Every truckload of salvage food will have some percentage of unsalable items including those that are damaged beyond the point of reselling. In addition, some items found in your banana boxes of salvage groceries will be expired and this will pose a challenge to the re-seller. You must factor waste into your cost of goods sold.
Salvage food can and will exhibit damages including:
Packaging – Items that exhibit signs of excess handling, such as extensive box damage, dented cans and broken seals pose a challenge for the re-seller of salvage food. Cereal and dry goods which are boxed often will be dented, ripped or both. Canned goods may be missing portions of labels, dented and show signs of contamination. You must make sure that any can you intend on reselling offers original label information.
Dented cans are safe to resell and consume if the dent is not on a seam or prevalent around the lip and/or bottom seal. If air has reached the inner food…. throw this item away. Food borne illness will result from consuming tainted grocery items and this can create a liability nightmare for your business.
The general markup for food products is slim to say the least; profit is made in the quantity of food sold. If you are working on a 15-20% markup you must factor a percentage in for salvage food that you cannot sell. It is best to calculate your operating margin and then add at least 4 to 5 points to overcome the unsalable inventory you will inevitably receive with each shipment.
