How To for Manufacturers: Save Money on Olive Oil by Buying “Direct”

If you’re a U.S. manufacturer, you’ve probably received your bulk olive oil in one of two ways:

1. from a U.S.-based company who ships oil to you by the pallet, or

2. from an overseas supplier who ships oil to you in a full container

There are pros and cons to each of these systems.  By working with a US-based company, you have peace of mind knowing that you’re working with domestic supplier in your own currency, with no language barriers.  The oil is shipped to you from a US warehouse, meaning what you pay for the oil includes cost of shipping on a freight carrier (averages $150-$400 per pallet), and any additional overhead (warehousing, staff, etc).

If you’re working directly with a manufacturer in the Mediterranean, you will receive your oil in large quantities, a minimum of 20 pallets per delivery.  You may struggle to receive the documentation for Quality Control, because U.S.D.A and US QA requirements are much more rigorous than anywhere else in the world.  You may also have difficulty communicating, or experience unreliable suppliers who disappear quickly if something goes wrong.  You will, however, be getting the best price by shipping direct to avoid domestic freight costs.

A note to olive oil buyers: there is a better way.  You can enjoy the benefits from each of these systems in one simple, efficient delivery method.  You can purchase a container from your U.S. Olive Oil Supplier (like Centra Foods),  to be delivered direct to you from the Mediterranean.  Your Olive Oil will ship direct to you, and bypass a suppliers packing/storage facility.

You save money by buying in bulk, reducing built-in overhead costs (no domestic warehousing), and avoiding pallet freight costs. You can communicate easily, get the QA paperwork you need and be confident you are working with a dependable supplier.  On average, this direct delivery system saves $0.15-0.55 /Lb. on delivered oil costs.

As you’re considering this new system for your business, keep the following in mind:

1. Warehouse Space: you need warehousing space to hold 20+ pallets or a 50,000 Lb. storage tank

2. Oil Use: you need to use enough oil; a pallet a week is a good measure

3. Financial Impact: Financially, your purchases will be larger, but less frequent.

Want more information?   Contact Centra Foods for feedback from other businesses who’ve switched to this more efficient delivery system and are saving $$$!