I get a lot of business for the Jewish holidays and I am still working through my first yearly cycle with my business. Two weeks ago was Rosh Hashanah and I was overwhelmed with orders for challah (bread), not cakes and desserts. I ended up baking 50 loaves of challah in 3 days- all in one oven. That may sound great, but the profit margin on challah is very low, especially compared to cakes or desserts. Challah is also much more time and space consuming than cakes and cookies.

So, my question is, do I:

1. eliminate the challah entirely for next year
2. limit the total number of challah orders I will take
3. only accept challah orders with a cake/dessert order

All opinions are welcome!

Thanks,
Kathi

If you accept the orders WITH a cake or other item, it sounds like you will add to your baking-stress. I would limit the number of orders, especially since they are not profitable....it's never a bad thing to tell people "Sorry....I'm booked solid." It makes them aware of how popular you are and makes them get more organized to place their order early next time.

I wouldn't eliminate it totally but it's probably a good idea to limit the number you'll do from now on. You definitely don't want to lose money making a bunch of them! JMO....

I know one thing a lot of people on here do for stuff like that is charge a lot for it. That way, you still do it, people can still order it if they really want it, but you'll cut down on the people who do (and make it more profitable when you do sell it). Or, do you know another baker or shop who could use the business? Referrals are always nice.

JMHO since I only bake for DH, family and friends.

But if I was selling a popular, but unprofitable item:

1. As has been said I would drop the item.
(You're in business to make a living.)

2. Increase the price to reflect the high
labor & storage costs.
(Make the item profitable.)

3. Offer it only as an add-on to another order, but
at an icreased price. (See #2.)

HTH

It's been said before that if you are making too many and the orders keep coming that YOU aren't charging enough.

Raise the price to limit the sales.

If raising the price isn't possible due to market conditions then you have another option. You could post a sign stating that since this bread is in such a high demand and there are only so many hours for baking that you will be offering a limited quantity per day.
Only make as many as are comfortable for you.
Take orders and first come, first serve.

We are talking about the real world here, you aren't a machine.
Happy baking.
mommachris

edited once cause I am tired and can't type for beans

Geez.... I can't imagine 50 challot in a regular oven... plus all your other Rosh hashanah.

How much were you charging for them, and how large were they?

Remember, you have a unique product, and people are willing to pay more for that.

I would either not do the breads, or raise my prices alot so I would be making a profit (and a fat one at that, challah is time-consuming.

This one is easy. If you aren't making enough profit to justify baking the bread, don't offer it. The other option is raise the price to where it is profitable to make the bread.


MInette

I agree with the other suggestions.

1) Raise the price for better profit margin
2) Offer a limited number and just make it known that they are a limited edition item so make sure to get their orders in early.

I do not know what it takes to make Challot, but if it was an add on to the order I would think that may take longer. If you take a limited number of orders you can do them assembly line and bake them all at once. Not quite sure when most of them are ordered or if they can sit around for a few days before going to the customer (this may help then in the assembly line process) I would personally raise my prices. At least if you got the 50 orders you would then have the same profit margin as everything else.

raise the price!

"Due to the rise in costs I have had to increase the cost in some of my items. Sorry for the inconvience I hope to be able to serve you better.... blah blah blah"

Make the buck just like everyone else!

I agree with the other posters. Around here people are wiling to pay more for good challa.

I also did not have a lot of orders for cakes and cupcakes over the chagim. I'm hoping for an increase now, but I'm not sure what to promote!

B'Hatzlacha for the new year!

Sorry everyone, I've been out all day!

Let's see, you're right mommachris, I'm not a machine, although I was certainly starting to feel like one!

Making it into an assembly line is tough because of the process. First make the dough, let it rise, shape on pans, let rise (usually in oven- problem! ), bake, cool, package. Each batch ties up my oven for an hour and only makes 2 challah loaves. Each is about 1.5 lbs and I have been charging $5.00 each, which is already $0.75 more than any stores around here, after using Doug's overhead calcualtor I realized my profit was only about $0.50 on the non specialty loaves and I won't even confess how little I made on my special ones, since I charged the same amount! I don't honestly think I could charge enough to make it worth my while. I mean let's be realistic, who would pay $7.00 - $8.00 for a loaf of challah? Definitely not me!! And that would only mean I was making about $5.00 per hour. That's not worth the time investment for me.

I guess I will raise the prices and just not expect the orders to come in. One thing is for sure, I am only making one kind available. I started out that way this year and caved, well it can't happen next year unless I want to live in a cave!


Thanks everyone,
Kathi

People around here pay $15-$25 for a good Italian panettone bread which you can buy at the stores for $5--But, it's not fresh, it's not 'homemade' and it's just not as good; ergo, they are willing to pay a premium for a premium product.

