Highlighted
Community Product Host

How do you handle difficult conversations with vendors?

I frequent a very small cafe that orders coffee from a well-known local speciality roaster (whose name shall be stricken from the record). About 2 months ago, the shop started selling 12oz retail bags to customers, ordering about 10 - 15 bags a week.

 

Today, we were looking at the roast dates on bags and I was shocked - the"new" shipment they received last week was already a month old.  It turns out they've consistently been given old coffee since the beginning.

 

A month old isn't necessarily "bad," it's totally drinkable. Many people wouldn't care. But it's not ideal - fresh coffee is at its peak for about  2 ~ 3 weeks. I've worked in the industry for +10 years and that was a huge red flag. It feels like they've been bamboozled a bit. 

 

If the shop is paying top dollar for coffee beans, they should be getting a top-shelf product.

 

The owner and I talked for a bit and agreed that there should be a change. But the owner is having a hard time deciding how to approach the situation - the vendor supplies the coffee for the entire operation.

 

Have you ever dealt with a similar situation? What's the best way to talk to the vendor about the situation without potentially damaging the relationship? Is it easier to just go with another vendor? 

9 Comments
Super Contributor

Re: How do you handle difficult conversations with vendors?

The way I see it, there are two choices, and I would include both when I talk again to the owner.

 

I would approach him with a contract for ongoing purchases with the requirement that orders filled have a roast date no more than 2 or 3 weeks before the order date.  And as part of the contact, bags received with a roast date beyond that time period will be returned at no charge within x-number of days of receipt.  That return within days concept protects him from your getting a shipment and a week or two later returning bags not sold - make that clear to him as part of the negotiations.

 

And let him know that you are looking at another vendor, since you have the resposiblity to sell to your customers fresh coffee that is in fact fresh by industry standards.

Community Business Host

Re: How do you handle difficult conversations with vendors?

First of all, @JamesOng, I'm totally with you - I would never put month-old coffee beans in my French press. And I bet there are lots of other coffee snobs like me who wouldn't either.

 

@Rustler, that's an excellent plan of action once the shop owner and the vendor agree that the current crop of bagged coffee beans is unacceptable. I wonder if the shop owner is avoiding even bringing it up, though, since the vendor is (one hopes) supplying wonderful coffee for the rest of her operation and the bagged beans are just a tiny part of her business. 

 

But the converse holds true: The shop owner is the customer here and has more leverage than she seems to think. The vendor won't want to lose the shop owner's entire business over 10-15 stale bags of product. If she is in fact paying "top dollar" for bottom-shelf bagged coffee then that's where I'd start the conversation. 

Contributor

Re: How do you handle difficult conversations with vendors?

Hi,

 

The more specific your demands are the more are the chances of your input costs going up.

 

The vendor may be tempted to increase his selling price. In that case, the Cost Price goes up. So either the Small Cafe takes a hit on its margins or they just pass on the hike in costs to their clientele. 

 

That could lead to a classic case of fall in demand.

 

One way around would be to keep two varieties. One premium that will be under 2 weeks old and the other ordinary that is over 2 weeks old.

 

Coffee just like Tea or any other natural beverage has a shelf life. I have had Tea once fresh from a Tea Factory. The powder was still warm. It was awesome. None of what I have had since beats that taste. How do I put it uhm... sweetly bitter? 

Community Product Host

Re: How do you handle difficult conversations with vendors?

@Sangeethmathew and @Rustler,

 

Great feedback. I will pass it on to the owner. Especially @Rustler - if they're earnest and shop around, the buyer can keep the relationship professional and honest. The owner's biggest concern is having a sudden stoppage of product - losing the partner would mean they can't sell or produce. 

 

@Sangeethmathew, can you spell out "input costs" and " fall in demand" for members who may not be familiar with those terms?

Super Contributor

Re: How do you handle difficult conversations with vendors?

Yes, the shop owner needs to get something in writing from the vendor about the freshness of the bagged beans.  Refusing delivery of less than fresh roasted is the best way to send a message to the vendor.  There are many quality roasters out there so the shop owner shouldn't feel intimidated about raising the issue.  And I would also suggest the shop owner check around to see who else is selling those same bagged beans in their area and the roast dates.  I buy top shelf bagged beans from my local speciality market and they are ususally no more than a week old.  I have my favorite roaster that supplies the market with the fresh stuff.  However, this same market has many other "artisan" roasters with product on the shelf that is many months old.  And some don't even give a roast date which tells me they are hiding the fact their product may be old.  Fresh is key if you want really flavorful coffee drinks. 

Contributor

Re: How do you handle difficult conversations with vendors?

Hi JamesOng,

 

Sure and why not.

 

Input CostsThe total cost of producing a specific level of output is the cost of all the factors of input used. Input Costs are the cost of goods that you are selling. 

 

Fall in Demand - The basic thumb rule for Demand is when the Cost of a Product goes up its demand falls and vicca versa. Hence if the prices rise demand will fall.

Contributor

Re: How do you handle difficult conversations with vendors?

I would first want to know if there is a difference in roast dates between the 12 oz retail bags and the 5 pound bulk that the cafe sells in liquid form. If there is no difference then there are two choices.

1. Continue on continuing on since there should be no noticeable difference between a cup o joe bought at the cafe or brewed at home.

2. Halt all purchases including what the cafe brews from this supplier

 

Aternatives:

1. Buy bulk fresher dates and cafe bags for retail with their own label

2. Buy unroasted beans in 50 pound bags and give the specialty roaster a run for their own money

Community Product Host

Re: How do you handle difficult conversations with vendors?

@john-pero

 

In my experience, there is no difference in the degradation rate between a 12 oz retail and a 5 lb bulk bag. Strangely enough, the cafe gets their bulk bags fresh, it's the retail bags to customers they're having problems with. 

 

I like alternative 2, I wish they had the budget to roast their own on site. Actually, I've heard so many stories over the years of new brands emerging from very similar situations - a 3rd party "shop sourcer" (the term I used to refer to shops that exclusively carry one brand and psuedo-adopt their ethos in the process) got sick of being at the mercy of the vendor once the veneer wore off and started their own roasting operation. Are you a coffee guy, John? I used to sell roasted coffee from a home-made roaster when I was in grad school. 

 

What's the toughest vendor situation you've ever dealt with, @john-pero?

Established Member

Re: How do you handle difficult conversations with vendors?

A conversation with a vendor can be moved from a personal level to a business level by couching it in terms of the needs of the customer. By teeing up the conversation to be about inventory turnover and shelf life in terms of "a customer brought it to our attention that time between roasting and shelf sales is ________. As a follow-up to our conversation with her/him, we found that our average turnover of your product is ___ days. In checking the inventory delivery records against dating of your product, whe find that __% of the product you deliver to us is more than 4 weeks old. What can we do to improve the freshness of product delivered to us?"

 

This way, the conversation becomes a shared process improvement question - is there something you can do on the ordering side, does the vendor need to improve their inventory process or roasting scheduling?  Keeping the conversation about the end goal, to keep your customer happy, makes it not a personal conversation.  And it gives you an important talking point when looking at other vendors.  With all things there is a Golden Triangle of "time, quality, cost - pick two."