6 Questions Every F&B Owner Needs To Ask Their Suppliers
Updated: Mar 20, 2020
When Sukhvin was working in franchise consulting in Australia, he was in charge of a new store opening in the countryside. However, shortly before the opening, the franchisee realised that he had forgotten to order a few crucial items.
The nearest suppliers were 300 kilometers away.
Even almost 10 years later, Sukhvin would never forget what happened next. “After some desperate phone calls, a supplier finally agreed to personally drive down all the way to our site location to ensure a smooth store opening for us,” he said.
It was thanks to strong supplier relationships that a crisis was averted.
This is why Sukhvin, now the Operations Director of Riverwalk Tandoor, believes strongly in building trusted partnerships with suppliers in Singapore.
With 18 years of F&B experience under his belt - including a decade in franchise consulting abroad - he shares his insights on building up a strong supplier network for F&B operators.
Why are suppliers important?
A strong supplier network plays a key role behind-the-scenes in helping F&B businesses maintain competitive advantage and offer great customer experiences.
This also includes non-food related suppliers, such as landlords, electricity and utility companies, garbage collectors, or any other companies that are engaged for goods and services.
“It’s important to have a good relationship with your landlord especially, which will play a big part in rent negotiations or increases,” Sukhvin says.
6 important questions a business owner should ask when selecting a supplier
1. Is the supplier a reputable and decent-sized company?
While small suppliers may provide great service, those that are too small may not be able to provide a customer with all requirements. This means that certain products are outsourced, which might not be cost beneficial.
“I prefer a one-stop shop supplier as I can have more buying power or negotiate better terms and prices,” says Sukhvin. “But avoid relying on one single supplier in case of unforeseen circumstances.”
2. What is my budget?
“Price is not the only factor. You want to have a balance between price and quality,” says Sukhvin.
Businesses that squeeze suppliers for short term cost savings lose out in the long term. If suppliers feel shortchanged, they may try to right the equation by lowering the quality of products or services - all of which will harm your business.
Research on market prices, formulate a budget, and use it to compare supplier quotes - keeping in mind other factors such as quality and service.
3. Can the supplier provide deliveries on a regular and non-regular basis?
Work out with your supplier the regularity of the deliveries to avoid any unpleasant surprises. If your company organises events, flexibility for times is important, as well as the ability to deliver on weekends when required.
4. Is the supplier HACCP Certified?
HACCP Certification is essential because it proves that suppliers are compliant with the highest product quality and food safety management standards.
“HACCP is a must as we are going for our ISO 22000 Certification, an international standard for food safety management,” says Sukhvin. HACCP is a prerequisite for ISO 220000.
5. Are the payment terms agreeable?
From a business cash flow perspective, you need to have payment options such as 30 or 60 days, says Sukhvin. Sometimes due to accounting reasons, businesses may also need to change payment terms for specific transactions.
6. Is the supplier flexible?
As F&B is such a dynamic industry, it is essential for businesses to have a flexible arrangement with suppliers. This includes not only payments and deliveries, but also the ability to return or reject products.
Conclusion: build long term relationships, not exploit short term gains
At the end of the day, suppliers are a key stakeholder in your F&B business.
“Treat your suppliers like how you treat your customers. Having a good relationship with your supplier goes a long way,” Sukhvin says.
“After all, good suppliers are like good customers. You need to sell them your value proposition and prove that your company has big buying power.”