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Wedding Business Solutions Podcast with Alan Berg CSP - Caterers Bonus Episode with Trip Wheeler-SB ValuePodcast Dialogue Transcript – How Caterers Can Find Hidden Profits with Trip Wheeler

When I’m consulting with venues and caterers, just like you, we’re usually talking about ways to improve their sales and profits. Whether it’s their pricing (packages vs a-la-carte), websites or having better tours, we can always find some improvements. What about the ‘hidden profits’? Those are when you can make more money without selling any more than you are now. Imagine if you could make 10% more profit without making even one more sale. Are you curious? If you’re doing catering for weddings and events, you’re sitting on hidden profits that are yours for the taking. For this episode I’ve invited my friend Trip Wheeler, from SB Value, to share these ideas from his years of helping caterers like you. Listen to this 16-minute episode and find out how.

About Trip Wheeler and SB Value
Trip’s
Bio: I worked in sports for 20 years helping F500 companies understand how to use sports to grow their sales.  Some of my clients included VISA, Proctor and Gamble, Gillette, Miller, Coleman, Lowe’s, AT&T.  In 2008 I gathered 400 sporting facilities together to create leverage and buy better.  That’s where I found Premier.  After that we just represent the GPO side of the business because it’s such a good idea.

About SB Value: We have amassed 23,000 customers with a combined food spend of $7B. We use this leverage to negotiate better prices for our clients than any single client could get on their own.  There is no cost to join.  We get paid by the manufacturers for bringing them so much leverage.  You buy what you want. Can get out at any time. You just spend less on your food which increases your profit with no effort.

Contact Trip Wheeler
E: trip@wegrowvalue.com
P: 704.904.9000
www.WeGrowValue.com  – see how much your catering company can save

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Below is a full transcript. If you have any questions about anything in this, or any of my podcasts, or have a suggestion for a topic or guest, please reach out directly to me at Alan@WeddingBusinessSolutions.com or contact me via textuse the short form on this page, or call 732.422.6362

Please be sure to subscribe to this podcast and leave a review (thanks, it really does make a difference). If you want to get notifications of new episodes and upcoming workshops and webinars, you can sign up at www.ConnectWithAlanBerg.com

 

– When I’m working with my catering clients, we’re often working on selling more and profiting more, and one of the places that you can find hidden profits is when you’re spending more than you should be on your food and supplies. So I invited an expert on this, a good friend of mine, to talk about this and show you caterers how you can profit more by finding those hidden profits.

– Welcome to the Wedding Business Solutions podcast. Thanks so much. This is one of my special dialogue bonus sessions. And I brought in a very good friend today. Trip Wheeler from SB value. Trip, how you doing today? Good to see you Alan. So Trip and I met at the catersource conference and we got to talking about what he does and what I do. So my thing is about helping people sell more, profit more, have more fun doing it and Trip’s business is about saving you money to help you profit more. And I’m like, well, we have something in common here.

We got to talk about profit, but we do it two different ways. So selling more is one way to make more money. I talk about raising prices another way you can make more money because profit is what it is. Trip, you and I talk about that, it’s not what you make, what you keep. But, but what you help people do is learn how to control their costs in a way that doesn’t affect your outcome, doesn’t affect the products that you produce, right? Whether it’s packaged goods, which is really not what a lot of people are doing. They’re doing buffets, plated, catering, stuff like that, but also supplies and things like that.

So just real quick, just give quick thing about what you do. Just give me the elevator pitch. It is incredibly simple, Alan, you know. Big companies get a better price on things cause they spend more money. It’s called leverage. Coca-Cola buy sugar cheaper than you and me because they buy billions of pounds of sugar every year. If you bought billions of pounds of sugar you’d get the same price Coca-Cola does. We do the same thing by grouping companies together and creating leverage. So we have 23,000 companies. Some are as big as a $100 million a year in spend, the US Army, down to a small caterer who might spend $25,000 a year. We bundle all them together in the $7 billion, 7 Billion dollars, in leverage. We simply use that leverage to negotiate you better prices. And we extend those prices to our clients. That’s it. Right, so common sense. If you buy more, you can get a better price. That’s what it is. If you spent $7 billion, you’d get those prices without us. Right? But nobody spends $7 billion. No. But the US Army spending a hundred million dollars and they’re part of this group spending $7 billion, they even get a better price/we’re still saving them money.

