Direct store delivery means you take your product to each store yourself, instead of shipping to a distributor's or the chain's warehouse. On a DSD route you drive, deliver to each store's back door in its receiving window, stock the shelf, rotate the oldest product to the front, pull anything damaged or past date and give the store credit for it, and leave an invoice. Bread, chips, beverages and fresh foods have gone this way for decades because the maker controls the shelf. For a small maker the trade is simple: you keep the margin a distributor would take, and you pay for it in driving and shelf time. In the example below, a salsa maker's Tuesday route of eight stores earns $339 after product, credits, driver and van, about $93 more than the same jars would bring through a distributor, for five hours of work. Below is how DSD works, the money, the example, and a free calculator.
The short version
- DSD: you deliver to each store and stock the shelf, skipping the warehouse.
- At each stop: deliver in the receiving window, stock, rotate, pull damaged or past-date product, credit it, invoice.
- You keep the distributor's margin, and pay in driver time, van costs and credits.
- Credits for pulled product come off your revenue, so short dates cost you directly.
- DSD fits fresh, short-dated or fast-moving products and stores close together.
- Work out profit per stop: a stop that takes 20 minutes for one case may lose money.
- TaroStack keeps each store's orders by lot, so pulled jars show which batch they came from. More below.
How a DSD stop works
| Step | What happens |
|---|---|
| Arrive in the window | Stores receive vendors at set hours, often at the back door |
| Check in | The receiver counts what you bring against your invoice |
| Stock and rotate | Your product goes on the shelf, oldest in front |
| Pull | Damaged, short-dated or past-date product comes off the shelf |
| Credit | The store gets credit for pulled product on the invoice or the next one |
| Invoice | The store signs for what was delivered, less credits |
What stores ask of a new supplier is in selling to grocery stores requirements, and what some charge to take a new item in slotting fees.
DSD or a distributor
| Direct store delivery | Through a distributor | |
|---|---|---|
| Your price | The store's price | The store's price less the distributor's margin |
| Your costs | Driver time, van, credits for pulled product | Freight to the distributor; their spoils policy |
| The shelf | You see and fix it every visit | You see it when you visit |
| Reach | Stores you can drive to | Every store the distributor serves |
How a distributor's margin works out is in distributor margin.
An example: a Tuesday route
Saguaro Salsa Co., the made-up salsa maker in Tucson, Arizona, I use in these examples, runs 16 oz jarred salsa to eight stores every Tuesday at $5.50 a jar to the store, a jar costing $3.10 in full:
| Stop | Cases | Jars pulled | Minutes |
|---|---|---|---|
| Co-op, Fourth Avenue | 4 | 3 | 25 |
| Grocery, Oracle Road | 3 | 1 | 20 |
| Market, Speedway | 2 | 4 | 20 |
| Grocery, Tanque Verde | 3 | 0 | 15 |
| Deli, Congress Street | 1 | 0 | 10 |
| Grocery, Ina Road | 2 | 2 | 20 |
| Market, Sabino Canyon | 2 | 1 | 15 |
| Co-op, Grant Road | 3 | 2 | 20 |
| The route | Amount |
|---|---|
| 240 jars at $5.50 | $1,320.00 |
| Product cost, 240 at $3.10 | −$744.00 |
| Credit for 13 pulled jars | −$71.50 |
| Driver and merchandising, 4.9 hours at $20 | −$98.33 |
| Van, 96 miles at 70¢ | −$67.20 |
| Route profit | $338.97 |
| Per stop | $42.37 |
Through a distributor taking 25% of the store's price, the same 240 jars would pay $4.13 each, $990 in all, or $246 after product cost, with no van or driver. DSD earns about $93 more for the route, and the Speedway market, with four jars pulled from two cases, is the stop to fix first.
Get the calculator
Download the DSD route calculator. Two sheets: assumptions for price, cost, case size, driver cost and van cost; and the route, one line a stop with cases, pulled jars and minutes, giving revenue, credits, gross, and the route's profit, profit per stop and share of jars pulled. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
A route sheet says what happened on Tuesday. It doesn't say which batch the pulled jars came from, whether one store always gets the shortest dates, or what each store bought over the quarter.
How TaroStack does it
TaroStack keeps each store's orders by lot, so pulled jars show which batch they came from.
Orders by store. Each stop is a customer with its own orders, and each order records the lots it got, so you know the dates on every shelf you stock.
Returns to their lot. Pulled jars come back into the lot they left in, so a batch with a lot of pulls stands out.
Oldest first. First-expired-first-out is the default, so the oldest jars go on the van first, and a forecast shows what will expire unsold.
| The job | Route sheet | In TaroStack |
|---|---|---|
| The dates on a store's shelf | Guessed from the last visit | The lots on its orders |
| Which batch the pulls came from | Not recorded | Returns back into their lot |
| What each store bought this quarter | Added up from invoices | Each store's orders |
Lots, expiry and orders are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.