Should you hire a food broker to sell your excess stock of food?

If you've got excess food stock, you've probably been told to "get a broker". Sometimes that's the right call. Often, for a one-off parcel of excess or short-dated food, there's a simpler option: sell it outright to a buyer who takes the whole lot.

This guide explains what a food broker does, how that compares with selling to a stock buyer, and how to decide. We're a stock buyer, so we have a view. We'll be straight about when a broker is the better choice.

What does a food broker do?

A food broker sells food on behalf of the business that owns it. They find buyers, negotiate, and take a cut, usually as commission.

Brokers sit between producers or importers and the people who buy from them: retailers, wholesalers, foodservice and export buyers. Some brokers represent product lines on an ongoing basis, getting them ranged and keeping them on shelf. Others focus on clearing one-off surplus.

The key point is ownership. With a broker, you still own the stock until it sells. You carry the storage costs, the date risk and the chance that it doesn't sell at the price you hoped.

What's the difference between a food broker and a stock buyer?

A broker sells your stock for you. A buyer purchases it from you.

Neither is always better. The question is what you're trying to achieve.

When does a food broker make sense?

When you want ongoing sales rather than a one-off clearance.

A broker can be the right choice if:

• you're launching a product and need it ranged with retailers or foodservice
• you want long-term representation in a region or channel you can't cover yourself
• you don't have a sales team and need one on a commission basis
• you're comfortable holding the stock and the risk while it sells

If that's you, look for a broker who specialises in your category, ask for references, and get the fee structure in writing, including what happens if the stock doesn't sell.

When is selling outright the better option?

When the stock is a problem you want gone, cleanly and quickly.

Excess food stock usually comes from ordinary business events: a cancelled order, a forecast that was too high, a label change, a discontinued line, or a retailer refusing stock with too little shelf life left. In those cases, holding on while someone tries to sell it piece by piece can cost more than it earns. The dates keep moving and the storage bill keeps coming.

Selling outright suits you if:

• the stock is short-dated and the clock is running
• you'd rather have one price than a string of partial sales
• you don't want to keep managing the stock or paying to store it
• you want one party responsible for where it ends up

What happens when you sell food stock to us?

We buy it ourselves and resell it through our own network. Here's how it works.

1. You send the details. A stock list spreadsheet (SKU, description, quantity, cost or RRP if you're happy to share, best-before or use-by dates), photos and the location.
2. We understand the situation. Why you have the stock matters. A cancelled order, a wrong label and a discontinued line each suit different buyers.
3. We check the dates. Best-before stock can legally be sold after its date if it's fit to eat. Use-by stock can't, so it has to move before the date. See our guide to best before vs use by.
4. We take your restrictions. Maybe it can only go overseas. Maybe it can be sold locally but not to your existing customers. We follow your guidelines.
5. We survey the market discreetly. John speaks to buyers who suit the stock, in different states and overseas, to find out what it's really worth.
6. We make an offer. In most cases, John makes an offer to buy all of it. If buying the whole parcel isn't possible, he gives his best advice on how to sell it.

There's no broker fee and no charge for that advice. Collection is flexible: we can arrange it or you can deliver, agreed per parcel.

Why is the market check so important?

Because one buyer's "no" tells you very little.

As John puts it: "One buyer might say the market is lousy, another buyer might not have any space left in your category, another buyer might like your product but their manager won't approve it. Another buyer might keep you hanging for two weeks, and then say that they are not interested. In my thirty years of experience, I can safely say that I have seen everything (at least twice!)"

A department-store purchasing manager can receive 200 to 300 emails a day. A cold email about your surplus is easy to miss. Knowing who to call, and what they're likely to want, is most of the job.

How do you protect your brand when clearing food stock?

By controlling who buys it and where it's sold.

The wrong buyer can hurt you. A premium brand turning up in a discount bin next to your full-priced range does real damage. So can a buyer with the right price and the wrong payment terms.

We sell to major retailers, discount chains, overseas buyers, charities, wholesalers and distributors. Each has different motivations, and we structure the deal to keep stock away from the channels you want to protect. More on that in our guide to protecting your brand when clearing stock.

Our four guarantees:

1. "We strictly follow your guidelines in relation to pricing and distribution locations."
2. "We send payment promptly, as per our agreed terms."
3. "We place a priority focus on clearing your stock."
4. "We speedily and discreetly convert your stock into cash at the highest possible price, without damaging your market position."

What kind of food stock do we buy?

Food and grocery is a big part of what we do, and we've handled parcels of every size.

Food and drink we've bought and sold includes soft drinks, confectionery, dried fruit, coffee and gravy. One parcel was 37 semi-trailers of short-dated orange juice. Another time, John bought a discontinued line of glass bottles, had them filled with soft drink by a beverage company with spare capacity, and sold the finished product to a discount retailer. Anything is possible!

There's no minimum. A small parcel is welcome, because it sometimes leads to a big one.

If your stock has a problem, such as a labelling error, damaged outers or tight dates, tell us. We're transparent with buyers about it and can often still find one.

See more on the food and grocery stock we buy and how we handle short-dated stock.

What should you send a broker or buyer?

The same information either way. The faster you send it, the faster you get an answer.

If something is wrong with the stock, such as a misprinted label or a damaged outer, say so up front. It rarely kills a deal. Finding out later often does.

Questions to ask before you choose

Whichever way you go, ask these:

1. Who owns the stock until it sells? And who pays for storage in the meantime?
2. How are you paid? Commission, fees, or margin on an outright purchase. Get it in writing.
3. What happens if it doesn't sell? With a broker, it may come back to you. With a buyer, it's already sold.
4. Where will my stock end up? Can you guarantee it stays out of the channels I care about?
5. What do you need from me? A good buyer or broker will ask for a stock list, dates, photos and the location straight away.
6. When will I be paid? Agree the terms before anything moves.

The short version

• A food broker sells your stock for you, usually on commission. You keep the stock and the risk until it sells. Good for ongoing lines and building distribution.
• A stock buyer purchases the parcel outright. One price, one deal, stock gone. Good for excess, short-dated and end-of-line food.
• We're a buyer. We don't charge a broker fee, and we follow your rules on price and distribution.

If you'd like an outright offer, tell us about your stock, email john@coorey.com or call John on 0411 430 047. You can also read who buys excess stock in Australia for a wider view of your options.