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Question
Mr. Sheriff

I am located in Montreal and i have a small business who makes just one product, the main raw material is a Malanga Lila.
Because it is a small business i do not buy big quantities (5 boxes of 40 pounds every week) , my main supplier is: Sami fruits
http://www.samifruits.com/wholesale.html

That wholesaler has a supplier in Toronto called : Arc en Ciel Produce Inc.
http://www.arc-en-cielproduce.com/index/facilities

Sami fruits buys 2 or 3  palets (1 palet: 60 boxes of 40 pounds)on a regular basis
I am giving you these infos just to give you an idea of what i am talking about.

I would like to have a better control of my raw material and reduce considerably the price of the raw material. I am able to buy 1 palet ( 60 boxes of 40 pounds) on a much longer period than Sami fruits to reduce the price of acquisition .

Questions: How can i deal with arc-en-ciel produce to have a good price ? Will they sell to me even if they already have their distributors in Montreal who buy many different products while i only buy just 1 product on a longer period of time?
Or if you have a suggestion to reduce the price of my raw material?

Thank you

Answer
Dear Claude

I understand your objective is to reduce your Raw Material costs. Here are my answers to your questions

1. How can i deal with arc-en-ciel produce to have a good price ?

Answer :  Its straight forward higher the number of boxes (Order Volume) you buy better will be the deal / price that you can negotiate with them.

2. Will they sell to me even if they already have their distributors in Montreal who buy many different products while i only buy just 1 product on a longer period of time?
Answer : Arc-en-ciel do supports Food Service Outlets like yours (correct if me if you are not a food service outlet) as they have mentioned about this in their website. So i don't see a reason that will not serve you, except that the Price they offer may not be the one that they offer to Sami.

3. if you have a suggestion to reduce the price of my raw material?

Answer : There are multiple approaches to reduce your raw material cost.

        a) Co-Source - Check out in your area and talk to other Food Service Outlets and see if you can  buy from Arc-en-ciel directly, so that you both can better price and better product availability. And reduce your logistics cost too.

        b) Invest in Product Storage Facility so that you can Source a longer time thereby able to buy greater quantity, also reduce your logistics cost.  

       c) Check if "Consignment Inventory" is a possibility in your case. Let me know if you have any questions on this point.

I hope i have answered your query to your Satisfaction. Please rate me based on your experience.

Logistics/Supply Chain

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mohamed sheriff

Expertise

Transportation, Warehousing, 3PL Operations, Logistics IT, SCM Strategy and Execution

Experience

Logistic Operations and Logistic IT

Publications
Participated and presented papers at a few Leading Conferences on Logistics and SCM, Written an Article on RFID for CII Logistics

Education/Credentials
M.S in Logistics

Awards and Honors
i am Certified Supply Chain Manager from ISCEA

Past/Present Clients
FedEx, Kuhne Nagel, DHL Exel, UTI

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