I had a DJ the other day was telling me that he got together with another DJ and they both bought this lighted dance floor. But because they bought 96 panels instead of 48 each, they got a better price. So it’s the same idea there. So what we want to talk about today is the hidden profits. These are hidden profits. And you had said something to me, we had a conference call the other day about how if somebody makes $10,000 more in profit by saving money on their supplies and their food, in order to make $10,000 in profit if they sold more, they’d have to do what probably $40,000, $50,000? Typically in a catering business, 1/3 is profit. So if you do $90,000 in revenue, you’ll make another $30,000, give or take. It could be 20%, it could be 40%. You have to make a $100,000 in revenue, $90,000 in revenue to make $30,000 in profit. Right. And do all those other events and have all that other stuff. You have to manage the event, you have to sell the event, insure the event, everything.

So somebody joined, these are called Group Purchasing Organizations – GPOs. And the one that you have is, it’s in the US. Are there others like this around the world? There are. The one we’re with is called Premiere, and it is the one that is the best for caterers. It is the biggest, so it has the best leverage, but also it’s so big you can buy any mayonnaise, any ketchup, any mustard, any anything. We don’t want you to force you to buy a certain mayonnaise or mustard. And so when you go with a smaller GPO, they’re going to say, yeah, we’ll get you mustard but it has to be this brand, well I don’t want that brand I want Heinz. Ours, you can buy any mayonnaise or mustard and you save money on everything. So a Group Purchasing Organization , which is not just for not just food type stuff like this, there were things like this for other things around the world Medical supplies, HVAC units. I mean, everything you see at a at a high school, college, hospital, army base is all bought through a GPO. They’re buying that way.

So people listening in other countries they could look into something like this as well. And there were others like that, and there were for specific niches, I’m sure there were ones just like this. Right. So what would you say is the biggest obstacle of someone who’s listening right now, and they’ve been buying from the same supplier for a number of years and they been buying the same stuff and the same brands for a number of years; what’s the biggest obstacle of somebody going to a GPO from doing what they’re doing? Change. Yeah. Okay. We all do it. You and I, you know, both kind of car guys. We were talking about, you know, car sales in the background and your family was a Chevy family and my family, a Ford family, and I’ve owned Chevy’s but I’ve owned more Fords just because. Right. Habit. It’s Habit. That’s all it is. It’s habit. So change is hard. Yep. Fear of change. I think what’s different about this though, is if I changed Chevy dealers, I’m still getting a Chevy. Right. But if you said, change me from a Chevy to a Ford, or from a Ford to a Chevy or to a Dodge or whatever, that’s a different kind of change. So, what you’re, talking about here is I could get my Heinz ketchup. Correct. I still get my Heinz ketchup but just pay less for it. Correct. Right. And every dollar that, I’ve said this, every dollar you raise your prices without giving any more is profit you make. Every dollar you discount your prices without taking anything away is profit you gave away.

What were talking about here is delivering the same meal, using the same ingredients, but costing you less money. Correct. That’s it. It’s the exact same ketchup, it’s the same mustard. It’s the same chemical just for less money. So didn’t your dad have a saying about this? What was it? Yeah. When we started this, he was like, and we’d been at it for a little while, and he’s like, you know, “You make money when you buy”. I love it. At first, it took me a second to go, you know, he’s right. You know, you’d buy the sugar for $1 and you sell it for $2, you make $1. You pay $1.50, you’d only make 50 cents. You can’t charge more than what you can charge. Right. You can pay less. Right. And paying less, getting the same stuff. So whether somebody is part of a GPO, not part of a GPO, what are some of the ways that they could look to save on their costs? Do the same thing we’re doing. Okay. Go look at what you buy, price that with as many distributors as you can in your market, and use that information against them.

