Buying in bulk has always been thought to save money. Buy more volume and bigger packaging and save more money. That’s true, BUT, to be able to buy in bulk, a whole bunch of conditions need to be met on your business side of things to have the decision make sense.
On the flip side, there are plenty of times when a small business or restaurant shouldn’t buy from a bulk supplier. If your business sounds similar to the factors below, you should actually stick with your local distributor or food service provider.
To give you a bit of faith in these answer, we realize that in sharing this, we are actually pushing business away. But, we’d like to share real education that will help you run your business smarter and get solid answers. So we opt to share!
You Have Limited Storage Space
Most restaurants weren’t meant to hold pallets of ingredients in the back. Raither, the kitchens been set up to hold a few cases of this and a few cases of that. The point is to have enough ingredients to get you through to next week— not next year.
If you can only buy and store a few cases of oil at a time, definitely opt to work with a food service distributor.
Food Service Distributors were made to serve small businesses and restaurants. They’ll take care of the storage for you, so that you only bring in what you need now.
You Have A Challenging Layout
Distributors bring in your items by the case and often wheel them into the kitchen for you. All you have to do is put the items away. Super convenient, right?
Keep in mind that a bulk delivery comes on a 40” x 48” or a 48” x 48” pallet. The oil is stacked 4-5 feet high, and if you choose some of the larger sizes like drums, they weigh about 500 pounds each. Ask yourself before buying, how are you going to move it around?
If your location has stairs, narrow door frames or limited indoor storage, think again. If this is the case, you’ll either only want to look at a pallet of the 35 Lb. Containers that can be separated and stacked individually, or circle back to your food service distributor.
Your Limited Financial Capitol Is Better Spent Elsewhere
The minimum order from a bulk supplier is typically 1 pallet of edible oil. This ranges between 220 to 330 gallons of oil, and typically costs between $2,000 - $7,000 depending on what type of oil you buy.
If you could save $500 on buying the oil in bulk, is that worth it? While you will save money over a distributor, you will be sitting on inventory for a while that is tying up your financial capitol. You’ll just have to decide which option is smarter for your business.
You Buy Lots Of Other Food Ingredients
There is a positive when you’re working with distributors. They carry lots of different items, so if you buy 100 different ingredients, they can supply all of them. A bulk distributor often only specializes in one sector, like oils or flours.
Yes, a food service distributor might have a price that is slightly higher than a bulk supplier. But, you only have to buy a few cases of each item and you can have them all shipped together in one delivery.
Often times, this still equals a lower total delivered cost per item which saves you money in the long run.
You Only Use A Little Bit
If you’re only using a little bit of oil, don’t switch to a bulk supplier. You won’t be able to use it before it’s “best by” date and it will tie up too much of your capitol.
Well, what’s a little? The magic number that we’ve found is 30 gallons. If you’re using less than 30 gallons, stick with your food service distributor. If you’re using more than 30 gallons a month, it’s time to get a price quote and see if working with a bulk supplier makes sense.
Time to get a quote from a bulk supplier? Request it here.
Key Takeaways
This rationale applies no matter what ingredient you’re looking at. All different kinds of factors in your business are affected by how you buy, so before you try to simply “save money by going bulk” you’ll need to understand all the affects on your business.
Food service distributors evolved to help serve restaurants and small businesses. Even though their per item cost may be more expensive on first glance, their delivered costs can be equal to that of a bulk supplier depending on how large they are and how much you buy. Even still, there are some business aspects that you should keep in mind.
Overall, food service distributors are ideal for businesses that:
- Have limited storage space
- Have a challenging storage layout for bulk
- Don’t want to spend $2-7,000 on one ingredient at one time
- Use lots of different types of food ingredients
- Only use a few cases of edible oil each month
Topics: Small Businesses Advice
