If you are closely looking, you know there has been a buzz about food supply ventures in the market since the pandemic. Wholesale food supply (or food chains) is a highly prospective industry experiencing a growth boom lately.
Currently, the total wholesale food market was valued at USD 2323.29 billion globally in 2021 and is projected to grow from USD 2,540.05 billion in 2022 to USD 5,194.60 billion by 2029, exhibiting a calculated approx. The growth rate of 10.76% during the forecast period. Whoa!
Nonetheless, it sets its bars pretty low, making this thing the perfect entry point to build something of one’s own; it suits smoothly for dreamy beginners to hard-boiled entrepreneurs alike.
If you’re having questions like “How to start this business?”, “How much and what materials do I require?”, “How to streamline the supply chain and the delivery network?” – look no further.
You are in the right place. Read till the end, and you’ll be the info guru of the wholesale food supply business in absolutely no time.
Wholesale food supply system
Wholesale food suppliers buy directly from the manufacturers and producers, i.e., local farmers, agro farms, dairies, processing plants, etc. Then, they purchase bulk items and stock them in a storage facility, a warehouse. Then, it sells these items to retail sellers, organizations (offices, clubs, catering services), and institutions (schools, hostels, college canteens) for a bit higher price. This is markedly different from retail marketing; to be precise, it operates on a level higher than that.
Streamlining the wholesale food supply business: a multi-level approach
Regardless of your experience and capital, each and every business is always uncertain and quite tough to build. Most likely, you need some first-hand rundown from the ones who have walked this path before you.
So here are our top tips from top stars of the industry to make it big –
- Keep the papers clean
When commercially handling raw consumables, getting the proper license must not be forgotten. All the permits from different sectors like food safety standards, environment, fire department, and the local governing body should be acquired ASAP and soon. First, learn about the legal formalities to get these papers right and then focus on the company’s setting up and registration. Paperwork can be tricky and dull, but one stitch in time really saves nine. Also, comply with the regulations under the laws that govern food processing facilities.
- Price tags are forever.
Calculating the price of a product based on market standards is not easy. When distributing to retail sellers, you must sell it at a price significantly lower than that item’s actual market price.
Pricing techniques can be:
- Add up all your expenses for that item till selling, and then add the estimated profit margin to get the final price (absorption pricing)
- Ask yourself how much customers are gonna pay? and calculate it accordingly. This changes depending on the seasonal market. ( differential pricing)
- “Where is my cut? “
Profit margins should be good enough to feel motivated to keep going. The margins charged by wholesale food suppliers vary widely from 10%- 30% depending on the product and demand.
However, a standardized “average margin” must be estimated to work as the base level and ensure that all the operating costs are covered with space left to add a healthy margin. It helps towards sustainable growth.
- Go digital
The whole food supply chain has gone digital since the COVID-19 pandemic, and there is no going back. So why do you hustle when you get everything farm-fresh with a click? Wholesale suppliers act as middle agent between the producer and consumers. Most of the wholesale food suppliers now operate completely online, even offering their delivery system too. The focus is on the customers now as the commercial sector clients have shut down during the pandemic. Apps like Fresho, Swiggy, etc., are your next big hit in the food supply industry. These apps help to organize orders and streamline the service for both the customers and the sellers.
- Make friends who deliver
You can not just deliver all the orders if your clientele is big. Find a trusted doorstep delivery partner online. There are plenty of these services nowadays. Choose one after checking their fulfillment time, location, payment options, etc. In the long run, it saves effort and increases your sales.
- Search and research
Market analysis is THE key element of any business. Look actively for customer and partner feedback, do market research yourself or hire professionals, assess the current trends and changing demands, and focus on spots that need reinforcement. This is an active surveillance process to continue around the year. It helps to make your service better.
So that’s all. Hope you’ve found a thing or two that will help your business to grow more.
All the best wishes for this venture.
