Commercial Accounts What Type & How Did You Get Them?

Business By poshcakedesigns Updated 9 Jul 2008 , 12:20am by snarkybaker

poshcakedesigns Posted 7 Jul 2008 , 1:57pm
post #1 of 11

I've seen several post where businesses are talking about commerical accounts.

Can you tell me what you sell to them and how did you get them? Are they worth the effort?

I am licensed & work from a commerical kitchen - I was just curious about this.


thanks icon_lol.gif

10 replies
loriemoms Posted 7 Jul 2008 , 11:57pm
post #2 of 11

I have been approached by several restaurants and tea rooms to sell cakes and I could never figure out how much to charge them. There is some formula for selling to these places so YOU make money too, but I have read conflicting things. Would love to hear more what others say on this.

indydebi Posted 8 Jul 2008 , 12:33am
post #3 of 11

From my background in manufacturing and corporate america in general ....

Wholesale pricing is given when the order is large enough and consistent enough to enable YOU to see some cost savings, and therefore being able to pass those savings on to your wholesale customer.

Just because someone is going to resell those 6 dozen cookies doesn't make it a wholesale order ... it's just an order.

For example, with a large and consistent order, you are now able to buy flour in 50 or 100 lbs bags .... at a cost of 6 cents a cup instead of 19 cents a cup at the grocery.

With a large and consistent order, you can operate your oven at full capacity, baking 175 cookies at one time instead of running the oven for only 12 cookies, while using the same electricity whether it's 12 or 175 cookies that are in the oven. The electric bill is the same, but your income is only 12 cookies worth instead of 175 cookies worth.

With a large and consistent cookie order that I have, I am able to get my cake supply store to order me boxes in bulk at about $0.60 a box, instead of me paying retail of $1.15 per box.

I've seen threads in which it's been suggested that "wholesale is 40% cheaper". Sorry .... only if they are ordering enough that I can save way more than that in my costs.

In my business experience, wholesale means you are buying a way bigger volume than the normal customer. Somehow, the term wholesale has come to mean "i just want to buy 2 or 3 direct so you HAVE to give me a lower price."

My cookie order to the car dealership ... they are using 300 cookies each and every single day .... 1500 cookies a week ....., so I have NO PROBLEM giving them a rock bottom price. And when someone tries to get a lower price by telling me they want to buy a "Lot" .... I get a smile on my face and ask them "how many hundred per week are you thinking?" ... it's fun to watch them back pedal and try to sell their little 5 dozen to me as "a lot". icon_lol.gif

loriemoms Posted 8 Jul 2008 , 11:27am
post #4 of 11

Very good information! My biggest problem has been is they want to sell very large slices so a 10 inch cake will serve like 6-8 servings. I have no idea how to price that. Granted, there isn't as much decorating involved, as this is often a torted cake with just some pretty swirls on top or something. My problem has been exactly as you are saying: Volume. I have gotten some larger volume requests, but just don't have the facilities to handle it...or its not enough of a volume to make it worth it.

indydebi Posted 8 Jul 2008 , 1:34pm
post #5 of 11
Quote:
Originally Posted by loriemoms

Very good information! My biggest problem has been is they want to sell very large slices so a 10 inch cake will serve like 6-8 servings.



that doesn't matter to you. You have a price per cake and that's the price. Now, you MAY have come up with that price by figuring a price per serving times the number of servings YOU are going by, and those servings may differ from what THEY plan on serving from it, but makes no difference whatsoever on YOUR price of the whole cake.

They are welcome to cut it any size they want.

loriemoms Posted 8 Jul 2008 , 2:25pm
post #6 of 11

ah you make it sound so easy! hahaha! But as you say, the key is the volume...and handling volume is the hardest part!

BrandisBaked Posted 8 Jul 2008 , 3:58pm
post #7 of 11
Quote:
Originally Posted by indydebi


My cookie order to the car dealership ... they are using 300 cookies each and every single day .... 1500 cookies a week ....., so I have NO PROBLEM giving them a rock bottom price. And when someone tries to get a lower price by telling me they want to buy a "Lot" .... I get a smile on my face and ask them "how many hundred per week are you thinking?" ... it's fun to watch them back pedal and try to sell their little 5 dozen to me as "a lot". icon_lol.gif




Would you mind telling us how much you are selling the cookies to the dealership for vs. your cost? That's an awful lot of cookies every day... just wondering how much a dealership is willing to spend, and how low you are willing to go on your pricing for volume orders.

indydebi Posted 8 Jul 2008 , 10:17pm
post #8 of 11
Quote:
Originally Posted by BrandisBaked


Would you mind telling us how much you are selling the cookies to the dealership for vs. your cost? That's an awful lot of cookies every day... just wondering how much a dealership is willing to spend, and how low you are willing to go on your pricing for volume orders.




My retail price is $6/dz. I sell to them at $3/dz. We recently set up an arrangement that I put the cookies in ziplok bags, and then transport in returnable containers (the cookies are delivered to the main dealership, then their courier guy takes each container to the other 3 locations). This reduces my cost of boxes. The courier picks up the empty containers when he delivers the next day. Hubby works there and he is my delivery man! (So his mileage to work every day is deductible since it's a delivery! icon_biggrin.gif ).

With a double convection oven, I can bake 300 cookies in 30 minutes. It actually takes me longer to wait for them to cool so I can package them than it does for me to bake them. I have 3 high school girls come in twice a week to make hundreds of dough balls, so all I (or my other 2 girls) have to do is take them from freezer to oven.

They spend between $1500-$2000 a month on cookies for 4 dealership locations. Their clientele is very high end .... when I had to stop making them for about a year, their customers complained ... directly to GM!

Because I'm in there, I get lots of orders from the employees and the customers, including a few weddings.

melodyscakes Posted 8 Jul 2008 , 10:54pm
post #9 of 11

ohhh, drooling.

love sending them with hubby, hehe

mjcakes Posted 8 Jul 2008 , 11:20pm
post #10 of 11

Indydebi, you are the rockstar of this forum!
What lucky staff you have to learn from you.
Thanks for all of your wisdom!

snarkybaker Posted 9 Jul 2008 , 12:20am
post #11 of 11

We provide breakfast pastries for a couple of local hotels. I don't make much money on them, BUT it takes the same amount of time to 40 cinnamon rolls as it does 80, and because I have that income every morning, the labor on the RETAIL pastries in my store is now ZERO, so while I didn't make much on those wholesale pastries, I have tripled my profitability on MY morning pastries, plus their breakfast buffets say " Breakfast pastries by Sugarland", so every hotel guest is exposed to my store.

They approached me. I met the general manager at a Chamber of Commerce event. " Fresh" and "Local" are very important around here.

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