Operators are counting on distributors’ expertise in managing the supply chain as they plan out their projects and make decisions on new equipment. But one area that is causing a lot of friction is the frequent price increases that have occurred this year as manufacturers try to contend with the fluctuating costs of materials. Tobia says he has seen as many as three price increases from some manufacturers this year, causing BRESCO to provide price protection for its customers for no more than 60 days. “You can quote a guy in March who is going to take a couple of months to figure out what the package is going to be and by the time you’re ready to roll on the project there has been another price increase,” Tobia says. “You try to cover yourself as best as you can. Often times that might cause you to lose the project but dealers need to be careful of what they commit themselves to.”


Culinary Depot has experienced similar price changes, with costs going up about every 30 days when before a product would often go six months or longer without a price change. Since most projects are bid three to six months or even a year before the equipment is purchased and installed, the timing has made it difficult to provide customers with accurate costs. “We’re just trying to overcommunicate and make sure the customers understand the situation,” Lichter says. “We’re obviously praying and hoping we get past it. Some of our vendors are very optimistic it’s going to get better soon. Others are pessimistic that it’s going to be here for a long time.”


“The goal of that distribution center is we’re trying to shift our model as much as possible from drop-ship to stock. We’re assessing stock opportunities very differently now and stocking various brands.”


— Michael Lichter CEO


Culinary Depot


To get ahead of the fluctuations, BRESCO tries to predict the price increases and asks manufacturers if they can commit to that amount. Some have been able to lock in a price for a period, Tobia says, but anything further than six months out has been difficult to nail down. “Some customers want a firm price through a certain date,” Tobia says. “A dealer in those cases has to make an educated guess. Often times the end user doesn’t want to hear it. They want the price – they want a firm price.”


Making New Friends


Although setting a firm price for a project many months out may be impossible, all three dealers say the best strategy for dealing with the ongoing supply issues is still to encourage customers to place orders as soon as possible. Even if the price changes, ordering further in advance makes it more likely the equipment will be ready when it is needed or gives dealers a chance to find an alternative product if necessary. “You just have to explain the situation,” Tobia says. “They seem to be surprisingly understanding, most of them. If you


are transparent upfront, you can urge them to make the decision and place orders.”


In those cases where the desired equipment isn’t readily available, operators have been more willing to go with a like-product from another brand or even import from overseas. “I’m definitely looking at any manufacturer,” Lichter says. “Over the last few months, our team has gotten on the phone with equipment makers we’ve never spoken with before, simply because they had a slushy machine in stock and a customer needed one.” What’s he’s discovered is that those new connections can lead to new relationships.


In April, Capobianco was working on an outdoor kitchen for a large golf club when he found out the manufacturer was waiting eight to 12 weeks for delivery – a timeline that would cut significantly into the summer golf season. Instead, he worked with the operator to source different equipment and change the plans to remove the outdoor barbecue grills. The customer’s willingness to alter the project and work


Special Issue 2021 17


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