The first thing Alan, which you want to do is what’s called a “fixed price markup schedule”. So that if you’re using Benny Keith now, ask them for a fixed markup schedule. Let’s say at 7%. That way you can compare the mayonnaises and the ketchups. Because what happens is if you don’t have a fixed schedule, they’ll hide profit. They’ll make some profit 50% but on your beef, they’ll make it zero. So your beef looks really good, but you’re not paying attention to your mayonnaise where they’re making 50% profit on you. Or your paper is historically bad, disposables are historically bad, chemicals are bad. They hide a lot of profit in that stuff. So get a fixed markup schedule, get as many prices from as many distributors as you can on the exact same items, and then just compare the bottom price. It doesn’t matter if you get one or two products for free. The idea is to spend not $100,000, but $80,000. Right.

What salespeople are trained to do is to get you focused on three or four items, get you great prices on those things, and then they kill you everywhere else. You want to look at the total price of the basket of goods. It’s a little bit of a shell game. It is very much a shell game. You’re paying attention to the items that you care about the most. You’re not seeing where it’s costing you on the other side there. I had a few customers that I referred to you, and I did this because some people that I know in the industry, just very well-known caterers are part of this GPO. I was like, all right, if these people are part of it, they’ve checked this out, they vetted it. And so one of my clients was doing, I think it was about $130,000 or so and you saved them 21% on his costs. 21% is like $26,000, $27,000 a year. A year. Now that’s profit. Doing nothing. Doing nothing. Just buying what he’s buying just a better price Same stuff.

Another one was doing about $200,000 and you saved her 25%. What would you say is the average you’ve been doing? You have a lot of clients. 16%, 17%. It depends. 16%, 17%. 16%, 17% is average on everything. That’s crazy. Yeah, it is. And it’s real money I mean, our average caterer is about $150,000. So the average savings is about $24,000 per client. And what I try to tell my clients is if you do nothing but do this for 10 years, you’ll have $250,000 in the bank. But just again, these days, when, especially after last year, to make in profit, another 20, 25, $30,000 just by doing what you’re doing. And this year you could actually be more because now all of a sudden we’re going to have the busiest wedding year that we’ve had. And 2022 is going to be gangbusters. 2022 is going to be gangbusters. And this just goes, it goes on and on.

A lot of the hidden profits, you said, is, what is it called, down line? Down invoice. Down invoice. Okay. Here’s the amazing thing, Alan. A caterer buys around 150 to 200 items a week. So think about this. Really? If I go buy gasoline. I bought a gasoline yesterday. It was $2.89. If I go buy gas tomorrow, I can compare it to $2.89. But if I bought 200 items yesterday, I don’t remember what they all cost. So if I go see milk and it’s $2.89, I don’t know, did I pay $3.09, did I pay $3.89? Did I pay $1.50? There’s no way unless you have a full-time buyer to negotiate on 200 items. It’s impossible. We do that for them. So you do the comparison, item for item? Yes we do. item for item.

I remember very often I’ll be walking through the grocery store and my wife will give me a list, and she’ll say, okay, go get this. And I’m just going to buy what she says, right? I’m just going to buy what she says. I’m not even going to look at the prices. If my wife says, hey, go buy this, I’m going to buy it. That’s why I’m happily married. We’re happily married guys. Happily married guys, but you’re right, I look at the prices and it’s not something that it stays at the front of my head because I go to the grocery store, I’m going to buy what I’m going to buy. Right. I don’t want to then go to another grocery store and then go down the road. Same with gas. You know, Costco has the best gas prices yet. Right. But I have to drive kind of 10 miles to go to Costco. Yeah. So then you just start thinking, okay, well my car gets, let’s just say 20 miles to the gallon. I got to drive there and back. So now I’m going to spend a gallon of gas to go get gas. Did I really save anything? Yeah. Did I really save.

