Top Tips for Negotiating with Restaurant Vendors

Top Tips on Working With Restaurant Vendors

Running a restaurant requires a lot of supplies and ingredients. You have to find vendors for all of your meats, produce, drinks, paper goods, and so much more. The costs for all of those goods can vary widely, so you have to be able to negotiate with vendors to get the best possible prices. Here are some tips for doing just that.

Tips on Working With Restaurant Vendors

Establish Exact Specifications

Of course, a big part of finding the best prices is comparing different vendors to one another. But beware – some vendors might compare their products to similar items that aren’t exactly the same quality or size.

Dean Small, founder and managing partner of SYNERGY Restaurant Consultants explained in a phone interview with Small Business Trends, “Say you’re buying a heavy pack of iceberg lettuce. You might be getting one quote for a pack that’s 38 pounds and one for 44 pounds. So you’ll probably pay less for that 38-pound bag, but you’re also getting less. So be very specific about all aspects of the product, from the weight to the ripeness, just to make sure you’re comparing apples to apples.”

Be Honest with All Parties

When you’re having those initial conversations with vendors, explain to them exactly what information you want and why. You don’t have to be secretive about shopping around and comparing prices with other vendors. In fact, being honest about your process might even encourage some vendors to give you a more competitive offer or some unique ways to save money.

Negotiate a Key Drop

One money-saving method that some restaurants overlook, according to Small, is a key drop delivery schedule. Some vendors will give you a better price if you allow them to make deliveries overnight rather than during prime hours. So you would need to be willing to give a key or code to a delivery service so they can place food items in your pantry or freezer and then lock up when the delivery is completed.

Go with a Less Frequent Delivery Schedule

When you’re dealing with a vendor for fresh food like produce or meat, you do need to schedule deliveries fairly regularly. But a lot of businesses schedule those deliveries a little too frequently. And they end up paying extra for it.

Small Business Deals

Small says, “A lot of operators will request delivery five days a week or sometimes even six. But that’s really not necessary unless you don’t have the storage space. And all of those deliveries cost a lot of extra money for the delivery companies — they have to generate an invoice, pick up the product, put the product on the truck, bring it to you. There are a lot of steps involved, so if you can shrink the delivery down to maybe two times per week, you could save a lot of money in the negotiations.”

Use as Few Vendors as Possible

In all likelihood, you’ll need to work with multiple vendors to source all of the ingredients and supplies your restaurant uses. But getting that number down as low as possible can help you save some money. For example, you might check with your meat vendor to see if they also offer seafood options so you don’t have to pay a separate seafood vendor to make multiple deliveries per week.

Check on Prices for Different Cuts and Sizes

It can also be beneficial to look at some of the different cuts and options that vendors offer to see if there are some money-saving options that won’t impact the quality of your dishes. For example, Small says that a lot of restaurateurs automatically choose uniform sized cuts for things like chicken breasts. But if your restaurant offers chicken pasta or salad dishes where the chicken is cut up into smaller pieces anyway, you could easily save some money by going with random sized cuts.

Make Sure Specifications Align with Your Brand Image

With meat and produce especially, there are a few different levels of quality to consider. You could pay a little more for qualifications like USDA Prime or Organic. And for some businesses, paying for that quality makes sense. But if you’re running a neighborhood diner, you probably don’t need to buy the same cuts and types of ingredients as the expensive downtown steakhouse.

Remove Unnecessary Items from Your Order

There are also some restaurants that add on too many extra items that don’t add any value for their customers. Small cited the example of lemons for things like margaritas and iced tea. While it’s a good idea to have those lemons, plenty of businesses buy premium, large sized lemons when cheaper, less expensive ones would be just fine. So if you automatically put lemons in every glass of water or put free breadsticks or pretzels out on every table, evaluate whether that’s actually necessary or if you could potentially get away with purchasing less of those items.

Look for Fixed Prices

Different vendors might also offer different pricing structures. So you should be sure you understand both the immediate price and the future price. If you can, make sure the price is locked in so you don’t run into any surprises down the road.

Put Agreements into Writing

And of course, it’s important to get those agreements in the form of written contracts. That way, if there are any disputes over prices, delivery, or any other issues, you can go back to the original agreement to be sure you’re getting what you paid for.

Photo via Shutterstock

More in: 2 Comments ▼

Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found exploring all that her home state of Michigan has to offer.

2 Reactions
  1. It is important that you are completely transparent about everything. Even business relationships are based on trust.