Vendor Relations

Take care of your vendors! Are you noticing a theme here? Take care of your people. Among them are your vendors. Offer them a drink when they come in. Do they want to sit and take a break? This will put you at the top of your list. Remember that sometimes certain items may not arrive on time, or at all, if you’re on your vendors top 10 list, they’ll help you solve your problems as fast as possible. With vendors, you’re the customer. Your vendors are really important. Now here’s the tricky party. You wanna make sure they’re doing a good job, BUT you need to keep an eye on them too.

Here’s a good practice, one that EVERY food service operator should be doing on a regular basis…”Spot-checks!” For example, if you order 20 pounds of chicken, you should be doing spot-checks on them regularly. Throw the chicken on the scale, make sure it actually reads 20 pounds. You’ll be surprised how often it’s below. If it’s 18.5 pounds you need to address it, because over the course of the year, it’s a huge waste of money for you and a huge profit for them. Many times there could be a totally reasonable explanation for this, perhaps a distributors scale needed to be recalibrated. However, despite the source of the discrepancy, you need to be paying for accurate weights and certainly not paying for anything you’re not getting. Designate a specific person to monitor the prices on the products you’re ordering; paper goods, poultry, etc. My employee Erin (who’s still with me to this day) did this for many years (many years ago) and ALWAYS, ALWAYS found huge discrepancies. This is money put the window, money wasted. You need to be sure a month into a new vendor your chicken hasn’t jumped 50 cents per pound. If you can get a commitment in writing for the pricing to hold for a certain period of time, that’s great too.  You need to keep an eye on them to make sure they’re doing a good job for you, assign someone to this task.

Your other vendors are human beings too. They work hard, they’re hauling cases of soda in the middle of the summer. Don’t walk THROUGH them like they’re ghosts because guess what? There’s gonna be a time where you need them to come through for you too. If they have a situation where two companies have an issue, you want to make sure they’re going to handle yours first.

As for you, there should be a review of vendor pricing every year. You want your vendors on their toes, they’re not the only game in town, if they know you’re weighing their chicken that’s going to keep them on their toes, if they know you’re going to put the contract out to bid every year, it’ll also keep them on their toes. To get the most bang for your buck you need to play this game smart!

In the foodservice industry, experts agree that there is a real need for operators to connect with their food suppliers. Establishing a solid working relationship between the two is an important ingredient to your success. To call the restaurant/caterer and food supplier relationship a marriage is not far-fetched. Both sides rely on each other to be successful. But like all marriages, one or both sides may take the other for granted which results in occasional rough patches. Good communication is vital to working through these times. If the business relationship is mutually beneficial then it is worth investing in the partnership by striving for a solid association.

Ric Scicchitano, Senior Vice President of food and beverage for Dallas-based Corner Bakery, agrees that investing in relationships with suppliers is critical. “We encourage our general managers and area directors to get to know the local distributor reps,” he says. “We have high expectations of our suppliers, but we also treat them well. Ultimately, when a problem comes up, you want the person on the other end of the line to have your best interests at heart. They’ll break their back to get what you need.”

“When I call a vendor with a problem, I expect them to solve it – quickly. We’re a no-nonsense company that delivers the finest customer service experience in our industry; I expect nothing less from our vendors.”

INFORMATION

Fact: You are now the customer.

Fact: You may choose to operate under the premise, “I am the customer. I call the shots. They will do whatever I want.”

Fact: It is an ill-advised road to travel.

Reasons: You need good and reliable suppliers. Consider them an extension of your staff and work diligently on cultivating positive partnerships. Good vendors are an important slice of the success pie. A healthy working relationship with vendor partners will motivate them to work hard to meet your expectations, and to find products and services that will help your business grow.

Vendor representatives need long-term partners to succeed. They can work towards this goal by suggesting new menu ideas, introducing cutting-edge products and technology, and keeping an eye on the quality and timeliness of deliveries. Vendors may even pass along information about your competitors and invest in your company. You will receive better service when vendors have a personal interest in your long- term success.

Is it ok to be demanding?

It is OK to be a demanding customer – just abide by the golden rule. Successful businesses often have hard- driving, aggressive pilots behind the wheel. But being in the driver’s seat does not mean you have to run everyone over. You can be polite and firm at the same time. Be clear and direct about your expectations regarding quality of product and timeliness of delivery. Hold your suppliers to their guarantees. Make sure they stay competitive. Tell them you never expect to pay a higher price than their other customers.

Is it ok to replace vendors?

Provide your vendor with at least one opportunity to get on the same page as you. They will appreciate your honesty and the chance to make amends.Is it ok to replace vendors?

Along the way, you will have to replace vendors because they are not performing to your expectations. Before making a change, consider sharing the facts with them. Provide your vendor with at least one opportunity to get on the same page as you. They will appreciate your honesty and the chance to make amends.

Is it ok to have multiple suppliers?

In some cases, do not rely on just one supplier. For example, having a relationship with two produce companies enables you to have a backup plan if your primary supplier breaks down on the road and can’t deliver on time. It will also allow you to compare the quality and pricing of produce such as a case of lettuce or a flat of strawberries. If you are working with two companies that provide the same product, let them both know that you are doing so. You will be appreciated for your honest communication and it will keep both suppliers on their toes.

How are you perceived as a vendor customer?

How does your local produce supplier respond when you call with an order? Are they helpful and attentive or do they seem hassled and harried? How you are treated as a customer is important, but have you ever considered how your suppliers look at you as a customer?

Consider your most “challenging” customer. How do you and your staff feel about dealing with them? Do you want to be perceived by your vendors as someone like that?

