Editors’ note: Trinity/HPSI has been serving United Methodist camps and retreat centers (currently more than 100) for many years and would be glad to talk with you about how they might partner with your ministry, too. Plan to chat with Rod at their booth in the Vendor Hall at the UMC National Gathering, or contact Steve directly at the email listed below. 

HOW TO SAVE MORE UNITED METHODIST DOLLARS

by Steve Claypool of Trinity/HPSI 

Our experience has shown that foodservice represents the greatest recurring purchase expenditure for most camps and conference centers, much greater than most other recurring purchase categories. Consequently, even though greater percentage savings may be found in other areas, foodservice usually offers the largest and most easily achieved savings opportunity, typically amounting to 10 to 20% off normal “street” pricing. We are pleased to have been able to help many United Methodist camps & retreat centers realize that level of savings or more.

A “street” account, historically the predominant structure with foodservice companies and distributors in other industries, allows the sales representative to set pricing at their discretion anywhere above a defined base cost level that they can get the customer to order. We have often heard of representatives with less than full integrity who “low-balled” pricing initially to “get a foot in the door,” then let prices drift up over time as the customer became loyal and trusting and the representative thought they wouldn’t notice. In one extreme case our program brought a 35% foodservice savings opportunity for a camp.

A “program” account (also called a contract or multi-unit or national account), as in the Trinity/HPSI structure, usually has a couple of service level options, with one being just like a “street” account, except for the very significant benefit that the sales representative has no ability to increase or control prices. Instead, the specified pricing structure is applied by the foodservice distributor’s computer system to each program customer’s account.  

NOTE:  Some distributors are offering what they call program accounts that incorporate deviations as described in the next paragraph, but with the continued ability of the sales representative to set prices.  Though this may be somewhat better than a traditional street account, it often just results in the sales representative’s maintaining or increasing margin.

Two main factors result in the substantial savings opportunity of a true program vs. a street foodservice account. The first is “deviations,” or allowances that have been negotiated with many manufacturers based on the tremendous aggregate volume of the organizations (under HPSI, more than 18,000) included in the overall program. Deviations serve to lower the distributor’s ultimate net cost and reduce the invoice price. On a periodic basis the distributor claims and receives reimbursement from the manufacturers for the deviations that have been passed through to the program customers. Not all items have deviations; they are much more common on processed foods than on commodity items. Some deviations are modest, while others can be dramatic, such as those for liquid eggs, paper goods, and trash liners.

The second factor is simply an attractive pre-negotiated margin schedule for all items except capital kitchen equipment that is applied to the distributor’s actual purchase cost including freight to their warehouse. Additional factors contributing to the program savings opportunity can include delivery size and prompt payment incentives and rebates.

The cost of propane is often second to foodservice as a recurring expense for camps and conference centers and sometimes, especially in the northern United States, can be even greater than the cost of foodservice. Propane prices vary widely. On rare occasions we have found camps that have pricing roughly in line with our national account pricing. At the other extreme, we have had reports of savings of $3.00 per gallon and more, and those savings can be achieved with a brief telephone call if your current propane supplier is one of our national account partners. If a transition from the current supplier needs to be made, the national account partners provide tanks with no rental charge, and there is no charge for delivering and setting up tanks.

Many other agreements are available for everything from paint, office supplies, mattresses, maintenance supplies, and sporting goods to credit/debit card processing services, first aid supplies, kitchen equipment and much more. Whatever the purchase category, however, we recommend that each camp/conference center consider each area individually and do whatever is best for your ministry. You may have a friend of your ministry who is sacrificing a reasonable profit margin to sell at a level that is better than national account pricing; or she/he may be selling to you at “street” prices, then donating $10,000 or $50,000 per year to your scholarship fund. Only you can solve that value equation and determine what is best for your ministry.

For help with any questions left unanswered or to request a complimentary analysis to identify your savings opportunities, please feel free to visit www.trinity-usa.net or to contact us at 615-672-0229 or steve.claypool@trinity-usa.net.