Volume Discount

If you’re looking to lower food costs without cutting corners, volume discounts might be your restaurant’s best-kept secret. It’s a simple idea: the more you buy, the less you pay per unit. But behind that simplicity lies a smart supply chain strategy that can boost your bottom line and strengthen vendor relationships.

What Are Volume Discounts?

A volume discount is a price break suppliers give you when you buy products in bulk. It rewards large purchases with lower per-unit pricing — a win-win for both parties. Suppliers save on logistics and admin time, while you reduce your cost of goods sold (COGS).

How It Works with Real Numbers

Say you regularly buy 50 pounds of cheese at ₹600/kg. Your vendor offers a 10% discount on 100 kg or more. If you double your order, that’s ₹6,000 saved monthly on just one item — and potentially thousands over a year if applied across your top ingredients.

When Volume Discounts Make Sense

Bulk buying works best for:

• Non-perishables (grains, oil, canned goods)

• Frozen items with long shelf life

• Dry ingredients with consistent usage

Fresh produce or short-shelf-life items? Not ideal unless you have high turnover or great storage solutions.

Consider These Before Going All In

• Storage capacity: Can your kitchen or stockroom handle the bulk?

• Cash flow: Do you have the upfront funds?

• Spoilage risks: Will the product stay usable long enough?

The key is to weigh savings against potential waste or inventory strain.

Smart Ways to Access Volume Discounts

You don’t need to go it alone. Consider:

• Joining a GPO (Group Purchasing Organization)

• Partnering with nearby restaurants

• Negotiating tiered pricing based on past purchase volumes

Approach suppliers with data and clear volume commitments. They’re more likely to offer discounts when they see a reliable customer.