Are you juggling too many supplier relationships and watching your margins shrink? Most hospitality entrepreneurs work with 8-12 suppliers, but 4-6 is often enough. Smart bundling can slash your purchasing costs by 10-15%.
Why fewer suppliers save you more
Every supplier drains your resources, even during quiet periods. Consider these hidden costs:
- Invoice processing and administrative overhead
- Minimum order requirements that inflate inventory
- Weak negotiating position with scattered volumes
- Excess stock buffers for each supplier relationship
💡 Example:
Restaurant with 10 suppliers vs. 5 suppliers:
- Administration: 5 hours/week vs. 2.5 hours/week
- Minimum orders: €2,500/week vs. €1,800/week
- Discounts: average 3% vs. 8%
Savings: €15,600/year on €200,000 purchasing
Calculate your current supplier costs
For each supplier, track these metrics:
- Annual volume: Your yearly spend per supplier
- Discount percentage: Current rebates and volume breaks
- Administration time: Hours spent on orders and invoicing
- Minimum orders: Forced purchase thresholds
💡 Example calculation:
Supplier A (vegetables):
- Annual volume: €18,000
- Discount: 2%
- Administration: 1 hour/week × €25/hour = €1,300/year
- Minimum order: €150 (forces unnecessary inventory)
Total 'costs' of this supplier: €1,300 + missed discount opportunities
Calculate savings from bundling
Consolidating suppliers typically delivers:
- Enhanced discounts: Greater volume concentration drives better rates
- Streamlined administration: Fewer purchase orders and invoices
- Reduced inventory costs: Eliminate safety stock for multiple suppliers
This is a pattern we see repeatedly in restaurant financials - operators who consolidate from 8+ suppliers to 4-6 suppliers see immediate cost reductions.
Formula for potential savings:
(Current purchasing × Difference in discount%) + (Hours saved × Hourly rate) + Inventory reduction
💡 Example bundling:
From 3 vegetable/fruit suppliers to 1:
- Volume: €45,000/year (3× €15,000)
- Discount was: 2%, becomes: 7%
- Discount savings: €45,000 × 5% = €2,250
- Administration: 2 hours/week less = €2,600
- Inventory: €800 less tied up
Total savings: €4,850/year
⚠️ Watch out:
Don't consolidate everything with one supplier. You'll lose flexibility and backup options. 4-6 suppliers is usually optimal.
Which suppliers can you bundle?
Look for products that naturally combine:
- Vegetables and fruit: Often sourced from the same wholesaler
- Dry goods: Pasta, rice, canned items, spices
- Dairy and eggs: Many dairy suppliers stock both
- Meat and fish: Some suppliers handle both proteins
Negotiate with your new volumes
Bundled volumes give you negotiating power:
- Discount percentages: At €50,000+ you often secure 5-8% discounts
- Payment terms: Extended terms improve your cash flow
- Minimum orders: Lower thresholds through higher frequency
- Delivery costs: Free delivery at higher volumes
💡 Negotiation strategy:
"I'm reducing my suppliers from 8 to 5. My total dry goods are €35,000/year. What can you offer me if I place this entirely with you?"
Let suppliers compete against each other based on total volume.
How do you calculate savings? (step by step)
Inventory your current suppliers
Make a list of all suppliers with annual volume, discount percentage, and time you spend on them. Also add up how much you have to order at minimum each time.
Identify possible bundling
Group suppliers that deliver similar products. Find out which supplier has the broadest assortment in each category.
Calculate the new volume per supplier
Add up the volumes of suppliers to be bundled. This becomes your negotiation volume for better discounts.
Request quotes based on total volume
Contact suppliers with your new, higher volume. Ask for discount percentages, payment terms, and delivery conditions.
Calculate total savings
Calculate: (Volume × difference in discount%) + (hours saved × €25/hour) + inventory reduction. This is your annual savings.
✨ Pro tip
Analyze your three smallest suppliers over the next 14 days and calculate their actual weekly admin hours. You'll discover these relationships cost more in time than they save in price competition.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
How many suppliers are optimal for a restaurant?
For most restaurants, 4-6 suppliers hit the sweet spot. Fewer than 4 creates dangerous dependency, while more than 8 drowns you in administrative costs and kills your volume discounts.
What if one supplier fails after bundling?
Always maintain at least 2 suppliers per product category. Bundle vegetables with supplier A, but keep supplier B active for 20% of your volume as insurance.
How much discount can I expect with higher volumes?
At €25,000-50,000 annual volumes, expect 5-8% discounts. Above €50,000, you can often negotiate 8-12%, depending on product category and supplier margins.
How do I calculate administration time per supplier?
Track ordering time, invoice processing, problem resolution calls, and inventory counting. Most suppliers consume 30-60 minutes weekly in administrative tasks.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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