Hidden Costs from Your Food Suppliers You Might Be Missing
Beyond the unit price, there are hidden costs that inflate your real procurement spend. Learn what to look for and how to avoid overpaying.
The True Cost of Procurement
When comparing suppliers, most restaurants look at the price per unit on the invoice. But the real cost includes much more. Understanding hidden costs can save you thousands per year.
1. Delivery Charges
Some suppliers offer free delivery above a minimum order, while others charge flat fees or per-drop rates. A supplier with slightly higher product prices but free delivery might actually be cheaper overall.
2. Minimum Order Requirements
Being forced to order €500 minimum when you only need €300 worth of products means either over-ordering (leading to waste) or buying unnecessary items. Calculate the true cost of minimum order requirements.
3. Quiet Price Increases
Suppliers regularly increase prices without formal notification. A product that cost €4.50 last month might quietly become €4.85 this month. Without systematic price tracking, these increases go unnoticed for months. SupplierScan catches these automatically.
4. Unit Size Changes
Watch for shrinkflation: same price, smaller package. If your 5kg bag of flour becomes 4.5kg at the same price, that's an 11% price increase disguised as a packaging change.
5. Quality Inconsistency
If Supplier A's chicken breasts average 180g but Supplier B's average 220g at the same per-kilo price, you might think they're equal. But if your recipes assume 200g portions, Supplier A's smaller pieces mean more waste from trimming or inconsistent portions.
6. Payment Term Costs
Paying on delivery (COD) vs. net-30 affects your cash flow. If a supplier offers 2% discount for early payment, calculate whether that discount exceeds your cost of capital.
7. Return and Credit Policies
When products arrive damaged or below quality, how easy is it to get a credit? Some suppliers make this painless; others make it so difficult that most restaurants don't bother claiming.
How to Track True Costs
Build a simple scorecard for each supplier that includes: unit prices, delivery costs, payment terms, quality consistency, credit handling, and order flexibility. Compare suppliers on total value, not just price tags.