8 Things You Should Know About Your F&B Supply Business

As I write this, I’ve long since hung up the saddle and stepped away from my role helping grow Dyspatchr to take the reins at OrderEZ full-time. I still recall what a wild ride it was navigating the distribution business, not to mention the struggles along the way which ultimately led us to decide that it was easier to build OrderEZ from scratch than navigate the existing obstacle course of underwhelming solutions available on the market. If I sound like I’ve got a bit of a chip on my shoulder when it comes to my time in the trenches, it’s sort of because I do.

I speak from experience when I say, I’ve seen the light, and things don’t have to be this hard! - Too often we accept unacceptable systematic inefficiencies because we can’t see a clear way to improve them. “It’s good enough” has never made anyone feel good when describing their business - right? If it sounds like an earful, just imagine going through that over and over in your head daily and wishing there was a better way of doing things. I did until I realized I had to build an answer to that voice in my head or I’d never truly shut it up. Hence the organic, frustration-fueled, need-driven birth of our pride and joy - OrderEZ. Work in food and beverage is tough enough, there has to be a way to make things easy right? You can see how we got the name. Knowing this frustration is undoubtedly a shared one, and wanting to help distributors, wholesalers, and importers seeking a framework for how to “get their head in the game”, this is a starting point for how to look at your business in the hopes that it helps you like it helped me.

#1 What’s the Status on Past and Present Orders?
‍This one’s a no-brainer; if you can’t tell whether an order is processed, shipped, or delivered near-instantly, then you’re in for a world of unnecessary hassle and headache. In an industry built on  hospitality, it goes beyond saying that reputation is key. For new and growing operators, this is even more important. If you’re unable to inform outlets when to expect orders (or worse, unsure of if/when they’ll arrive) you risk damaging a relationship and hindering your growth potential. In short, you’re cooking up a recipe for disaster.

At the risk of this starting off like an OrderEZ infomercial, I’ll start by saying we do all this and more, but that shouldn’t be the only takeaway. Whenever asked, “Where’s my order?” it’s not only nice to be able to answer promptly, it’s good business. In 2012, Netflix introduced the concept of “chaos engineering”, or trying to break parts of their process in order to ensure its stability. Similarly, look at your internal processes and see if they hold up - “What if so and so takes a day off?”, “What if it’s during off-hours?”, “What if I have to answer and I’m not at my desk?” These are good questions to ask. 

#2 Where are you dropping the ball?

At some point you’re going to drop the ball - it’s just going to happen. Between sampling possible portfolio products (aka “the fun part”) to overseeing sales rep performance, there’s an abundance of things to pay attention to and a deficiency of time and willingness to dig into the minute details when you’re stressed with managing everything else. If you’re reading this hunched over a desk surrounded by colored bottles you wish you were sampling with an ominous clutter of paperwork at your side - it’s okay to admit pouring over Excel sheets isn’t your favorite. Hey, this is a safe space.

The answer here is systems. You have to have a systematic way to track the numbers that matter - inventory in, inventory out, expenses,  ROI, margin, sales efficiency, etc. - there is a lot to keep track of, so ensuring you’re documenting this, establishing benchmarks, tracking shifts in numbers, and maintaining a close eye on all your metrics that matter. As you document these, remember that numbers can only show you a top-down view, you’ll have to get your hands dirty as well. Take some calculated dives through sales team performance, how profitable a product really is (not your list price, your actual sales price!); who are my most profitable customers (not just the biggest) and when you turn over rocks you usually find bugs, and this is a great way to discover potential areas for improvement.

#3 Which accounts aren’t meeting their full potential?

The hardest part of the business is getting new accounts. The second hardest part is figuring out what to do with them after you’ve got them. Great, you’ve sealed the deal! - Then what? A client-distributor  relationship is like watering a bonsai, it needs to be carefully monitored, cultivated, and cultured. When you do it right, it’s a marvelous thing to behold. Don’t go to bed with “what ifs” on your mind, wondering about what deals never happened or if a client switched vendors because you didn’t reach out to see if you could be doing more.

