Guarantees and Warranties
Our clients know that we stand behind all products we sell. They know that If, for some reason, the product does not meet the terms of the agreement, we will correct the problem. Our vendors know that we will not back out of a purchase order unless the product was misrepresented, no matter if our customer backs out of the purchase.
Company staff is involved in ongoing, extensive market research on a daily basis. This research is conducted by personal contact with the many suppliers and users in the foodservice industry. Recent research indicates a strengthening of demand in all Company product areas. For example, the Federal Bureau of Prisons has released population growth figures to indicate the total number of inmates is currently about 175,000 housed in 103 facilities across the country. Actual prison population growth during the five years of the Company’s operation was 66.7% (from 104,507 in 1992 to 174,224 in January 2004. The company’s emphasis on trading in distressed or surplus foodstuffs has provided a measure of insulation from the vagaries of the perturbations of the economy. During economic down periods, consumers will look for bargains in food which can be provided by the Company through its buying and selling network. During periods of strong economic growth, consumers will eat out more (FAFH), and foodservice retailers are the ultimate customers for much of the product supplied by the Company. Opportunity Sales, Inc. can capitalize on many significant opportunities which will be presented in the food distribution and liquidation industry in both strong and weak economic cycles.
Economic and Social Factors
Food Marketing System. The U.S. Food Marketing System is a complex and extensive network of channels, middlemen, and marketing activities that facilitates the production, distribution, and exchange of the nation’s food supply. This system has increased in size and importance with the growth of specialized agriculture, urbanization, and other socio-economic trends. The marketing system performs the essential marketing functions, such as buying, selling, storing, and transporting. The system adds form (by changing farm products to food products), place (by moving food/farm products over distance to consumers), time (timing and availability of a seasonal product is altered by marketing), and possession utility (created by marketing activities that assist consumers in acquiring and taking title of products). The marketing system also enhances the level of satisfaction consumers derive from these products. Of the thousands of new products introduced each year at the retail level, less than 25% succeed. Two major activities are encompassed in the food marketing system: (1) physical handling of goods and commodities, and (2) exchange and the price setting process. The first activity accomplishes moving goods and commodities from the producer to the consumer or from one stage in the food marketing system to the next. The second type of activity is necessary to exchange goods and services for money, i.e., buyers and sellers have to come to an agreement about the product and/or service they are exchanging in the market.
Food Wholesaling Industry. The Food Wholesaling Industry acts as middlemen between food manufacturers/processors and retailers. The industry moves fresh and processed food products from producers or processors to supermarkets, other food stores, restaurants, etc.. It gives retailers a wide assortment of products and sometimes short-term credit, and price savings (volume discounts). It performs storage, transportation and financing functions. With the rapid growth of chain stores, retailers have begun to exert market channel leadership over the wholesalers. Factors that determine this influence over wholesalers include size of the chain store, whether the wholesaler is independent, existence of ‘payola’-type payments, location of the retailer, etc. In fact, a lot of retailers are now doing their own wholesaling. Many full service wholesalers have formed alliances in order to ensure their survival (cooperative alliances) and increase their marketing/bargaining power.
Food Store Retailing. Development of a retail food chain concept has generated new market forces. Large varieties of food products are made available by technological advances in the commodity processing and food manufacturing industries. Improvements in transportation and communications made it possible for food retailers to successfully operate large numbers of stores located across wide geographic areas. A combination of large volume and low prices gave these stores a competitive advantage in the market. Warehouse-type supermarkets have passed some of the cost savings on to their customers in the form of lower food prices, and their popularity has led to a decline in family-run, single outlet food stores.
Food Service Retailing. Food Service Retailing is one of the fastest growing segments of the agribusiness system. It includes all those people and firms involved in serving food at hotels, restaurants, fast-food outlets, schools, hospitals, prisons, military installations and other away from home eating locations. Sales at these outlets represent over one-third of all money spent on food at the retail level.