Bulk olive oil is, in essence, a commodity item. This means that the global market price fluctuates on a daily basis and is largely dependent on the supply of olive oil available in the world.
Bulk olive oil is, in essence, a commodity item. This means that the global market price fluctuates on a daily basis and is largely dependent on the supply of olive oil available in the world.
Buying oil in larger order quantities will reduce both the cost of the oil and the freight. What’s a larger quantity? For this discussion, we’ll look at orders of 6-20 pallets.
Transportation costs for bulk olive oil can range anywhere from $75 (across town) to $600 (across the country) per pallet. Think about where your olive oil will be shipping from (also known as the FOB point) when you’re determining a delivered cost.
The first question that you may have as you research bulk olive oil is, “How much does bulk olive oil cost?” This is a more complex question than it may seem, because there are many factors that can affect the cost of olive oil.
A pallet of bulk olive oil costs between $2,000-$6,000. A 20 ft. Container with 20 pallets of bulk olive oil costs between $30,000 and $90,000.
Continue ReadingCentra Foods receives questions from hundreds of manufacturers each year on the best ways to save money on olive oil. Research and Development typically specifies a particular “spec” for the oil desired, and it is up to the operations and purchasing teams to figure out how they can save money on other pricing factors involved.
We have found that some of the biggest factors that can increase the price of olive oil are actually logistics related.
At Centra Foods, we receive many inquiries from soap makers large and small around the country. Their questions and goals are often the same: they’re looking to reduce the cost of ingredients, including the olive oil they use. Our advice varies, depending on the grade of oil preferred, the volumes needed, and the other ingredients required.
If you’re a U.S. manufacturer, you’ve probably received your bulk olive oil in one of two ways:
from a U.S.-based company who ships oil to you by the pallet, or
from an overseas supplier who ships oil to you in a full container
There are pros and cons to each of these systems.
The first question that you may have as you research bulk olive oil is, “What is the price of bulk olive oil?”. This is a more complex question than it may seem, because there are many factors that can affect pricing.
The price of a pallet of bulk olive oil is between $2,000-$6,000. The price of a 20 ft. Container with 20 pallets of bulk olive oil is between $30,000 and $90,000.
Bulk olive oil is, in essence, a commodity item. This means that the global market price fluctuates on a daily basis and is largely dependent on the supply of olive oil available in the world.
As a first-time bulk olive oil buyer, you may find that the quotes you receive don’t include the cost of shipping. In the bulk sector, this is a common thing for suppliers to leave out of your initial price quote. If you’re not used to the ‘bulk buying world’ that can be frustrating. Here are some of the reasons why it’s initially left out:
Most manufacturers buy their bulk olive oil in totes or drums that deliver a few pallets at a time. For large manufacturers that use a lot of volume, it is worthwhile to consider a larger bulk size that can save you even more money.
You can significantly cut down on the cost of your olive oil by receiving it in a flexitank or tanker. This means that a truck would deliver to your facility with about 6,000 gallons of olive oil. This oil is pumped into a “silo” or “storage tank”, located at your facility. The question is, how do you know when it’s right to make the switch from totes to flexitanks/tankers?
A “direct delivery” (also known as a container shipment) is when a truckload of olive oil is delivered to you direct from the manufacturing site in the Mediterranean. The cost of delivery is included, and the oil is often cheaper because you receive volume discounts.
A price for bulk olive oil can be quoted ‘F.O.B.’ or ‘Delivered’. Have you ever wondered what those terms mean? A clear understanding is very important to allow you to to do accurate cost comparisons.
F.O.B. stands for “Freight on Board” or “Free on Board” depending on who you ask. This term indicates who pays the transportation costs.
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