Lagging stock purchases or expanding outlet locations are both equally important to pay attention to. Regularly checking in with your clients is like watering the bonsai, something that must be done consistently and with great care. In uncertain times, waning purchases can indicate a need for some TLC. With luck, you’ll find your efforts rewarding you with opportunities as outlets expand, talk about a win-win.

#4 What’s Your True Profit Margin Per Account?

Food and beverage is a fun business, really, isn’t it awesome? The mix of work and play can sometimes skew too heavily on the play side when it comes to wining-and-dining clientele. We’ve all done it before, ordering one too many on the company tab, an easy mistake, especially when delicious spirits are involved. Okay, maybe you and I’ve never done it, but let’s wink and nod and move on.

Without the benefit of proper tracking, it can be hard to objectively tell the difference between harmless indulgence and ROI-diminishing issues. Develop a system for checking and tracking expenses, weighed against the profit each account brings in, to get a vital perspective on how your business is running. 

#5 What products sell the best, and where?

Knowing what your best moving products are is great, knowing where they’re moving the most is better. While I can speak to deals won over the strength of good reporting and the allure of future success, really, the more immediate wins are in the business clarity you get.

Knowing which businesses consume specific offerings helps you plan for purchasing and warehousing, helps you identify product-market fit, and even helps you potentially facilitate collaborations or themed events in response to market demand. Sometimes data can be fun. Huh. 

#6 What are the numbers looking like?

As we’ve just covered, it’s important for you to know where your product is moving - in the case of those distributing for portfolio brands, they’ll want to know that info too. Seriously.

As you scale, you’ll have to be increasingly sensitive to the fact that when you’re attempting to either represent an existing major brand or bring a major brand to a new market. These generally aren’t just casual decisions; performance numbers will be reviewed at quarterly meetings and peered over-enthusiastically by analysts. Rather than represent a black box in the equation - or worse, a blocker in the progression towards transparency, why not make it easy to share those numbers from the beginning? It’s far easier to set up a system to manage and track this data from the beginning than playing catch up later down the line. We know what happens when you try and play catch up, something about a hungry bird that overslept dreaming of worms. Get it right as early as possible and you’ll be thanking yourself later. Trust me.

#7 How much inventory do you have? How much is in which warehouse?

Tracking inventory and warehousing is like an umbrella during a rainstorm, it’s one of those things that when it’s going right you never notice, but when it goes wrong you notice. Hard.

There’s a trend here, keep track early to avoid headaches later. A good salesperson will naturally try to move as much of a popular spirit as possible. That’s fantastic news!... Except for when thanks to other good salespeople you’re currently out of stock. With the importance of reputation in mind and considerations on potential business impact, it’s a bad move to be overcommitted stock that cannot be delivered. The ultimate disappointment is having to call an outlet and let them know you can’t provide what you promised, only to find it’s something they’ve featured on their menus. Ouch. Don’t let yourself get caught in this position. Seriously.

#8 Where are the opportunities for improvement? 

Understandably, improvement is hard without a guide to get you there. At OrderEZ, the simplest way we help distributors identify where growth opportunities are is by categorizing businesses into two action-based groupings - ordering or not ordering. If a business ordered from you that month, they’re in the “ordering” category, if they didn’t, they’re in “not ordering”. As you can see, OrderEZ is built around the idea of not overthinking things.

Regardless of whichever system you use to keep track of things, you definitely want to make sure you are keeping a running tracker of outlets and orders. If an outlet signed on at the beginning of the month but hasn’t placed their first order mid-month? Could warrant a call! Has one of your early clients failed to order from you for a full month? Maybe a stop-in is a good idea. A running tracker helps ensure your business is best equipped to engage these opportunities in real-time, as they say, time is money. 

This reflection on the opportunities for growth, and the importance of tracking the right data and displaying it in an understandable way reminds me of why I got into this to begin with. I’ve worked hand in hand with so many hard-working professionals that deserve less stressful days, or more weekends, or a framework to be the most effective in their positions. While we created OrderEZ as the answer to all these questions, you’re free to come up with your own answer. What can be said though, is that with a good foundation, you’re working towards the path to winning; and as a gourmand, that means we all win.