This is the silly season of contracting for foodservice chains with nearly 65% of all vendor deals expiring between October and December! In today’s foodservice world you must be ready for surprises. You can’t assume the fry contract will be renewed automatically, (you didn’t accept the full $.07 lb. increase did you?) or that rib prices will remain attractive well into November (they won’t), but you can often turn a surprise into an asset.
When you are faced with a bid deadline or unreasonable price increase, and your simple strategy of asking for 30-60 day contract continuation has been rejected, here is a tactic to help you deal with the situation.
Ask for a face-to-face meeting with your sales representative and the next higher level of management and visit the supplier if you must. Let the supplier (now officially your opponent) think that you are trying to get the deal signed or the price increase approved by making statements like, “this is the best that I can do” or “to make this work, you’ll have to help me by. . .” The supplier will have the feeling of victory because you are on the run, which can make him careless, which often leads to concessions. If he offers something…take it!
When your priorities in negotiations are different than your suppliers and you don’t have the option change suppliers, then offer future concessions (planned increases, add new products to the next contract) waive a quarterly rebate or convention contribution) so you can finalize today’s deal and leave the game with some winnings. Never agree to a program which limits your future rights to walk away if business circumstances change.
To Greater Profits!
FRED
Insights takes you inside the world of professional food-service purchasing. The author prepares you for negotiation success, offering tips, tactics and strategies that guarantee bankable savings for your food service business. Never overpay again!
