A Strategic Guide to Successful Pricing in the Bulk / Wholesale Food Ingredients Industry


A Strategic Guide to Successful Pricing in the Bulk / Wholesale Food Ingredients Industry

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Have you ever quoted a potential customer, only to have them never return your calls or emails? If so, don’t feel alone. About 75% of surveyed food industry professionals say that the bulk of their new price quotes for non-existing customers do not produce new sales for their food ingredients business.  So what’s going on? Are they simply not buying? Chances are, they are actually getting much lower pricing.

Why Are Your Competitors Prices Cheaper than Yours?

A number of factors go into pricing, and most experienced brokers SHOULD be on the lookout for products that aren’t top quality. However, in our tough economic times, many food brokers are being pressured to find the cheapest price on their food ingredients at all costs. This means, possibly overlooking the lack of the required certifications and food safety programs, not ordering all of the product data, and even accepting or turning a blind eye to adulterated or expired products.

While selling adulterated or shoddy products can put your food ingredients business at a high risk for a bad reputation, skimping on programs that ensure quality will also put a huge chasm in your food business requirements for some larger businesses that always require proof of these programs. So how does one price competitively with people who are offering rock-bottom prices?

  • Buy your product in larger quantities or from a co-op. Finding a group of similar buyers can greatly work to your advantage and lower your bulk costs dramatically. If you are a manufacturer, being open to business partnerships can also help lower costs.
  • Cut corners. If you have overhead costs that can be reduced, consider having a few people go part-time until business picks up again. If you’re buying supplies and services on a regular basis, re-evaluate all of your pricing and see if you can find better deals. Cut out all of the unnecessary things.
  • Focus on up selling to your largest buyers. Offer discounts for even larger buys, so you can increase your buying power of that particular product.
  • Give your customer the best quality product that you can possible produce. It’s true that “you get what you pay for”. In many industries, pricing is becoming competitive simply because of bad business ethics. Your business can remain true to it’s word, and offer only the best product. This definitely isn’t an area you want to skimp on.
  • Experiment with pricing. Try new price structures for different clients or new clients and see how they work out. If you’re constantly getting outbid, this could help elicit new business relationships and new sales.
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