Tatry Peak Management
Savings

How to talk to a supplier to get a 5.4% discount at the start

By Marek Gąsienica, Cost Specialist·September 15, 2024·7 min reading

Most restaurant owners in Zakopane overpay for goods because they are afraid of tough talks with wholesalers. Numbers don't lie: lowering purchase costs by just a few percent can save financial liquidity outside the season. No more wasting goods and accepting every hike without asking why.

Why is 5.4% a real saving, and not just a number?

At Tatry Peak Management, we analyzed the expenses of 43 restaurants from the Tatra district in the period from January to June 2024. The average monthly cost of purchasing raw materials was 34,200 PLN. Obtaining a discount at the level of 5.4% means that 1,846 PLN remains in your wallet monthly. On an annual scale, that is over 22,100 PLN, which covers the cost of renting part of the premises or two solid backroom renovations. This is not virtual money, it is specific cash that disappears in middlemen's margins if you don't watch your business.

Suppliers in Lesser Poland are used to restaurateurs rarely checking invoices in detail. When we enter with an audit, it often turns out that prices on delivery notes differ from those agreed by phone by 3-4%. Work done on time in this case is systematically checking every delivery with a scale in hand and a price list before your eyes. Our experience shows that wholesalers respect a customer who knows that the price of chicken increased by 12 groszy without announcement more than one who pays everything without a word.

It is worth understanding the operating mechanism of food wholesalers in the vicinity of Nowy Targ and Zakopane. They are also fighting for margin, but they have specified brackets for regular customers. If you have been ordering from them for 14 months and have never negotiated, you are probably in the highest price bracket. Moving to a lower bracket does not require great oratorical talent, just hard data about your annual purchase volume, which you must hit the table with during the next meeting with a sales representative.

Numbers don't lie: lowering purchase costs by 5.4% is an extra 22 thousand zlotys in your pocket every year.
Why is 5.4% a real saving, and not just a number?

Preparation of hard data before the conversation

Before you call your account manager at the wholesaler, you must pull reports from the POS system for the last 92 days. Check exactly how many kilograms of meat, dairy, and vegetables you actually used. Don't rely on hunches, because they fail in business. If you see that you buy 147 kg of pork tenderloin per month, you have a specific argument. The wholesaler prefers to have a stable customer for 150 kg with a smaller margin than to look for a new recipient for the same quantities. Remember: Methods proven in Tatra conditions are based on specifics, not on pleas for mercy.

The next step is to check the competition. You don't have to change your supplier right away, but you should have at least 3 current offers from other wholesalers in the region on your desk. When the representative hears that a wholesaler from Szaflary offers the same eggs for 8 groszy cheaper per unit, they will suddenly find a way to lower the price. It's simple business psychology. The average time needed to collect such offers is 2h 14min, and the savings can be hundreds of zlotys with every delivery.

Pay attention to the payment term. This is one of the strongest arguments in negotiations. If your restaurant has good liquidity and you can pay by transfer in 7 days instead of 14, then for the wholesaler this is worth real money. Shortening the payment term often allows getting an additional 1.5% discount right away. At Tatry Peak Management, we always repeat to our clients: cash in the supplier's hand is your biggest asset in the conversation about unit price.

Preparation of hard data before the conversation

Three arguments that close the negotiations

The first argument is logistics. If a supplier comes to you 5 times a week with small packages, it generates huge transport costs. Propose that you limit deliveries to 2 large shipments per week. In exchange for this, the wholesaler saves on fuel and the driver's time, which allows them to give you back part of that margin in the form of a discount. This is a classic situation where both sides win, and you also plan your kitchen work better. No more wasting goods through too frequent, ill-considered orders.

The second argument is exclusivity for specific product groups. You can agree with the supplier that 99.2% of dairy and cheeses you take only from him for the next 11 months. Such declarations give the wholesaler certainty of turnover and allow them to better plan their own purchases from producers. In exchange for such loyalty, the standard in the HoReCa industry in Poland is a retrospective discount or a permanent price reduction by a few percentage points. It is pure pragmatism that builds the stability of both companies.

The third argument is references and referrals. The industry in Zakopane is small and everyone knows everyone. If you are satisfied with the service, propose to the representative that you will recommend their services to two friend guesthouse owners in Kościelisko, provided you get better terms for the start of the winter season. This works better than any advertisement. Salespeople have their sales goals and a new opening with another client is worth lowering the margin for you. We have checked this many times when implementing changes for our 19 regular clients.

Reducing the number of deliveries is lower cost for the wholesaler and a bigger discount for you. A simple deal.
Three arguments that close the negotiations

How to monitor prices after negotiations?

Obtaining a discount is only half the battle. The real work begins with monitoring whether those prices are actually on the invoices. At Tatry Peak Management, we recommend designating one person (ideally a shift manager or head chef) who will spend 18 minutes a day comparing prices on the invoice with the agreement sheet. It happens that systems in wholesalers 'forget' about discounts after two weeks. Without your vigilance, the savings will quickly evaporate, and you will return to the starting point.

It is worth conducting a mini-tender once a quarter. Even if you are satisfied with your current supplier, ask for a quote for 10 key products from someone else. This keeps your business partner on their toes and gives you certainty that the market price has not moved too far from your arrangements. Work done on time in this context is keeping your finger on the pulse of the market, which in Zakopane can be very variable due to the influx of tourists during winter holidays and vacations.

Remember about interpersonal relations, but keep your distance. A nice conversation over coffee with a representative is important, but it cannot replace an Excel sheet. If a supplier claims they must raise the price by 10% because of the 'market situation', ask for specific justification in writing. Often it turns out that the hike is unjustified or applies only to a selected segment of products, and the wholesaler is trying to stretch it across the entire range. Be vigilant, because numbers don't lie, and errors cost your company real money.

How to monitor prices after negotiations?