Most restaurant owners underestimate how much time they actually spend managing suppliers. You're juggling quotes, placing orders, checking deliveries - all while trying to run your business. That time has real value, and you need to track it properly to see if your supplier strategy makes financial sense.
What falls under supplier management?
Supplier management goes way beyond just placing orders. It includes all the time you spend on:
- Requesting and comparing quotes
- Placing orders (phone, email, app)
- Checking and processing deliveries
- Checking invoices and administration
- Finding and evaluating new suppliers
- Handling complaints and returns
Calculate your hourly rate as an entrepreneur
First, figure out what your time's actually worth. As an entrepreneur, you don't punch a time clock - but your hours still have value.
💡 Example hourly rate calculation:
You want to earn €4,000 net per month and work 50 hours per week.
- Desired gross income: €6,000/month (including tax)
- Per year: €72,000
- Working hours per year: 50 × 52 = 2,600 hours
Hourly rate: €72,000 ÷ 2,600 = €27.70/hour
Measure your time per supplier
Track your supplier activities for a full week. Don't guess - actually measure. I've seen this mistake cost the average restaurant EUR 200-400 per month because they're completely blind to their real time investment.
💡 Example time measurement:
Restaurant with 3 suppliers, measured over 1 week:
- Greengrocer: 45 minutes (ordering, checking, paying)
- Meat/fish: 30 minutes (ordering, quality check)
- Beverage supplier: 20 minutes (automatic delivery)
Total per week: 95 minutes = 1.6 hours
Calculate the annual costs
Now multiply your measured time by your hourly rate and 52 weeks. And yes, include vacation weeks - someone still needs to handle orders.
💡 Annual cost calculation:
Using the example above:
- Time per week: 1.6 hours
- Hourly rate: €27.70
- Working weeks per year: 50 (2 weeks vacation)
Annual costs: 1.6 × €27.70 × 50 = €2,216
Convert to percentage of revenue
Turn this into a percentage of your revenue so you can benchmark against other costs. This shows if you're using your time efficiently or not.
⚠️ Note:
Only count pure supplier management time, not cooking or other tasks. Otherwise you'll skew the numbers completely.
Formula: Supplier management cost % = (Annual supplier management costs ÷ Annual revenue) × 100
💡 Percentage calculation:
Restaurant with €400,000 annual revenue:
- Supplier management costs: €2,216
- Annual revenue: €400,000
Percentage: (€2,216 ÷ €400,000) × 100 = 0.55%
Benchmarking and optimization
Typical supplier management costs run between 0.3% and 1.2% of revenue. Above 1%? You've got optimization opportunities:
- Fewer suppliers (more volume per supplier)
- Digital ordering systems instead of phone calls
- Agree on fixed delivery schedules
- Automatic orders for standard products
Digital tools can centralize supplier data and speed up comparisons, cutting down your purchasing management time significantly.
How do you calculate supplier management costs? (step by step)
Determine your hourly rate as an entrepreneur
Calculate what you want to earn per year and divide it by your working hours. For example: €72,000 desired income ÷ 2,600 working hours = €27.70 per hour.
Measure your time during one week
Keep track of how much time you spend on ordering, checking deliveries and administration per supplier. Add it all up for a weekly average.
Calculate the annual costs
Multiply your weekly time by your hourly rate and 50 working weeks. Divide by your annual revenue and multiply by 100 for the percentage.
✨ Pro tip
Track every supplier interaction for exactly 10 business days using your phone's timer - including those "quick" calls and invoice checks. Most restaurant owners discover they're spending 3.2 hours weekly on supplier coordination alone, not the 1.5 they estimated.
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 also include my chef's time?
Only if your chef handles supplier management tasks. Then use their hourly rate instead of yours. Most chefs just check deliveries, which counts as production work, not supplier management.
How often should I recalculate this?
Twice per year minimum. Your supplier mix changes, your processes evolve, and so does your time investment. Recalculate immediately after major changes like new suppliers or ordering systems.
What if I'm spending above 1.5% of revenue?
You're spending way too much time on suppliers. Consolidate vendors, switch to digital ordering, or set up fixed delivery schedules. That time needs to go back into revenue-generating activities.
📚 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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