A supplier who doubles as your customer creates one of the trickiest pricing scenarios in restaurant operations. You're balancing fair dealings on both sides while protecting your margins. Most operators struggle with this dual relationship without clear guidelines.
Why this creates complications
This dual relationship puts you in an awkward position. You're negotiating as both buyer and seller with the same person. And that leads to several challenges:
- Pressure to accept below-market purchase prices
- Confusion about which price to use in calculations
- Conflicting interests during negotiations
- Difficulty determining your true cost price
Calculate your real purchase price
Forget the relationship dynamics for a moment. You need to know your actual costs first. Here's how:
? Example:
Your supplier/customer delivers fresh salmon at €18/kg. Other suppliers charge €20/kg.
- Supplier price: €18/kg
- Market price: €20/kg
- Your advantage: €2/kg
Use €18/kg for recipe costing - that's what you actually pay
Always calculate with your actual purchase price, not market rates. But track both numbers for comparison purposes.
Set up transparent agreements
Clear agreements prevent headaches down the road. You need boundaries between both relationships:
- Separate bookkeeping: Handle purchases and sales as distinct transactions
- Fair market pricing: Both parties receive reasonable market rates
- No cross-offsetting: Pay invoices normally without mixing transactions
- Written contracts: Document delivery terms separately from customer agreements
⚠️ Watch out:
Avoid cross-subsidies. Paying too little for purchases often means you unconsciously compensate through your selling prices. This distorts both relationships.
One of the most common blind spots in kitchen management is failing to recognize how these dual relationships skew your true food costs over time.
Analyze the profitability impact
You need hard numbers to see if this arrangement actually benefits you:
? Example calculation:
Monthly purchases from supplier/customer: €3,000
Monthly sales to customer/supplier: €1,500
- Discount on purchases: 10% = €300 benefit
- Discount on sales: 5% = €75 cost
Net monthly benefit: €225
Track this calculation monthly. You'll quickly see if the relationship stays mutually beneficial.
Compare with alternative suppliers
Don't get comfortable just because you have a dual relationship. Regular comparisons protect your position:
- Get quotes from 2-3 alternative suppliers every quarter
- Compare quality and service levels, not just prices
- Calculate total costs including delivery and payment terms
- Keep these comparisons on file for future reference
Document everything clearly
A food cost calculator helps you track multiple supplier prices per ingredient. This gives you immediate visibility into:
- Your actual price from the supplier/customer
- How it compares to alternative suppliers
- The impact on your per-dish food costs
- Monthly savings or additional expenses
This data helps you make objective decisions regardless of personal relationships.
Related articles
How do you calculate the right purchase price? (step by step)
Gather all price information
Note the price from your supplier/customer and request quotes from at least 2 other suppliers for the same product. Compare not just the price, but also quality, delivery time, and payment terms.
Calculate your actual cost price
Use the price you actually pay for your recipe calculations and food cost. This is your real cost price, regardless of any discounts or benefits from the dual relationship.
Document the difference
Keep track of how much you save or pay extra compared to the market price. This helps you assess the total value of the relationship and make transparent decisions.
✨ Pro tip
Run a quarterly analysis comparing your total relationship value: savings on purchases versus discounts given on sales. Track this for 6 months to maintain objectivity and spot any shifts in the arrangement's profitability.
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
Should I give discounts because my supplier is also a customer?
Can I offset invoices against each other?
What if my supplier/customer demands an extra discount?
How do I prevent conflicts of interest?
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
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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