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Why It Might be a Good Idea to Buy a Food distribution business
The next time you see an ad for a Food distribution business for Sale, you might want to stop and think about it for a moment before passing away or scrolling up through the web page. What do your favorite Restaurants and your local supermarkets have in common?... They both purchase from a wholesale food distributor, These distributors can sell anything from fresh T-bone steaks to cases of eggs. Bigger establishments rely on wholesale distribution because they can have bulk orders delivered, and they can keep their business running smoothly by making sure fridges are well stocked and customers are happy. Getting into food distribution is a profitable venture but it’s not a simple hustle. It requires heavy lifting, taking orders, and starting early. It's important to try to finish your route before a certain time because most customers require their order before noon and some want it as early as 5 am! But the good news is In this article, we are about to discuss why it will be a good investment to buy a Food Route.
What exactly is a Food Route?
A Food Route distributor is a specific territory or course on which a food product is supplied to the assigned shops and stores. It acts just like a delivery or provision route, just the nature of the goods being delivered is different. Owning one of these can prove to be a very profitable independent business. You will be picking up the food products from the supplier and delivering them to the food stores within your route. Many companies like Boar’s Head and US Foods, have a widespread distribution business and independent route owners working with them can earn a pretty fair commission. Here are 6 types of whole food products you can:
1. provision of meat
5. canned foods
6. dairy products
How big is the whole food market?
The wholesale food distribution business is huge! It's a multi-billion dollar industry that continues to grow each year. There are so many different types of businesses involved in the distribution of food, from small mom-and-pop shops to large national distributors. So, what is the wholesale food distribution business all about? And how can you get involved? Keep reading to find out…besides the point that the wholesale food distribution business is an over $500 billion industry, There are still plenty of opportunities for entrepreneurs who want to get their start in this lucrative market. Companies like Sysco and US foods are big but you can eat too! So what exactly is wholesale food distribution, and what does it involve? Keep reading to find out.
What kind of work is required?
With my research conducted it does take some work it is not a simple business to run but if you have what it takes and are ready to roll up your sleeves it's a promising venture that can make you some money, I will list below the steps that required to run a successful a food distribution business based on my research conducted on a day to day basis
1. Customer management-Here is the part where you are taking orders from customers, this may be done in 2 ways.. in-person orders usually make orders bigger because business owners are there fully focused on you and you can remind them of certain stuff and specials you may have to go the bad part about that its very time consuming, driving from customer to customer will eat up time until you scale and can hire a sales force to go take orders that will be beneficial for you, the customers and the reps.
2. Getting orders ready to your supplier/vendor- Now that orders are all taken you will need to submit them to your wholesaler or food center you might be dealing with one, two, or even more suppliers depending on who has what, that's how you will send out your purchase orders. This is done in 2 ways via phone or fax.
3. stocking trucks- This is the part that will build those muscles up organizing your purchase orders is very crucial I repeat crucial, not being organized can have some bad setbacks like misplacing items for customers because it’s hidden in the back of the orders and you didn't see it, That's a sale lost and a customer disappointed. Second time management, getting orders out efficiently will not only get you home faster but will allow you to determine whether or not you can add more customers to your route…adding one or two more clients weekly can increase your sales up to an extra $3000-$7500 a week, not bad right?
4. Delivering inventory - once yours all are set up in the order you can start your route and start delivering now depending on how you set it up you can either have customers sign off the order and collect later or you can collect when items are delivered. Once food distribution businesses build a relationship with their customer they have them sign off and they head out, this helps them finish a route quicker.
5. Collecting balances - Now there are 3 options of payment one is known as C.O.D cash on delivery customers pay on the spot no payment and no inventory, a next one is called BILL TO BILL, which allows a customer to skip the first payment, and always have a balance ..do you wonder why? Well, this secures an account and makes customers have to order over and over the second it gets you in the door, why would a business buy from you when they are perfectly happy with their current food distributor? The bad side is a customer can stiff you, it happens!
6. managing customer returns - when collecting balances from clients you may have some returns that are known as unwanted items or out-of-date products, you might have to take the loss depending on what deal is structured with your supplier, if the item is new then you can simply get credit from your wholesaler.
7. paying vendors - food distribution businesses usually establish credit with the warehouse they get their wholesale products, this is because you can pay for the old order and take the current one and worry about it the following week, just as we mentioned before its similar to a bill to bill option. This gives the warehouses time to do their numbers instead of rushing the same day of pick up.…. Start over
Now let’s go through some factors explaining how this business can be beneficial for you
Should I buy or start my own food distribution business?
Whether you decide to buy or start your own food distribution business, the work won't get any easier, it's a cutthroat business. The benefits of buying a food distribution route it’s you get something solid that is producing money and generating net income and you will get a handful of customers that you can build on slowly, Now starting from scratch here are 3 questions you might want to ask yourself before you proceed:
1. Can I get customers to buy from me?
2. Can I afford to offer customers the BILL to BILL option?
3 . Can I afford to buy a refrigerated truck?
Benefits of owning or starting a food distribution business
1. Work for yourself: Although working as a Food Route owner does have some small restrictions like having to develop a specific routine for work, you won’t have to deal with someone else trying to micromanage you or control you. You will be your boss working for yourself. And being an independent business owner always comes with its perks. You will be able to work as you desire and use the strategies suitable for you to expand the business and make the most out of your provision route. You can even hire employees (such as delivery truck drivers) to do the work for you and just manage it instead of doing everything by yourself, but that, of course, means a pay cut from your commission.
2. Benefits of the Reputation of the Company: We all know what a headache starting a new business can be. Anyone with a new business has to work day and night to make it stable. You have to take care of marketing, accounting, and a thousand other departments, but when you start as a Food Route owner for companies like Boar’s Head or Hormel, all of it is already done for you. You will be delivering products from already well-established companies with a lot of dedicated customers. Instead of having to spend a huge amount of time, energy, and money, you can start with profit in the very first week of buying a food provision route.
3. Potential to Increase the Net Profit: No matter where you buy a Food Route, there is always a lot of potential to increase the yield. And when we say ‘increase’ we don’t mean five or ten percent of the already existing income, we mean many multiples of it. Wholesale food has high profits and growing your business will give you the ability to expand to a bigger fleet and hire help like sales reps, these sales reps can work on commission. You can adapt different techniques and strategies, and use your communication skills and right business ethics to increase the number of customers within your route. The more products sold in your route the better your income will be. But doing this requires more hard work and the correct strategy.
4. Stable Income: Another big advantage of being a Food distribution route owner is the surety of a stable income. You won’t be waiting for your products to be sold or for the harvest season to get your payment. The food industry is something that is in business all the time and almost all food products are in demand every single day of the year. Most companies offer weekly or monthly based payment plans. And of course, as we discussed earlier, you can increase this income depending on the productivity of your delivery. Many companies offer bonuses as well which you can avail of, to maximize your income.
Conclusion: So as you read there’s is a huge potential when starting or finding a food distribution route for sale! it is a big market, a much-needed service and you have the options to choose which food products you want to sell. So the next time you see an ad for a Food distribution route for Sale, do proper research and you might find out this investment can very possibly turn out very beneficial for you.
For our readers, if you decided to pursue this venture which wholesale food would you start selling?
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