Types of Suppliers

There are many different types of suppliers out there. Before making your final supplier choice, it’s best to know what kind of business you’re partnering with and how much they have their hands on the actual product you’re getting. Knowing this information will help you strike up the ideal business partnership.

The most common types of bulk oil suppliers are as follows. These categories are typical across the board for bulk food ingredients used in manufacturing.

Types Of Ingredient Suppliers

The Manufacturer

This is the company that makes the product itself. Depending on who you speak with, there are two different versions of bulk oil manufacturers that exist: the product manufacturer and the oil manufacturer.

Product Manufacturer

The product manufacturer is the company that purchases the oil in bulk and packages it into different sizes like tankers, totes, drums and food service or retail bottles. They have large domestic storage space and full-line packaging facilities set up. They can ship you inventory by the truckload or by the pallet.

Oil Manufacturer

The oil manufacturer is the company that presses the oil. In the case of bulk olive oil, this most often is the large co-operative mills located overseas.

The Broker

A broker is an individual that sells you someone else’s product. They do not physically own or hold the product at any time. It is typically shipped from a separate warehouse directly to your facility. They receive a commission on the sale, but they are most often working as a separate sales person for many different products. In the bulk olive oil realm, most often brokers only sell full containers, because they’re most commonly importing from overseas. Brokers are very commonly used for other oil commodity items like soybean and conventional canola oil.

The good thing about a broker is that they can “shop around” with a few different manufacturers to be able to offer you competitive pricing. The good one’s are highly specialized and know they’re industry inside and out.

The Distributor

A distributor re-sells a finished product. They take full ownership of the product form the manufacturer and ship it to you from their own warehouse. They often have smaller minimum orders because, while they do buy in large volumes, they split up the product between many different customers.

The distributor will often have slightly higher product pricing than a manufacturer or a broker. However, they are a “one-stop-shop”, and can make up the difference by saving you a lot on shipping and the time it takes to order from many different suppliers.

This set up is, quite literally, the closest that you can get to adding an additional purchaser to your team. You will work with one account manager who will help you make sure that you get all of your ingredients in time for production. And if anything goes wrong, you’ve got one person to call to help you right the situation.

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