Let’s face it, it’s a challenging time for the food distribution industry. Costs are growing, payment wait times are increasing and food safety standards are changing. No matter what business you are in if you fail to look at different avenues your business can reduce costs, you could face closing down.
We know what you are thinking, reducing costs is tough! Often when business look to cut costs from one area of the business another area suffers. But for food vendors and distributors there are alternative ways you can reduce costs and not impact the longevity of your business.
EasyVend has put together 5 ways your business can reduce costs in 2021:
1. Forecast your ordering
Having an over or under supply of food is literally flushing money down the toilet. Business who find themselves in this situation could face a serious cashflow issue.
To save money you need to forecast your sales, have an accurate understanding of the quantity of orders you will take in a period of time and order stock based on the data. It is highly recommended when forecasting distributors seek advice from their accountant for an accurate assessment.
The benefit of forecasting is you will minimise the risk of having too much or too little stock. You won’t find yourself having to lose money on products that expire before being sold or having to turn a customer away due to stock shortage.
2. Implement a payment gateway
The number one issue in the food and beverage industry is debtors. Recent data released by Xero shows food distribution businesses wait 28 days on average to receive payments for goods. No matter what business you are in waiting a month for payment is going to have a serious effect on your bottom line.
To increase cashflow and reduce costs, distribution businesses should consider implementing a Payment Gateway. A payment gateway provides distributors with a solution that automates the entire payment process from invoicing to receipting – saving you hours every week.
The benefit of using a payment gateway is you will eliminate staff processing cost, debt and you increase profits.
3. Evaluate your product range
Assess your sales figures, see what items are selling and what are not. There’s no point sourcing products that don’t sell. If you do, you will end up with more products than needed and less money in the bank.
While you are forecasting your sales, you should collate your data, see the recurring order numbers for a particular product and make a strategic prediction and order accordingly. This way you will limit expenses and maximise cashflow.
4. Reduce staff costs during down times
All industries have quieter sales seasons. Many businesses fall into the trap of keeping all staff on during down times and end up bleeding money. Having 10 staff members on during a time that only requires 5 will seriously impact your financial position.
Use your business data to understand what months you will peak and assess how many staff you need to complete the tasks. Before making any changes, you need to consider the overall impact staff reductions will take on your business. The last thing you want is to effect your customer service.
5. Streamline operations through an order management system
Operating a food distribution business is getting harder and harder. To stay competitive distributors, need to implement solutions that automate manual time-consuming tasks.
Using an order management system like EasyVend distributors can automate all repetitive admin tasks, such as ordering, invoicing, receipting, inventory management and route management – saving you hours of time every week and opening your doors to future growth.
Final word,
Reducing costs is always a struggle for businesses but there are ways of doing so without impacting efficiency and customer service. Using the tips mentioned above your business can reduce costs and maximise profit.
Before implementing changes, it is highly recommended distribution businesses consult all relevant parties including their accountant to make the best possible decision.
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About EasyVend
For food vendors and distributors, EasyVend supports and automates every part of your business, freeing you up to grow your sales unlike other ERP systems that are designed more for wholesale suppliers than for distribution businesses like yours.
EasyVend includes all your everyday needs like inventory management, online ordering, invoicing, receipting, delivery management, payment gateway, customer reminders, Xero integration and so much more.
Want to learn more about EasyVend? Call us today on 1300 473 744 or click the button below to get a no-obligation free demo of EasyVend.