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Chapter 3 Food Vendors Who Should I Buy t his Stuff From?

Chapter 3 Food Vendors Who Should I Buy t his Stuff From?. Chapter Outline . Vendor-Selection Criteria Overall Value. Learning 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.

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Chapter 3 Food Vendors Who Should I Buy t his Stuff From?

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  1. Chapter 3Food VendorsWho Should I Buy this Stuff From?

  2. Chapter Outline • Vendor-Selection Criteria • Overall Value

  3. Learning 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.

  4. Learning Objectives • Discuss 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.

  5. Introduction • When “hiring” a vendor: • Review multiple applicants • Interview several candidates • National chains provide purchasing support • Still must buy some items locally • Some vendors have exclusive rights: your choice is to take it or leave it

  6. Vendor-Selection Criteria • References • Compatibility/Chemistry • Size of the Firm • Location • Delivery Schedule • Storage Availability

  7. Vendor-Selection Criteria • Free Samples • Social Responsibility • Lead Time • Returns Policy • Minimum Order Requirements • Purveyor’s Experience

  8. Vendor-Selection Criteria • Technological Capability • Ordering Procedures • Reciprocal Buying • Willingness to Barter • Cooperation in Bid Procedures • Long-Term Contracts

  9. Vendor-Selection Criteria • Credit Terms • Cost-Plus Purchasing • One-Stop Shipping • Standing Orders • Vendor’s Consulting Support

  10. Vendor-Selection Criteria • References • Join organizations to meet other buyers • National Restaurant Association NRA (local chapter) • American Culinary Federation (ACF) (local chapter) • Ask about vendors in the area

  11. Vendor-Selection Criteria • References (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?

  12. Vendor-Selection Criteria • Compatibility/Chemistry • Note positive or negative vibes • Are you comfortable with the person? • Hopefully this is a long-term relationship

  13. Vendor-Selection Criteria • Size of the Firm • Large firms • Adequate inventories • Ability to meet your needs • May be impersonal • Small or specialty vendors • May not have large inventories • More personal service • May cost in the long run in stockouts and shortages

  14. Vendor-Selection Criteria • Location • The closer the better • Staff members may need to pick up items • Will-call or cash and carry buying will be easier • Ideal world – between your home and the restaurant

  15. Vendor-Selection Criteria • Delivery Schedule • May not always have a choice as to time • Ensure that a knowledgeable person is available to receive delivery • Don’t use a purveyor who uses third-party shippers

  16. Vendor-Selection Criteria • Storage Availability • Sometimes available after a big order • Stockless purchase play – pay for the order but receive it in small amounts

  17. Vendor-Selection Criteria • Free Samples • Good for trying new products • May make some managers nervous • Super Bowl tickets aren’t “free samples”

  18. Vendor-Selection Criteria • Social Responsibility • Do manufacturer’s employees receive a living wage? • Does the vendor buy from minority- or women-owned firms?

  19. Vendor-Selection Criteria • Lead Time • Time between order and arrival of shipment • The shorter the better • Lets you make better ordering decisions • Saves you money in the long-run • Helps keep inventories at manageable level

  20. Vendor-Selection Criteria • Returns Policy • Is 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 spot

  21. Vendor-Selection Criteria • Minimum Order Requirements • Meeting the minimum order requirement • May qualify you for free delivery • May give you will-call privileges • May be more than you can do – so find another vendor

  22. Vendor-Selection Criteria • Purveyor’s Experience • Do you want to be a new purveyor’s guinea pig? • Financial stability is an issue here • Look for a good track record when seeking a vendor

  23. Vendor-Selection Criteria • Technological Capability • Accessible online? • Product availability • New products • Recipes • Current promotions • Still need face-to-face contact • Trends • Gossip

  24. Vendor-Selection Criteria • Ordering Procedures • Online is preferable • Avoid complicated ordering systems

  25. Vendor-Selection Criteria • Reciprocal Buying • “I buy from you if you buy from me” • Not a good idea • Break even arrangement at best • Often supplier will take you for granted and you will lose services

  26. Vendor-Selection Criteria • Willingness to Barter • Tradeouts • Is vendor a member of a barter group? • A $500 dinner may only cost you $200 • Food vendors don’t usually trade • Advertising account executives like these kinds of trades

  27. Vendor-Selection Criteria • Cooperation in Bid Procedures • Request for Quote • Good to shop around occasionally • Current vendor may be responsive • Current vendor may be secretive and not respond • Online systems provide information immediately

  28. Vendor-Selection Criteria • Long-term Contracts • Some vendors may not commit to long-term prices or product availability • Most vendors want large buying commitments before committing to long-term contracts

  29. Vendor-Selection Criteria • Credit Terms • Ask about • Financing • Discounts • Cash on delivery • Prompt payments • Payment in advance • Deposits for equipment and packaging • Credit Period

  30. Vendor-Selection Criteria • Cost-Plus Purchasing • Definition: purveyor’s cost plus negotiated percentage markup • Buyers have a love/hate relationship with this process • Vendors don’t like cost-plus – they take on more risk

  31. Vendor-Selection Criteria • One-Stop Shopping • Also known as: sole-source, prime-vendor, preferred-provider or single-source procurement • Easy for the purchaser • May cost more but result in labor savings

  32. Vendor-Selection Criteria • Standing Orders • Driver leaves enough product to bring you up to par stock • Typical items: dairy products, bread, soft drinks • Remember to watch the drivers

  33. Vendor-Selection Criteria • Vendor’s Consulting Support • Source of product information • Networking source • When buying equipment, vendor may help with health and/or building permits

  34. Overall Value • Value – cost of the product plus additional supplier services • Edible portion (EP) cost—servable or usable cost • As-purchased (AP) price—price of product on delivery • Better to pay higher AP if it results in lower EP

  35. Most Important Vendor-Selection Criteria • It’s really up to you • Most buyers want • Consistent product quality • Supplier services • AP price • Look for consistency, dependability, loyalty and trust

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