First, most pricing in the foodservice distribution business is not fixed or tied to any fixed price or margin. A price quote is usually only good at the moment in time it is prepared or for a week or month based on the suppliers ability to maintain pricing systems for a specific customer account. Most have this ability or at least the ability to determine the last price quoted or paid by a customer. Unless you have a written agreement signed by an executive officer of the food supplier that clearly states the pricing you will pay (and this is rare unless your buying over $2500 per week) then your pricing is subject to change at any time.

In the non-contract business world of distribution there are many other ways to secure a pricing relationship that is fair and reasonably predictable. This is completely based on your account type, service structure, and the specific suppliers for which you are making purchases. Having lots of suppliers call on you and then cherry picking the lowest price only works if:

1. Your time can not be better allocated with other critical foodservice management activities.
2. You only have a dozen key critical items for which pricing has a major food cost impact
3. Specific product, brand, and manufacturer / overall product consistency is of no concern to your operation.

About 20% of foodservice customers fall into the above category. They are rarely the types of businesses that maintain a long term profitable restaurant. Independent pizza, burger, and other fast food operations that do not rely heavily on return customers from their local market (ie. they have heavy one time or tourist type business) can sometimes make the cherry picking model work.

For everyone else, it's much better to have a strategy, checks and balances system, and an open and honest relationship with your suppliers. More suppliers does not mean better pricing. It just means there are that many more vendors that must find a way to reach their Gross Profit per delivery minimums to continue servicing your account. Again, distributors will never continue to service an account they are breaking even or loosing money to service. Sure, they will give you the best price on your Prime Rib, and they make up for that net $10 line item loss on your case of foil containers (guess aluminum pricing just went up…)

If you are a very small operation and you can give all your business to a few or one core supplier you'll probably fair better than the time and expense of trying the cherry picking model of purchasing. Get a monthly price list for EVERYTHING you purchase, compare your invoiced prices on EVERY delivery, and ask your DSR to advise whenever a price increase or decrease occurs over/under $1 per case. Keep every month price list to perform year over year comparisons and at least once a quarter have a competitor provide you a quote for the full business package. Remember, the new paper supplier that promises to beat your broadliner paper category pricing by a net $20 per case just means that the broadliner will seek recovery of that lost Gross Profit on other items. Using your monthly pricing quote comparisons (and yes prices will always change) you’ll be able to insure your distributor is not increasing margins.

For larger operations there are a number of other necessary checks and pricing agreement strategies. And in the end, price never equates to costs. Always look at value the distributor has to offer and put a fair valuation on the overall service relationship. If a distributor is taking great care of your account (representation, customer service, delivery personnel, order fill rate, operation profit consulting, emergency response, etc.) and is 3-5% higher than everyone else in the market, they’re probably the best bet in town.