Three Red Flags You Aren’t Getting a Fair Deal from Your Supplier

Profit margins are everything for a business, particularly one that involves a high cost of goods like catering companies and floral designers. Spend too much on the elements needed to deliver and you could find yourself with a diminishing bottom line.

You may think raising prices is the answer to combat shrinking margins, but such a move depends on the current state of the market. Otherwise, you risk pricing your business out of the market. If competitors’ rates aren’t increasing but your margins continue to decline, it’s likely that you aren’t getting a fair deal from your supplier.

Unfortunately, not all suppliers or wholesalers have your best interest in mind. They, too, are business owners and make decisions based on their own goals. While it may not be done out of malice or disregard, above-market pricing can cause your business to lose money without any way to recoup the losses.

If you’re concerned that you aren’t getting the best rates from your distributor, keep these red flags in mind as you prepare for your next order—and be ready to make a change when the opportunity arises. 

You don’t feel heard. 

As a client, you deserve a supplier who listens to your questions and concerns, addressing them whenever possible. If you feel like you’re constantly pushed to the side or overlooked as a loyal customer, it’s time to set your sights elsewhere. A great working relationship is one in which your seller gets to know your business model, so they can make insightful recommendations that support your needs and keeps you coming back for more. Stay vigilant if it seems like your distributor is only out to sell, sell, sell.

Your market research looks different.

One of the perks of working with a wholesaler is receiving discounted rates for bulk purchasing. Simply put, you should never be paying more for ingredients than you would at a grocery store! If you’re browsing the aisles and notice you’re being overcharged, speak up and ask your supplier for an explanation. It can also be helpful to ask around to see what industry peers are paying for the same goods to confirm the discrepancy. In most cases, your seller won’t have a good reason for overcharging—at which point, you can begin researching alternative sourcing options.

You constantly see items on “flash sale.”

Do you feel bombarded by promotions of flash sales and other deep discounts that seemingly happen all the time? This is usually a red flag that the supplier is regularly offloading inventory, meaning they weren’t able to sell it and need to get rid of it ASAP. While a sale is nice every now and then, be cautious if it seems to be a regular practice. A reliable wholesaler doesn’t need to push their items so heavily and so often; see if there are ulterior motives behind sales before taking advantage of the perceived savings.

Putting your business first means making the necessary adjustments to increase net profits and achieve sustainability—even if it means taking a different route than the one you’ve followed for years. If you’re being overcharged, do what it takes to find a new wholesaler or join a GPO to reclaim your margins and set your company up for success.