Fresh off their acquisition of Lillie’s Q, OWS Foods has made some changes to their wholesale program. For owners of BBQ supply stores, already feeling the squeeze of a slow economy, they will add more cost to their sauces and rubs.
OWS Foods runs a manufacturing operation for their own brands, those through licensing deals, and for white labeling sauces and rubs. They started operations in 1988, and were bought by an investment firm in 2020.
The first change that OWS Foods announced is that there will be a $500 minimum on all orders. The second is that they are eliminating free shipping, when it used to be available on orders over $1,000. For perspective, shipping can add in the neighborhood of 30% to the cost of the invoice.
We spoke with Steve Ray, owner of Owl’s Nest BBQ Supply, a local dealer in the Chattanooga, TN area about the changes. He often places small wholesale orders from OWS to keep their shelves stocked during the slow months. OWS is a favorite of his because it has a large selection that’s expanding with Lillie’s Q products coming soon.
It’s just another pile on that small BBQ supply shops seem to be facing daily. In Summer and Fall the $500 minimum order amount is doable, But January, February and March will prove to be a challenge.
None of my other suppliers are raising minimums, so it’s hard to see where this new policy comes from.
Steve Ray, owner of Owls Nest BBQ Supply in Ooltewah, TN
What Does it Mean for Dealers?
Ultimately, both changes are likely to drive more revenue for OWS, which means more cost to the BBQ store. The elimination of free shipping adds more unit cost on spices and rubs, while the minimum means added inventory tying up cash.
For stretched dealers, it could backfire on OWS. The large minimum could make dealers seek out other options during the winter months when they don’t need a $500 order.
It also could mean that dealers put off ordering, which leads to OWS having more inventory and lumpier cash flow. Worst case scenario, dealers will find another option all together and won’t think of OWS.