Negotiate Terms with Your Food Truck Suppliers - dummies

Negotiate Terms with Your Food Truck Suppliers

By Richard Myrick

When you find a supplier or multiple suppliers who appear to fit the needs of your food truck business, you have to negotiate terms to your business relationship with them. Be sure to settle all your business terms before locking into any food supplier. Some of these terms may include the following:

  • Product prices: Negotiating product prices is part of your discussion with any supplier. The first and most obvious way to get a better price is to ask for it, yet few people do.

    Also, never accept a supplier’s first offer. If you do, you may find that extra charges begin to appear because the salesperson thinks you’ll just accept them. Start low and trade every concession for something specific that you value.

    Another avenue to follow during your negotiations is to seek other benefits than just product prices. Before narrowing the discussion down to price, find out what else the supplier may be able to do for you, such as give you extended payment terms or offer you lower delivery charges if you agree to let him deliver when it suits him.

    Although salespeople may not be able to give you additional discounts, their marketing department may be able to contribute in other ways, by providing your truck with a free branded refrigerator if you sell its brand of soda, for example. Suppliers often have a separate marketing budget and are eager to find good ways to spend it.

  • Item quantity: For the products you purchase, you want to be assured that the standards in item quantity are maintained. Provide the supplier a copy of your supply list and have him help you determine the average unit amount you need to order each week to meet your projected weekly volume.

    For example, your supplier can help you figure out whether you need to order a 50-pound sack of flour every other week to meet your baking needs.

  • Payment terms: The industry standard is to pay suppliers within 30 days or less from the time you receive your supplies, but some suppliers may offer you more flexibility, so be sure you know these terms before you sign any type of agreement.

  • Delivery schedule: Most suppliers across the country work with other companies in addition to yours, so you may need to negotiate a delivery schedule that works for both parties. Don’t schedule your weekly deliveries when your truck will be on the road. Most food truck owners choose either early morning or weekend deliveries.