bake - February 2013 - 36

Of the vendors who do offer alerts, they’re accu-

says. “Make sure that the quality and pack size are

rate, Stanton says. “They’ll say, ‘We’re looking at

the same. Sometimes the prices might be lower, but

price stability on this front for this amount of time,’

you’re getting less or the quality is not to par.”

or they’ll say, ‘Things are volatile, so if you can buy
an extra amount of this, now is the time to do it,’”

“It’s basically leverage,” Stanton says. “They know that

Stanton says.

I can go to any one of numerous other vendors in the
Chicago area.” Competition among suppliers works to

Buying in bulk represents a classic strategy in
receiving discounted prices from suppliers.

the favor of the retailer. “Just in terms of being able
to say, ‘We’re buying from this company, and
we’re buying a lot,’ they’ll give us a better

“We get a 20% discount when we buy in

price. That counts for something,”

bulk,” O’Donnell says.

Stanton says.
“We’re not so tremendously large
that we’re buying a freight car full of

Protect proﬁtability

sugar or ﬂour,” Stanton says, “but we

Sometimes the economy dictates a

are large enough that we’re gener-

price increase, product elimination,

ating discounts from our vendors.”

etc., no matter how well you manage
your costs. Knowing where you’re at
and where you need to be makes these

Buying in bulk, especially when a vendor
alerts you to pricing going up in the future,
offers a clear advantage to not only saving money,

situations as easy and efficient as possible.
“We review our recipe costs every quarter to deter-

but also giving you a surplus of ingredient. But

mine if our food cost percentage has gone up and

proceed with caution and make sure it makes sense.

if we need to raise our prices on certain products,”

“You have to be judicious in where you spend your

O’Donnell says. If you cannot compete on pricing,

money,” Stanton says. “Most small businesses don’t

then cutting an entire product from your offerings

have a bottomless storage facility or the money to

might be the best solution, but be careful.

buy that stuff.”
“Eliminating products is always an option,” Stanton
Tying up too much money in inventory can set you

says. “You’ve got to be careful where you cut. You’ve

back when it comes to the day-to-day operational

got to make sure it’s the right thing to do. Even if it’s

problems that you face. Getting a good price with

only temporary, you don’t want to alienate customers

knowledge of a future increase lends itself to the urge

who are looking at that.”

of stocking up, and that makes sense, Stanton says.
On the other hand, you need to keep an eye on things

O’Donnell uses Cheftec computer software to

so you won’t run out of capital should something

help with managing ingredient costs at Ooh La La.

come up that necessitates cash on hand.

“Cheftec helps with our costing formulas and keeps
us up to date with our latest invoice,” she says. “All we

Shop openly

have to do is enter our recipes and invoices manually.

Check the pricing of ingredients from multiple

One of our suppliers automatically interfaces with the

suppliers to make sure you get the best pricing

Cheftec software, which saves us a step.”

available. “We always compare prices from three
different suppliers before choosing which supplier

Look at your invoices daily, make a spreadsheet with

to buy from,” O’Donnell says. “Sometimes when you

the pricing for the commodities you use most and pay

let a supplier know you can get a better price from

close attention to it. “If things are spiking when they’re

another company, they will consider lowering their

not supposed to, it sets off alarms for you,” Stanton

price.” When comparing prices you need to make

says. “You need to take a look at the stuff and see how

sure you’re comparing equally. “You have to be

you’re doing things, what you’re doing and where you

cautious when doing price comparisons,” O’Donnell

need to be.”

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