Firing a Vendor

[ALynch]

Is there a proper way to dismiss a vendor. My predecessor had (believe it or not) 13 different food vendors, 4 of those broad line. I am trimming it back to 2 broad line vendors, and a seafood company. Some of the sales reps were selling to my predecessor for 10+ years and are very nice people and come to my restaurant every week, but I need to make a business decision here and streamlining my ordering by telling 10 people that I don't need to buy stuff from them anymore. What's the best way to do this?

[KYHeirloomer]

First off, forget the word "firing." That's what you do to somebody you are unhappy with, for one reason or another.

What I would do is first clarify the criterium you are using to choose the three who remain. Then call in the others, one at a time, and explain to them that, because of business constaints, you are forced to go with only two broadline, and one seafood, vendor, and that the ones you've chosen better meet the criterium.

If you don't have clear-cut criteria all you're going to do is get into arguments and create ill feelings. And many of them will go straight to the owners with their complaints.

But, frankly, I must be missing something. Why do you need to cut down on the number of vetted suppliers at all. Are you actually buying from each of them now? Or do they just keep coming around, hoping for business?

And what will you be gaining by reducing the number? Better prices? Higher quality? Better overall service? Consistency of brand products?

[kuan]

You can always re-assess after six months or so.

You can also make them fax in their prices by a certain day each week so you can fill out your bidsheet. Just pick and choose the best prices. Half of them will never do it. Problem is your paperwork multiplies like crazy.

[even stephen]

Alynch,
I feel your pain. I too am in a similar situation. I just don't have
the time or patience to deal with 15 or 20 different vendors. The
previous Chef and still existing Sous, felt it was necessary to spread
it around to create the flexibility of using all of them in emergency
situations. If you plan properly, there should not be to many "situations".
I don't think you need to do anything but give them a courtesy call and
explain why you are reducing your vendors. A letter is always nicer, but,
a call is fine. I think the worst thing to do is leave them hanging. Always
coming around. Wasting your time and thiers. Don't feel bad, its business.

[Godsmax]

I would recommend creating an inventory spread sheet with multiple colums in excel and e mail it to your vendors. Have them e mail you price weekly for next week and then all you have to do is cut and past.

i can show you mine if you like.

[foodpump]

The previous guy had all those vendors for two reasons: Good pricing and a pair of well protected, ah,...extremeties.

Trim back on the indy specialists, but DO NOT rely soley on the broadline guys. Once they know you are dependant on thier products, the prices change, and your, ah, extremities are dangling in the open. Believe it or not, most of the broadline guys get their specialty items from the same specialist vendors, then they add thier mark up. Where the broadline guys shine is with national packaged stuff, salad dressings, condiments, portion jams, etc, because they have the mega contracts with the mega mnfctrs, and can move the stuff cheaper than the indy guys. The indy guys have a corner on the import stuff, local meats, local dairy, and make some money on the side selling bulk to the broadline guys, but have to buy national brands through the broadline guys.

Basically, don't put all of your eggs, or foodcost in this case, in one basket, spread it out a little. It's good business and good insurance.

[ALynch]

Thanks for all the advice

Let me clear up the reasons for dropping the vendors

1: Minimum orders: Most of the guys require $500 or more minimum orders or there is a shipping charge of $25-75. We are averaging $150 a week on shipping charges and that adds up quickly.

2: My time: I don't have time to be looking at individual price sheets, and making 13 different orders a week. Both of my broad line guys deliver six days a week and offer direct order entry that links with my ChefTec software.

3: Pricing: By committing myself to $20,000 a month with each of the broad line vendors, I get substantial price cuts across the board. Yes I will end up paying more the the specialty items, but mainly meat and paper goods will be coming to me a 1% over vendor cost, with everything else 3-5%

4: My staff's time: As much as I would like to I do not get to see every order that comes in, and my staff does a fantastic job of checking things in. But it becomes a burden on them and me when we have 6 trucks coming in and still have to prep for service

Thanks again for all the advice

[kuan]

Wow! You must do like 1.5 million a year!

[foodpump]

You have some very good reasons for paring down to a few suppliers, but like I said, keep your options open, and "feed" a trimmed down list of the indys one or two orders per month.

The broadline guys can get you good prices on popular meat items (109-a's, 16-18 bacon, etc.) and they're great for condiments and anything with a long shelf life. My experience is that they are high with paper and disposables, cleaning products and chemicals, produce, and dairy. Anything "weird": specialty items, fancy pastry stuff, wild and wacky wonderfull new bar mixes, and they'll sock it to you and let you know they're doing you a big favor.

You will need to be on top of pricing, and the more people you deal with, the bigger and better your grasp will be, as well as your opportunity to source new, interesting, and better priced stuff, which affects your creativity as well.

Be carefull, don't get into a rut by letting the big boys sing you to sleep....

[ALynch]

We did $2.1 million last year, but here's the kicker since we are a private club and membership dues get factored into the equation I operate on a 50% food cost.

As for the vendors I am going to sit down with each one this week, and explain the situation to them and send a letter to their boss explaining that it was business decision and not the fault of the sales rep.

[chefleon]

So in your case, I'd say the proper way to dismiss a vendor is simply to blow them off. If they really want your business, they'll come askin'. Then tell 'em they suck, and why. 'Matter o' fact, this is how it always should be done.

[kuan]

Originally Posted by ALynch

We did $2.1 million last year, but here's the kicker since we are a private club and membership dues get factored into the equation I operate on a 50% food cost.

As for the vendors I am going to sit down with each one this week, and explain the situation to them and send a letter to their boss explaining that it was business decision and not the fault of the sales rep.

Ah dang you're a private club. Be careful which vendor you drop.

[even stephen]

Have you investigated the Club Managers Association program.
Their program works for free standing Clubs. If you are
a Club within a large group than you should be able to
finesse a 7 to 9% break across the board. Add in all chemicals
for housekeeping and the savings become substantial. Don't know
what your memberships like, but, mine is so particular and brand
specific, its virtually impossible to change certain things. The 50%
food cost is pretty standard, but with all the food related amenities
and special events not entirely funded by the membership, its still
takes work to hit that mark. For me the problems become difficult
when the Sales team is entered into the equation. Its about
realestate to a certain extent. Just a credit to cost of goods when doing
a fair amount of sales related functions can make it extremely hard
to stabalize the numbers. Good Luck. By the way, whats your beef
program. Prime, Angus, Grassfed? Am curious.

[ALynch]

Kuan, I know what you mean about being careful what vendors I drop. The two broad lines I am keeping have several board members and both of their presidents are members of my club.


Stephen, I did not know about the Club Manager's Association, as this is my first club but I will be looking into it. As for our beef, we are using choice hormone free Angus from West Creek farms. It is something I got sold on recently and our members are really into the hormone free, organic, free range, sustainable fish, and other things like that.

[Cat Man]

3: Pricing: By committing myself to $20,000 a month with each of the broad line vendors, I get substantial price cuts across the board. Yes I will end up paying more the the specialty items, but mainly meat and paper goods will be coming to me a 1% over vendor cost, with everything else 3-5%


ALynch
Meat and Paper at 1% and everything else at 3-5%...?

Someone is screwing with you big time.
Not only are those numbers not real, they are impossible.

There isn't a single DC that would stay in business for 60 days at those margins.

I suspect they are adding their overhead into your supposed cost of goods, then tacking on margin.

As an independent, you would do phenomenal negotiating a flat 9% margin on everything and even that would be generous.

As I said, someone is playing you like a fiddle.

The Cat Man