Example of a Good Customer

“I like Good Guys Catering. They order consistently and pay their bills on time. They call by 3PM, and are polite, and respectful. My drivers report our orders get checked in without delay, they have a good banter with the kitchen staff and occasionally are offered a cold drink or a taste of something being prepared.”

Example of a “Challenging” Customer

“Here they go again. Calling just as I have one foot out the door — as usual. How many times have I politely asked them to call by 3pm, so I don’t have to call my supplier, assuming my supplier hasn’t already left for the day? And it always feels like they are talking down to me. No matter how hard I try to please them, they always find something to complain about.”

How you treat your vendors is extremely important. It can either make or break a successful vendor partnership. The nature of this relationship, for better or worse, will likely influence the following:

• The quality of product that is picked and delivered to your business.
• The prices you are paying.
• The level of responsiveness when you need something last minute.
• What they say about you to other vendors and perhaps even the competition.
• A vendor’s willingness to negotiate better prices or extend longer payment terms.
• The point is this. How you treat your vendors as a customer matters. Showing respect and consideration can benefit your business.

HOW TO BE A VALUED CUSTOMER

If you want vendors to go the extra mile for you, then be a good customer. Here are five ways to get started in the right direction.

Your vendors want to do a good job. Place your orders within the time parameters they request. Give them sufficient advance notice if you need a specialty item or are going to be placing an unusually large order. If you know a historically slow week is on the horizon, tell your vendor. It may affect their purchasing pattern or staffing schedule for that week.

Personalize the Relationship

Learn the names of all your vendors and use it often. Visit their offices. Ask about their family. Offer them a drink or a sandwich. Tell them that you appreciate their hard work. Let their boss know they are doing a good job for you.

Involve Them

Keep the good vendors aware of what is going on in your operation. Share information about new menu items and special promotions. Your suppliers can be a liaison for new customers.

Golden Rule

Treat your vendors the way your best customers treat you. Be communicative. Treat them fairly and respectfully. It is ok to be demanding in this context. Be loyal. Pay your bills on time.

Have you ever received a call from a customer saying what a great job one of your employees does for them? The customer is complementing both the employee and your business. An “atta boy” out of the blue has a tremendous positive effect on the employee and company receiving it.

It is very easy to instill that feeling of goodwill towards your suppliers. Try this at the end of the year. Make a list of the delivery representatives who come to your business throughout the year. Figure out the ones who really deserve some recognition. Ask the members of your staff who interact with them for their opinions as well. Then write at least one feedback letter or more, if warranted, to their boss.

Guaranteed Tip

If a vendor knows that a customer is checking their weights (which most companies do not) the scales will always tip in your favor.

Negotiate Better Pricing

Does this ever happen? A regular customer calls and says, “Our standing weekly order for 20 people is doubling to 40 people. My boss wants to know if we can get breakfast (currently $10 a head), and lunch (currently $15 a head) discounted?” Nine times out of ten, the answer is “yes” — usually it amounts to a 10% discount.

Why are they getting a discount? BECAUSE THEY ASKED.

Does this mean that every time someone asks for a discount they are going to get one? No. Multiple factors are taken into consideration. In this scenario, a $10 per person breakfast is discounted to $9, and the $15 per person lunch to $13.50.

By asking, they are saving $2.50 per person. (at 40 people = $125 per week or $5,000 per year)

The same works in the other direction (sometimes). You are a customer to your vendors and hopefully a very good customer to some. You will be in a good position to ask for better pricing if you have done the following:

• You order regularly.
• You have been a loyal customer.
• You pay your bills on time.
• You are courteous on the phone when placing orders.
• You are respectful of the delivery drivers.

So, if your customers occasionally ask about better pricing and often receive it, doesn’t it stand to reason that you could do the same with your vendors?

Bottom Line

Keep as close of an eye on what you are paying for your products as you do on the sales your products and services are generating. Reviewing this consistently and diligently does require time. If you are in a position to have an employee do this as part of their job description, or perhaps help you with it, do it. It is that important.

8 Tips to Sustaining Mutually Beneficial Vendor Relationships

1. Put Your Cards on the Table

Communicate your business goals as they relate to your vendors. If you are striving to grow your catering business, the suppliers you choose should be on board with your vision. Give your vendors specific examples of your staff delivering exemplarily service to your customers. They need to know you expect the same from them.

2. Get It All in Writing

Document the agreed upon terms and conditions including delivery schedules and procedures, pricing policies, product quality expectations, communication methods, payment terms, ordering procedures, and backup plans.

3. Schedule Update Meetings

Pre-schedule periodic meetings to discuss progress, issues, and concerns. Update and document any revisions to the original agreement.

4. Communicate Your Perceptions

Be direct. If any of your expectations are not being met, let the vendor know. We all have had the frustrating experience of losing a customer, only to discover the reason(s) later. Our immediate thought is, “I wish they had let me known so that we could have corrected the issue.” Your vendors feel the same way. If there is a problem, tell them. There may be an easy solution.

5. Respect their Guidelines

Place your orders on time. Meet the minimums. When they make a delivery, check it in promptly. Clearly, there are occasions when your vendor needs to be flexible, as you are with your customers – just remember that they have ordering deadlines as well.

6. Be Reasonable

Miscommunications, unforeseen circumstances, and mistakes are inevitable. Consider how some of your catering customers respond when they are affected by these situations. React to your vendors in the manner in which you appreciate being treated.

7. Demonstrate Loyalty

If it isn’t broken, don’t fix it. When a vendor has worked hard and done a good job servicing your business, stay with them. When you are loyal to your vendor, especially after a mishap, they will inevitably return the goodwill.

8. Pay Your Bills on Time

Paying your invoices on time is important. However, if circumstances necessitate a late payment, let them know as soon as possible. Your vendor will appreciate the information, as it may affect their financial obligations as well.