But here, the food’s getting delivered, right. Exactly right. Its all free . So now, if somebody has a local beef supplier, Organic grass-fed, you just stay with them. You don’t have to buy everything. That whole farm to table thing is such a big deal now that we totally work around that. So if your brother runs the beef yard, keep buying from your brother, if your sister runs the produce yard buy from your sister, you know. You got to keep your catering company intact in the sense that whatever you say, if I’m farm to table, you’ve got to be farm to table. And then you buy everything else, You can buy your oils and your butters and your plastic bags and all that stuff from us. You’re not going to buy local chemicals, but you still buy your beef and your poultry, your seafood locally, it’s probably fine. Right.

And is this only for food and supplies or is that also equipment? Everything in your kitchen, but we also have kitchen equipment. We have, we have way more than, I don’t want to bore you today, but it’s in your kitchen, we’ve got it. We’ve got flatware. We’ve got, but I mean, everything in your kitchen. Everything you buy from a big distributor or even a Costco or even a Restaurant Depot or those kind of people, we have everything, everything they have. Now is this, do you have to be a certain size caterer to join a GPO? No sir. Any size. Nope. And is this for all GPO’s? No. Some GPO’s are bigger. They do that, since Premiere’s so big, they can allow smaller groups in this thing. But for us it’s anybody. The only really minimum in this thing, Alan is a $350 drop size which is, by industry standards is incredibly low. As long as you order $350, they’ll deliver it to you. Yeah. If you’re having a couple of parties on the weekend. Yeah. I mean a case of steaks is $350, right? And if you’re low, just throw some paper towels in there. Right. Guaranteed you’re going to be spending that over there. And then obviously there’s no such thing as too big. If the US army is there spending $100,000,000 a year.

So the idea, if you’re not part of a GPO, and again, if you’re listening in another country you want to look into a Group Purchasing Organization. You certainly want to be looking at your costs because those are where your profits are just flying away. And you’re not even seeing it. You’re giving your profit to your food broker. Right. You’re giving it to the food broker. It’s yours, keep it. So this is like raising your prices without raising your prices. Correct. Right. That’s what it is, right? Or gaining two or three clients without having to gain two or three clients. And without having to do the parties without having to do any of that kind of stuff right there.

So if somebody is in the US, so Alaska and Hawaii also? Yes sir. Okay. So anywhere in the 50 States, Puerto Rico? No. Just the states. No, not Puerto Rico. Okay. We’re working on that though and we’re working on Canada right now, too, but we’re not there yet. Right. Well you did, I don’t believe you did Alaska and Hawaii when I first started. No we didn’t. That’s been added. Yep. Excellent.

So if somebody is interested, how would they get ahold of you to have you do that comparison for them, which is free by the way, right? Sure. I’ll just give you my cell phone and my email. My email is Trip with one P like falling down, Trip@WeGrowValue.com And my cell phone is +1-904-9000. And I’ll put this into the show notes if anybody has that over there. And if you are not in the US and you have a question, I’m sure trip would be more than happy. Oh please. I’ll tell you what we do so you can do it over there. Right. The idea is, I want to help people sell more, profit more. You want to help people profit more and have great events. And just looking at what you did for my clients it just blew me away when I’m hearing numbers like 16% being an average, just think about saving 16%. And bigger, you know, bigger companies, the bigger a company is the more you’re going to save and that’s just profit. Right. Fantastic.

So Trip, thank you so much for joining me today. Pleasure to be here always, man. I will put into the show notes if anybody has any questions, please reach out to Trip or I.

I’m Alan Berg. Thanks for listening. If you have any questions about this or if you’d like to suggest other topics for “The Wedding Business Solutions Podcast” please let me know. My email is Alan@WeddingBusinessSolutions.com. Look forward to seeing you on the next episode. Thanks.

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