4 Ways a Vendor Bid System Can Cut Food Costs
Restaurants rely heavily on their vendors for quality ingredients, cost-effective supplies and timely deliveries. A typical restaurant often deals with multiple vendors to source their food, beverage and restaurant supplies – from produce to paper goods and everything in between. While having fewer suppliers may keep things simple, more vendors means less dependence and the freedom to shop around and to negotiate.
Read on to learn more about how to turn the tables of your vendor relationships.
What is a vendor bid system for restaurants?
The idea is simple enough: Get vendors to compete against each other and pay less for the food you purchase. Before restaurant management technology made it much easier, creating a vendor bid system took a Herculean effort. Chefs or managers had to scour the landscape for new food vendors, establish the relationship, and vet the quality and timeliness of your delivery. Subsequently, you would need to solicit, aggregate and evaluate the bids…likely in a spreadsheet and on an ongoing basis.
With technology like xtraCHEF, you can let the vendors come to you. Once you’ve sourced a few vendors, all of the purchase data will be readily available at your fingertips. Survey your most frequently purchased items to decide what to target for competitive bids. From there, you can import your bids directly to xtraCHEF prior to placing an order.
In an industry where restaurants can pay wildly different prices for the same items on the same day from the same vendor, getting some fresh eyes on competitive bids from new and existing vendors can quickly become a profitable endeavor.
4 Ways to Cut Food Costs with a Vendor Bid System
Here are four ways that having a vendor bid system in place allows restaurant operators to cut costs:
Compare the Same Item Across Vendors. Sourcing bids from multiple vendors allows you to find the best price on a given item. Why buy broccoli from the same vendor just because you’ve been doing it for years? By comparison shopping, you might just find a vendor who offers it cheaper (or have the peace of mind in knowing that your existing vendor has been giving you a great deal all along).
Compare Similar or Substitute Items Across Vendors. Buying a very specific item from a vendor? Don’t let that stop you from shopping around. Source bids on similar or substitute items and you may be amazed by the saving potential.
Get Ahead of Price Creep. Without the help of a tracking tool, the price of an item can increase for weeks or months unnoticed. A system like xtraCHEF helps you to recognize trends and negotiate for contract pricing on items that are likely to be impacted by market conditions (avocados, anyone?).
Keep Vendors Honest. Stay on top of your vendors to keep them from getting comfy with your business and boosting your prices or fees. Soliciting competitive bids gives you leverage with your existing vendors to make sure you’re always getting the best deal.
Leveraging data in your vendor relationships is the best way to manage food costs and ensure that you’re never overpaying.