Businesses want to partner with reliable vendors in order to be certain they’ll get deliveries on time and at affordable prices. Although the option to partner with multiple vendors is the most common one, ordering from a single distributor is a preferred choice for certain businesses. In the following paragraphs, we’ll compare the pros and cons of ordering from one distributor VS multiple vendors. Naturally, we’ll focus primarily on the restaurant industry, but the information can also be applied to other sectors of the economy. Make sure to read our guide on vendor management solutions and our post on food distribution channels.
Key takeaway: There are both pros and cons to partnering with multiple vendors versus single sourcing (using only one distributor). Managers and business owners need to research and decide which approach suits them better.
Ordering from One Distributor VS Multiple Vendors
A lot of companies need to make the strategic decision of partnering with multiple suppliers or ordering all their products from a single vendor. Both approaches have their pros and cons. In fact, even if a company has chosen one of the options, changes in the business model or operations might lead to favoring the other option. Let’s examine the main benefits and disadvantages of both approaches.
Pros and Cons of Ordering from One Distributor
Advantages of ordering from a single supplier:
- The purchasing process is far simpler compared to ordering from multiple vendors.
- Using a single vendor means building a strong relationship and easier tracking of inventory levels and deliveries.
- The possibility of software integration is also a big benefit when working with a single supplier. In fact, some distributors also offer vendor-managed inventory services (read what is VMI).
- Single sourcing often means large quantities. That’s why businesses that purchase their goods and materials from one supplier might negotiate more favorable conditions in terms of price or flexibility.
Disadvantages of ordering from a single supplier:
- Overreliance on a single wholesaler is one of the main cons of partnering with only one distributor. In case of supply chain disruptions or other problems, your business might be unable to get the necessary products.
- The convenience of partnering with only a single distributor can lead to higher prices on certain specialty items. For example, a supplier might have the lowest rates on staple goods but higher rates on imported items or products with low demand.
- Wholesalers who know they’re the exclusive supplier for a certain business have more negotiating power.
Pros and Cons of Ordering from Multiple Suppliers
Advantages of ordering from multiple distributors:
- The broad product variety and access to unique items are the main benefits of partnering with multiple suppliers. Companies that need large quantities of specialty items are likely to choose this approach. Some companies also opt for a hybrid model – they have a main distributor for staple goods and other suppliers of specialty products.
- Shopping around and purchasing from different vendors means you have the opportunity to compare prices from different suppliers. This can lead to reduced costs.
- Diversification is often associated with more stability and reduced risk. Partnering with multiple wholesalers also reduces the risk of negative impact from supply chain disruptions.
- Although ordering from multiple distributors sounds like a less convenient option, there are modern tools that help in that regard. For example, BlueCart’s Endless Aisle is an excellent example of wholesale ordering software technology for restaurant businesses.
Disadvantages of ordering from multiple distributors:
- Multiple invoices, negotiating with various sales representatives, and multiple deliveries – they can pose a challenge to the wholesale ordering process.
- The difference in quality between different distributors can be a problem. Business owners often prioritize consistency when it comes to deliveries of wholesale goods.
- Ordering from multiple specialized and broadline distributors also makes it difficult to create long-term relationships and partnerships.
Ordering from BlueCart’s Endless Aisle for Restaurants
Whether you want to partner with a single supplier or wish to order from multiple vendors, BlueCart’s platform is the right solution for your business. Our software allows businesses in the hospitality niche market to easily go through the eCommerce catalogs of wholesalers and order in bulk. Furthermore, BlueCart’s Endless Aisle also helps buyers to easily manage their inventory and create orders from multiple suppliers. Our endless aisle allows food service businesses to simply add products to their cart. The order is then divided among different vendors based on their availability, product quantities, and prices. That way, instead of going through the catalogs of multiple wholesalers, hospitality businesses can browse a single catalog with all products. From meat and dairy products to wholesale cleaning supplies, BlueCart’s Endless Aisle has products in all categories needed by the food and beverage industry. In addition to its features for inventory and order management, BlueCart also has other restaurant technology tools. That includes functionalities to calculate restaurant profit margin, recipe management features, and restaurant data analytics solutions.
Using BlueCart’s Endless Aisle as a supplier is a powerful B2B marketing tool as it can lead to more sales.
Frequently Asked Questions about Ordering from One Supplier VS Multiple Distributors
From resources on warehouse process flows to articles comparing manual VS automated inventory management, entrepreneurs and managers can find plenty of useful information on BlueCart’s website. Check out our answers to some commonly asked questions regarding using multiple suppliers or ordering from one distributor.
What Is the Difference between Sole and Single Sourcing?
Single sourcing is the practice of using only one supplier for the delivery of products and materials. On the other hand, sole sourcing refers to a situation where only a single supplier is available. Sole suppliers might offer unique products and services, such as intellectual property or very specific products that have a low supply.
Using a sole supplier is a situation that most businesses aim to avoid. It gives a lot of negotiation and pricing power to the distributor.
How Many Vendors Do I Need?
The number of distributors needed depends on a variety of factors. For example, a small business might choose to partner with multiple local suppliers that offer better customer service and flexibility. On the other hand, a large business in the hospitality industry has immense negotiating power. Thus, they might choose to partner with a single supplier in order to get better value for their money.
Generally speaking, most companies aim to diversify their list of suppliers so that they’re not dependent on a single wholesaler. However, in some cases, using a single supplier can be better fiscally due to the better negotiating position.
How to Choose Suppliers?
Partnering with distributors and managing vendors is crucial for businesses in many sectors. The two most important factors taken into account are often pricing and flexibility. Some businesses search for suppliers that can offer them the lowest prices. Others prefer to find vendors that offer excellent customer service and flexibility in terms of minimum order quantities (what is MOQ), deliveries, and other aspects. Using BlueCart’s Endless Aisle can be a great solution for businesses that wish to find distributors in different sectors. Our platform allows restaurants, hotels, and other businesses to order in bulk from multiple suppliers.
BlueCart: The Right Platform to Buy Wholesale Products
If you’re looking for a solution that allows your business to order in bulk from different vendors, BlueCart is the right choice for you. Our platform makes the wholesale ordering process easy and smooth. It’s specifically designed for companies in the hospitality sector and has additional tools for food inventory management, calculating profitability, and finding the cost of goods sold on menu items. Sign up today, and see why thousands of businesses use BlueCart as buyers.
BlueCart also has an endless aisle for wholesalers. It allows distributors to increase wholesale sales while optimizing certain business processes. Book a demo and see all of BlueCart’s functionalities for suppliers.