Can they get fresh, good quality, kosher challah at the store for $4.25? (edited to clarify: from a kosher baker) I think you are underestimating what your customers will pay. I would triple the price and only offer one version at that price and quadruple the price for one (or at most two) other variation(s). If they don't order it, they are out a good quality kosher challah and you are saved the hassle. If they do order it, you make a profit. I wouldn't do it otherwise, it's simply not worth your time to offer it next season unless you make a drastic change.

Kathik says,
"I mean let's be realistic, who would pay $7.00 - $8.00 for a loaf of challah? Definitely not me!! "


Just because you won't pay $7-8 a loaf for challah, doesn't mean someone else won't. That's the hardest lesson I've had to learn in this business, and yes it is a business. Never assume. At $7-8 aloaf, you are not your customer, but I bet other people will be your customer and buy the bread at that price point.

Let me give you an example of what I'm talking about. In my shop our 2 tier whimsy cakes start at $275. That's for a cake that will serve about 25-30. Would I pay that for a 2 tier whimsy cake? NO. But let me tell you that there are plenty of people who will and we sell them left and right. Moral to the story...I am not my customer, but pleanty of other people are.

Again, I say raise the price to the point where you are making a profit and if no one orders it at that price, then there's your answer.

Minette

I would pay $10 easily for a really good challah and I'm not Jewish so it doesn't carry the same spiritual/cultural significance for me.

I once had French toast made with challah at a small diner in the Lincoln Park neighborhood of Chicago. I have tried so many different replicas of that recipe and none come close. It's gotta be the challah.

I hope you see the point I'm trying to make - a really good quality product has mass appeal and challah is something enjoyed by many outside of your faith. If you were trying to sell me gefelte (?)fish, I'd wish you well and be on my way without giving it a second thought, but challah is another matter! You're a new business who specializes in Kosher foods - once word gets out to the non-Jewish people of your city that you make really great products, you might see more of a demand.

So, don't drop it and don't underestimate your consumer. Make challah be profitable for you.

Christy

We started out making breads in the bakery and realized after we got done mixing kneading and baking we weren't making squat so we discontinued it. Now we only bake for our lunch sandwiches and catering jobs.

My customers didn't die. I still have a busy bakery all is well.

raise the price!!

I have to agree with some of the other posters that maybe you won't pay for a product, others still will. They can't bake but they know good quality and that's why they will pay.

IMHO - raise prices and limit the quantity.

Okay, I see everyone's point. I'll raise my prices and see what happens. If I get the orders, at least I'll make a profit, if not, oh well!

spring55, you're right. The whole reason I started making special cakes was because I couldn't afford to pay these prices but I wanted the cakes anyway! There are plently of people who will pay more than I will for many things. We'll see if that holds true for challah.

CranberryClo, you had me cracking up! I'm so glad I wasn't drinking my coffee yet! Yes, gefilte fish is definitely an acquired taste, that many never acquire!

Thanks again everyone,
Kathi

Okay, I totally agree with you indydebi! I've been having a depressing time of it once I realized how little, if any, money I made over this holiday.

So, now I need an indydebi type response. Tonight I started getting phone calls from people who want to know if they can order challah weekly from me. So, do I admit what a fool I've been and explain that my new price is $xxx? or what? I mean I hate to look stupid, but how else do explain raising my price by 60%?

Please share some pearls of wisdom!

Kathi

Oh I always blame it on the accountant!! "He's been looking over my numbers and boy did I get a lecture from him!"

I actually tell brides that the only reason I require a 'hold the date' deposit is ".....to keep my attorney and my accountant off of my a$$!"

It's no secret that everything is going up....eggs, dairy, CORN (which affects everything on the grocery shelf! ... see my home page on my website!) so for you to raise your pricing should not be a big surprise.

Thanks indydebi! My accountant (husband) did give me a lecture, so that's perfect!!

Kathi

Bread baking tip...

When your bread needs a warm place to rise and you don't have enough oven space, borrow some crock pots preheat them and fill with boiling water (or in my case just cook your dinner in it). When everything gets all steamy and bubbly take off the lid and use your cookie sheet/bread pan as the lid. The steam will raise that stuff quicker than you can say jack.

And I would say you are very much in demand and should limit the number you make by raising your prices.

I would EASILY pay $9-$10 for fresh challah, and so would so many people I know. Explain the labor intensive process. The sudden price hike could be an easy, "our mistake, the pricing was way out of whack." <<<<Cheryl

I, too, would pay 10-15 greens for a fresh, handmade challah. There are tons of people who would also!

Remember YOU are not your customer.