some tips to help you when negotiating with suppliers. I hope you find them useful.
1.This is the tip that takes more time, but it’s certainly the most useful. Collect all the invoices and check how much you have spent by supplier throughout the year. (If you use Pendulo, simply download an annual report, you will have it in a few minutes). Order your suppliers from highest to lowest purchase volume. Normally you will have about 7/8 suppliers that will account for 80% of your annual expenses. Those are your key suppliers and you must meet with them first to have check sales volume and prices.
2. Try to reach an agreement in which everyone wins, that is, you can include some more products from the range of that supplier, while he gives you a discount or better price on the total volume.
3. Remember that when we negotiate we must not only take into account the price, but also the quality, the payment conditions, the service and how essential the products of that supplier are for us.
Keys for a good relationship with suppliers
4. Before choosing suppliers for your restaurant, talk to several of them and compare prices and service. My recommendation is that you keep two for meat, fish and vegetables and a single supplier by category for the rest. Protein and vegetables are generally the most critical part of our menu and it is good to have flexibility and not “have all your eggs in one basket.”
5. Just as we ask friends of the sector for a reference to see which supplier we select, they also ask for a reference. So respect and be good to your suppliers.
6. Always ask for a discount on the first offer they make you. There are people in the industry who offer you the best price they can, but most have room for negotiation.
7. If your menu is seasonal, try to price your 10/15 critical items during the season so that you can set your costings and menu prices accordingly every 3 months.
8. Try to comply with the supplier payment conditions at all times. Remember that you must have a good relationship with them and you need consistency in the quality and reception of your orders.
9. They say there are difficult providers. In my opinion, there are not. As we have already mentioned, suppliers must be allies, we must have a good relationship with them. If they make things difficult for us instead of supporting us, it is time to let them go.