Benefits Behind Minimums

Minimums. Everyone has them. Manufacturers have them. You have them. We have them. Minimums aren’t a bad thing. Companies use them to do different things: control costs, drive customer behavior, increase sales or decrease sales.

I’m sure you’ve thought about how minimums affect your business. I’ve been thinking about ours a bit recently.

I wondered what ours meant for a typical customer: one that buys weekly and whose order averages just north of 10,000 pounds per order from Dot. They buy roughly 150 different manufacturers through Dot.

How much would that same customer have to buy if they were to buy direct from each manufacturer? The number is astronomical, nearly 60,000 cases and 800,000 pounds. And that’s just one order from each manufacturer. It’s an operational and cash-flow nightmare.

For decades, Dot has worked to provide customers with easy access to our products. As long as your order meets our 5,000-pound consolidated minimum (comprised of at least 1,000 pounds of each temperature ordered), you have a one-case minimum for nearly 40,000 items.

We think it provides our customers with two specific benefits:

Cost management through improved cash-flow and reduced need for physical warehouse space.
Increased sales through a cost-effective means to answer your customers’ requests with “yes, I can get that,” instead of “sorry, I can’t get that.”
If you have questions about the impact of Dot minimums on your business or the Dot Trip Program, contact your Dot sales rep today for more information.

By Kevin Baum, Dot Foods Customer Marketing Manager

2 thoughts on “Benefits Behind Minimums

  1. Ken Cramer

    DOT either is not cost competitive nor carries all the brands necessary to always meet our 1000# refrigerated minimum. Therefore we are trying to adjust to a 2 week cycle. With shelf life a consideration, this is not an ideal solution. Eventually, as we find other sources of supply, this will probably eliminate that category from our DOT purchases. Unfortunately DOT does not seem to feel their position is non negotiable, even to a customer who becomes a t/l buyer a few times during our summer season.

    Ken Cramer – Purchasing Dept. Seashore Food Distributors 1 Satt Boulevard, Rio Grande, NJ 08242 609-886-3100 ext. 127 Fax: 609-886-7262 kcramer@seashorefood.com

    _____

    Like

  2. Hi Ken,

    Thanks for your thoughtful comment. While we don’t have any individual product line minimums, we understand that sometimes our temperature minimum policies (1,000 pounds of each temperature ordered) catch customers out.

    You’re also correct that and every-other-week order cycle diminishes some of the benefits of a redistribution strategy – especially on products with generally short shelf-life. We’re working hard to add to the more than 100 refrigerated suppliers we currently offer.

    While we may not have a perfect solution, I’ve asked our sales team to follow up with you to explore options to work with you on this.

    Thanks, as always, for your business.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s