A prime vendor is a medium through which the restauranteurs can procure all their needs at one place. A prime vendor may be a vendor micromanaging different small vendors or it can be a medium such as e-commerce websites like supplynote.
According to a recent research, a large portion of raw material from one prime supplier is much more common in more highly profitable restaurants as compared to restaurants with low profitability.
In most cases consolidating the majority of purchases with one supplier tend to offer the opportunity to lower ‘overall’ food prices and costs. Here the concepts of one stop shop solution come as a remedy.
The benefits are not only limited to the cost side. Following are the positive side effects as complementary:
Less time spent on purchasing activities:
Owners have told us they were spending several hours a week comparing bids and were able to cut their purchasing time to virtually nothing by going to prime vendor.
Fewer people and paperwork to deal with:
Instead of getting lots of small deliveries from multiple sales reps prime vendor results in fewer large deliveries leads to less time receiving and restocking activities. This translates to more efficient supply chain and ultimately reduces costs and complications.
Better vendor service:
Sales representatives always push themselves to go for an extra mile to entertain special requests in terms of any customised request, meeting deadlines and providing best offers while servicing it to their regular customers comparatively to the smaller/infrequent customers.
Improved product consistency:
Food products, disposals and some miscellaneous services are obtained from the same supplier over and over again lead to greater consistency and better quality products.
Easier to order electronically:
When purchases are consolidated with one primary supplier it’s easier and more practical to order online. Virtually every operator engaged in online ordering tells me it is extremely efficient and convenient.
Prime vendor arrangements can be structured in many ways, but currently, they operate on a cost-plus basis. Suppliers agree to sell their products for a fixed percentage or Rupees markup their cost for a certain amount of time depending on the contract.
Many of the restaurants even claim that prime vendor purchasing and their close relationship with their main supplier is one of the primary reasons for their success.