We negotiated for millions of dollars in purchases and almost always came on top. Uncovered strategies that can help you boost your restaurant bottom line. As I am always prepared with data before negotiations. I have meaningful conversations with the totality of the supply chain to understand what is happening in their business, their concerns, opportunities, excitements, and disappointments.
Vendor Negotiations: Boost Restaurant Bottom Line
It was so good at vendor negotiations that I developed a sense of invincibility until that faithless day last year. My counterparty was none other than ECOLAB. I gave my usual speech and asked for a discount at the end. The Rep said he would do his best to give us the discount I asked for.
I didn’t realize it at the time, but we were in a boxing ring, and in the Blue Corner was Ecolab with $15 billion in revenue.
I pride myself on finding out-of-the-box ways of unlocking savings by creating value throughout the supply chain from the manufacturer to the distributor.
The Lesson Learned: Understanding the Competition
It was different in this case, though. ECOLAB never gave me an answer. It was their way of saying no. I didn’t want to bluff or change all the dishwashing machines in our 5-state and 8-restaurant operation and switch over to Diversey. What if something went wrong? At that time, there was a 3-month waiting list for dishwashers. ECOLAB counted on me to do exactly that and were waiting for my move.
Ecolab won, and I moved on, or did I?
Aisha Tyler said, “Success is not the absence of failure: it’s the persistence through failure. Today I am going to share with you two lessons I learned since that faithless day.
- Ecolab has private labels with Sysco and Cheney. Ask your rep. You will thank me.
- Bigger fish, and this is what we did. We signed up with a purchasing network (1), and the contract with ECOLAB superseded us, giving us more than the initial discount I asked for.
If ECOLAB has $15 billion in revenue in the blue corner, our purchasing network has $25 in purchases in the red corner. Our network showed ECOLAB, who is the boss.
My network beats you, ECOLAB!
Since my practice started, providing value to restaurants to boost their bottom lines has been my primary goal. I am still working with this purchasing network to help restaurants.
(P.S: Joking aside. Ecolab is a fantastic company with great and helpful people.)
(1) Purchasing network or Group Purchasing Organization is an entity that has direct contracts with vendors of great variety and extends these contracts to members. Members benefit from the contracts by saving a great deal of money due to the sheer volume of the combined purchase volume. At Accross, we work with the largest food service GPO in the US and extend these benefits to our Partners.
Thanks for reading.
Ufuk
