Author Topic: Is there money in food distributorships?  (Read 3448 times)

Bbqmustache

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Is there money in food distributorships?
« on: January 10, 2016, 05:12:42 AM »
Through a Facebook messaging thread, I am now in position to help a sauce company (in about 150 stores now in two states) expand into a couple new states.

My plan is that I will negotiate store contracts, I will have boots on the ground folks doing stocking, restocking and tastings.  For a $5 jar of salsa, is their room in there after paying the maker, the boots on the ground guy, the shipping, the store profit, there might be .15-.25 in there left for me?

Kaplin261

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Re: Is there money in food distributorships?
« Reply #1 on: January 10, 2016, 05:21:35 AM »
What do you risk if it does not work out?

Bbqmustache

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Re: Is there money in food distributorships?
« Reply #2 on: January 10, 2016, 06:41:54 AM »
Miles on my car.  Heading up to meet sauce company owner on the 19th.  Have a college friend who is getting me a meeting with a small grocery store chain ownership on the 29th.  Same friend is also lining up the boots on the ground guy/gal, who potentially earns .70 a jar.  I've researched cost of shipping via UPS ground.  I am the analyst with the connections.  Providing my college friend 10% of what I earn.  We will see, because my estimates of what sauce guy needs/wants are just that.  Plus have to work out the money flow too.  We will see.  I want this and other projects I am working on to add $300-$500/month to our budget.

lakemom

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Re: Is there money in food distributorships?
« Reply #3 on: January 10, 2016, 06:45:31 AM »
IMO if you're not business savvy enough to do some fairly accurate calculations based on your exact location(s) and numbers you are not yet ready for this venture.  The only answer available now is "maybe."  There are just too many variable (all affected by location) to answer the question as asked.  Finding a franchise knowledgeable consultant in your area may be worth the effort and cost to help you evaluate the opportunity you are interested in.

Kaplin261

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Re: Is there money in food distributorships?
« Reply #4 on: January 10, 2016, 07:47:15 AM »
IMO if you're not business savvy enough to do some fairly accurate calculations based on your exact location(s) and numbers you are not yet ready for this venture.  The only answer available now is "maybe."  There are just too many variable (all affected by location) to answer the question as asked.  Finding a franchise knowledgeable consultant in your area may be worth the effort and cost to help you evaluate the opportunity you are interested in.

If the financial risk is minimal then failure to produce profit is not important because he/she would gain the knowledge for future higher risk ventures.

Bbqmustache

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Re: Is there money in food distributorships?
« Reply #5 on: January 11, 2016, 01:37:12 AM »
Meeting with company owner next Monday, should know if the numbers work at that point.  I am not buying into anything, and I will be the coordinator, not the boots on the ground folks.  I will just need to see if my cunning plan will work.  Owner's cost and profit desire unknown, true shipping cost may not be accurate.  We will see if I can eek my 20 cents out. 

GrowingTheGreen

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Re: Is there money in food distributorships?
« Reply #6 on: January 11, 2016, 08:26:39 AM »

If the financial risk is minimal then failure to produce profit is not important because he/she would gain the knowledge for future higher risk ventures.

This. Don't get me wrong; MLM schemes are garbage, but this doesn't sound scammy. So many people get analysis by paralysis when they should be jumping in. The only time you're truly ready for something is when you've been doing it for a few years. If all that is at risk is gas money, then pull the trigger and work your butt off.

Wealthy people take calculated risks and lose money from time to time. But reward only comes with taking a risk.
« Last Edit: January 11, 2016, 08:29:07 AM by GrowingTheGreen »

Axecleaver

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Re: Is there money in food distributorships?
« Reply #7 on: January 11, 2016, 01:59:20 PM »
Agree with Green, there's so many variables you could analyze forever, you should continue with your plan to meet with some folks, learn as much as you can, and get more accurate estimates to see if this will fly.

Right now, you should build a financial model for the supply chain. Put in all the costs, direct and indirect, that are involved. Make sure you include margin for everybody in your supply chain. Right now, these are all guesses. The way we make models more accurate is to document our assumptions. Put those in the spreadsheet with the other stuff, and after you have a few meetings, revise it to incorporate your new understanding.

Worst case, you learn a few things for the cost of a tank of gas. That's a bargain. Let us know how it goes.

chesebert

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Re: Is there money in food distributorships?
« Reply #8 on: January 11, 2016, 02:14:02 PM »
Through a Facebook messaging thread, I am now in position to help a sauce company (in about 150 stores now in two states) expand into a couple new states.

My plan is that I will negotiate store contracts, I will have boots on the ground folks doing stocking, restocking and tastings.  For a $5 jar of salsa, is their room in there after paying the maker, the boots on the ground guy, the shipping, the store profit, there might be .15-.25 in there left for me?

You should know the answer, along with profitability drivers, the key terms of a distribution agreement and deal breaker points. If not, I would learn the business firs before investing in one. The easiest way to learn about new business is to look at prospectuses and annual reports of public companies in the same line of business and the analyst reports (if you can get your hands those). You should also listen to earnings calls so that you know what good KPIs look like. Just note that your costs will be higher and leverage will be lower, so you should target your own KPIs accordingly.

Fuzz

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Re: Is there money in food distributorships?
« Reply #9 on: January 11, 2016, 05:15:40 PM »
Miles on my car.  Heading up to meet sauce company owner on the 19th.  Have a college friend who is getting me a meeting with a small grocery store chain ownership on the 29th.  Same friend is also lining up the boots on the ground guy/gal, who potentially earns .70 a jar.  I've researched cost of shipping via UPS ground.  I am the analyst with the connections.  Providing my college friend 10% of what I earn.  We will see, because my estimates of what sauce guy needs/wants are just that.  Plus have to work out the money flow too.  We will see.  I want this and other projects I am working on to add $300-$500/month to our budget.

I don't see why you should provide your college friend with 10 percent of what you earn indefinitely. If there is value in the introduction, just pay for that in a lump sum.

Bbqmustache

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Re: Is there money in food distributorships?
« Reply #10 on: January 27, 2016, 05:18:38 AM »
Update:  College friend will not take funds, 10% to charity that I choose instead.

Meeting with company owner went well, I now have two cases of sauce gratis to introduce product to new stores.

Phone meeting with OH grocery store owner went well, followup meeting hopefully this Friday in person.

I was hoping for .15 to .25 per jar; shipping is a lot lower than my estimates, I could still provide my jobbers a good commission and grab up to .40 per jar!

Will keep this thread updated.  Thanks to all!  Hey, anyone know any grocery store owners?

GrowingTheGreen

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Re: Is there money in food distributorships?
« Reply #11 on: January 27, 2016, 06:54:41 AM »
Glad to hear you're seeing this thing through!

Pooplips

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Re: Is there money in food distributorships?
« Reply #12 on: January 27, 2016, 07:08:05 AM »
Comment to Follow.

Kaplin261

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Re: Is there money in food distributorships?
« Reply #13 on: January 27, 2016, 07:22:46 AM »
Great job! Keep us posted.