Pros and Cons of Using One Supplier vs. Multiple Suppliers: Which is Better?
Restaurant owners know well that when it comes to purchasing ingredients, seasonings, or kitchenware, it is very convenient to order from a supplier. You don’t have to go out and find them yourself or go to the market yourself, saving time and making it easier to control the quality of the basics. Some restaurants order from one supplier, while others order from many. So which is better?
Let's look at the advantages and disadvantages that entrepreneurs need to know so that they are not at a disadvantage and can find the right supplier for us. What kind does your shop use? Let's share. Compare using a single supplier Compare using a single supplier strength
Convenient in contacting and ordering. Have you ever had to find a phone number, a LINE account, a business card, or even a member number when you want to buy something? And buying from multiple suppliers is even more complicated. Normally, if we order vegetables from one supplier, or meat from another, this is not a big deal. But if we order from different suppliers, last month we ordered supplier A, last month we ordered supplier B, this is very confusing. It is not as good as ordering from one supplier. This is more convenient, and the supplier may remember what we ordered and where we sent it, making it easier to talk.
Negotiable price: The words “regular customer” and “long-term business partner” often come with special privileges because suppliers themselves want to keep their customers for a long time. Therefore, if there is a price negotiation or a bonus, it is usually easier to talk to them than with other customers. Or even during times when there is a cash flow problem, some suppliers may agree to give credit first and pay later.
There is no minimum order. This is one of the privileges of regular customers. Normally, if the order does not reach the specified amount, there will be an additional shipping fee. However, in the case of regular customers, you may request to negotiate this part from time to time. Sometimes, the raw materials in the store are not exhausted, but are simply depleted and not enough to sell in the next round. In this case, you can negotiate with the supplier about how much to buy this round. It does not have to be the minimum amount because in the long run, the store will be a regular customer who orders raw materials anyway, especially stores with long-term sales contracts and set a delivery quantity for each round.
weakness
There are not many choices of ingredients because when we buy ingredients from the same shop, we usually get the same things, which are ingredients that the supplier has, and the supplier does not have every type of ingredient for us to choose from, just like a supermarket that does not have every brand of soy sauce for us to choose from. This means that we do not have the opportunity to compare both the price and quality of each ingredient, which is important because we should choose ingredients that have the most suitable quality and price for our restaurant's food.
There is no opportunity to compare prices with others. It is normal if we have ordered from the same supplier for a long time, so we do not compare prices with others. In this case, the supplier also has sales strategies to block the opportunity for us to buy from other suppliers, such as calling to stimulate, calling to sell before the product runs out, or giving a cash discount in case of ordering more. This point may seem like nothing at first glance, but what if one day we find that there are other suppliers selling raw materials cheaper than ours?
There are many options for ingredients because each company has different management of ingredients. Therefore, the quality will be different. Having many suppliers will allow us to choose ingredients that meet our needs more. For example, if it is sliced pork, the thickness of the pork from each company is usually not the same. Or trimmed chicken, each company has a different method of trimming, resulting in different sizes of each part of the meat. We can choose the one that suits our use.
Diversify your supplier management risks. What if our sole supplier suddenly fails to deliver the product on the day we run out of raw materials, or raises the price without prior notice, or suddenly goes out of business, etc.? These are all risks that can occur. If there is no backup supplier, our store will definitely be affected.
There is price competition from suppliers, giving us the opportunity to get a low price. Of course, with products of the same quality and service, competing stores must compete on price or provide special promotions to entice customers as much as possible. And this is where we have the opportunity to get a satisfactory price or an offer that benefits us the most.
weakness
Attention depends on the amount of the store's orders. The term "big customers", ordering a lot of products, is naturally more satisfactory to suppliers than small customers because the profit from each sale is more attractive. On the other hand, regular customers, even though sometimes they do not order a lot of products, keep ordering for a long time and make a long-term profit. Therefore, if we choose to buy products from that supplier and then this supplier, not continuously and do not really buy a lot, we have to accept this.
There is a minimum order per round. If you are not the one who orders continuously, the shop may have to add shipping costs or sell in large quantities to cover the cost of shipping. Many shops choose not to ship items to customers if they do not buy enough because the profit is not worth the selling price. Therefore, if we order ingredients from many sellers, intending to order in small quantities and combine them, be careful not to run into problems with the minimum order per round.
