When partnering with a broadline foodservice distributor, manufacturers face a variety of costs that can impact their bottom line. From Purchasing Allowances (PA’s) and Lumper Fees to Marketing Support and Warehouse Slotting Fees, understanding these expenses is crucial for effective planning and negotiation.
Herea are considerations for different potential costs:
Purchasing Allowances may go by many different names, depending on your distributor: PA’s, Rebates, Earned Income and more. Understand how your allowances will be used. Expect some will end up as income for the distributor, but much of the allowance should be used to create sales.
Marketing Support: Maximize the impact of your sales promotions.
GDSN Compliance: Providing high-resolution images along with accurate & useful product data.
Sample Management: Efficiently handle seller and customer samples.
Training and Education: Offer tailored training sessions and videos.
Event Participation: Coordinate food shows, golf outings, and customer trips. Some of these events are meant to be fun, but remember to cultivate relationships and opportunities.
Private Label Products: Costs come with packaging commercialization and artwork. Understand who pays for plate development, etc.
Service Level and Freight Management: Minimize lost revenue due to shortages and service level issues.
Warehouse Slotting: Some DCs charge local slotting fees. A distributor’s delivery appointment process may have some less obvious costs around wait times, etc.
Billback and deductions may have additional labor costs on the manufacturer’s side. Make sure you clear up issues QUICKLY, so you can make sure you are only paying what you should. I’ve seen laziness around deductions cost manufacturers thousands of dollars.
By partnering with Grow Foodservice, you can confidently approach distributor sales calls, knowing you have a team of experts supporting you every step of the way. Let’s work together to optimize your distributor relationships and drive your business forward.
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