How Speed Gas Can Help Optimize Your Cost of Goods Sold (COGS)

In today’s competitive hospitality industry, controlling the Cost of Goods Sold (COGS) is crucial to maintaining profitability. Many venue managers focus on gathering multiple quotes and selecting the cheapest option for supplies. While this seems like a logical approach, it often overlooks a broader set of factors that influence overall business costs. At Speed Gas, we believe that optimizing your COGS involves more than just focusing on the price tag of your goods—it’s about improving efficiency and reducing hidden costs throughout your supply chain.

The Hidden Costs of Choosing the Cheapest Supplier

Opting for the lowest price per unit is a common strategy, but it can often lead to unforeseen costs that negatively affect your bottom line, it’s essential to look at the total cost of supply.

When evaluating COGS, consider these key factors:

1. Supply Chain Reliability: Can you count on your supplier for consistent stock availability without delays or shortages?
2. Delivery Frequency: Does your supplier deliver frequently enough to meet your demands without forcing you to overstock, tying up capital in unnecessary inventory?
3. Turnaround Time: How quickly can your supplier fulfill urgent orders, especially when you need products immediately for peak times?
4. Flexibility: Can your supplier adjust to last-minute changes or handle emergency orders without compromising service quality?

At Speed Gas, we focus on these aspects to ensure that our customers are getting competitive pricing and benefit from our reliability and commitment to efficient service.

A Real-World Example: How Speedgas Solves Supply Chain Issues

Consider a Melbourne restaurant group we worked with. They were overstocking CO2 bottles—holding 3 to 4 extra bottles at each venue—because their previous supplier was unreliable. With deliveries only twice a week and frequent stockouts due to driver shortages, the restaurant managers had to over-order, leading to an unnecessary surplus.

In addition, the supplier’s inability to pick up empty bottles regularly resulted in extra rental costs. This may lead to paying more than necessary for gas bottles and rental fees, simply because they didn’t have a more reliable and flexible supplier to meet their needs.

At Speed Gas, we understand that the cheapest option isn’t always cost-effective. We prioritize reliability and flexibility, ensuring that your venues are stocked appropriately, and your bottles are picked up on time, reducing overstocking and unnecessary rental costs.