How Do I Figure Delivery Pricing?

Decorating By marjiw Updated 28 Oct 2008 , 1:58am by cylstrial

marjiw Posted 25 Oct 2008 , 5:14pm
post #1 of 13

I am wondering how you all figure what is a fair price for you and your customer for delivering a cake. I have a customer that wants to know if I can deliver a cake 50 miles from here. I am not sure what to charge. Also what is a normal fee for in town delivery?

Thanks all!

12 replies
leah_s Posted 25 Oct 2008 , 5:23pm
post #2 of 13

I don't know that's there's a "normal" fee. For that kind of distance, I'd charge $1 EACH way ('cause you gotta get back home) + $20 for the time I spend setting it up. Not cheap.

jescapades Posted 25 Oct 2008 , 7:45pm
post #3 of 13

there's a website that tells the national mileage reimbursement rate. i use that to determine what to charge. my first 10 miles are free.

http://www.irs.gov/newsroom/article/0,,id=176030,00.html

indydebi Posted 25 Oct 2008 , 8:10pm
post #4 of 13

A tax benefit reimbursement fee is something totally different from a delivery fee.

My delivery fee must cover not just my gas, but the pro-rated insurance cost, wear and tear on the vehicle ... tires, added mileage which decreases trade in value, etc, .... the payroll for me or my employee to be in that car TO AND FROM the shop (because that employee does not clock out once the cake is delivered .... the employee clocks out when they return to the shop), the time I lose by having an employee gone from the shop, etc. The 50 cents a mile allowable by the gov't for mileage reimbursement doesn't even come close to covering these costs.

My rate is $1.25 per round trip mile. So for this delivery of 50 one-way miles, you're looking at $125 delivery fee from my shop.

In anticipation of the reaction, no, that's not a lot of money. I'm tying up my van and one of my employees for more than 2 hours to deliver this cake (and if it's 50 miles inside the city of Indianapolis, then it's going to be at least THREE hours worth of time!). If it's a cake that needs assembled, then I have to send someone who is more highly skilled and knows how to put a cake together (read "higher labor costs").

Even my 15 year old employees know that "time is money" around here.

indydebi Posted 25 Oct 2008 , 8:20pm
post #5 of 13

A tax benefit reimbursement fee is something totally different from a delivery fee.

My delivery fee must cover not just my gas, but the pro-rated insurance cost, wear and tear on the vehicle ... tires, added mileage which decreases trade in value, etc, .... the payroll for me or my employee to be in that car TO AND FROM the shop (because that employee does not clock out once the cake is delivered .... the employee clocks out when they return to the shop), the time I lose by having an employee gone from the shop, etc. The 50 cents a mile allowable by the gov't for mileage reimbursement doesn't even come close to covering these costs.

My rate is $1.25 per round trip mile. So for this delivery of 50 one-way miles, you're looking at $125 delivery fee from my shop.

In anticipation of the reaction, no, that's not a lot of money. I'm tying up my van and one of my employees for more than 2 hours to deliver this cake (and if it's 50 miles inside the city of Indianapolis, then it's going to be at least THREE hours worth of time!). If it's a cake that needs assembled, then I have to send someone who is more highly skilled and knows how to put a cake together (read "higher labor costs").

Even my 15 year old employees know that "time is money" around here.

Mencked Posted 25 Oct 2008 , 8:39pm
post #6 of 13

I'm in a small town, actually in the middle of nowhere, and have to drive several miles to any wedding I do a cake for. I've set my delivery prices according to what others charge around here for delivery. I charge .50 per mile one way. May sound cheap to some, but normal in my part of rural Oklahoma.

KoryAK Posted 25 Oct 2008 , 8:45pm
post #7 of 13

I'm $2.50/mile one way.... basically the same as Indydebi. Until September, it was only $2.

indydebi Posted 25 Oct 2008 , 8:46pm
post #8 of 13

That works out to 25 cents a round trip mile .... which barely covers the cost of gas and I'd be paying the driver of the van out of my pocket instead of out of the cost of the cake.

And delivery IS part of the cost of the cake. As much a part of it as the eggs and oil.

Mencked Posted 25 Oct 2008 , 9:01pm
post #9 of 13

I have very low overhead as in no employees, or rent, or even utilities--I live at least 35 miles from everywhere I deliver so my delivery fee for every cake I make to the closest town is about 35 dollars (.50 one way) maybe I stated that wrong initially? Anyway, I try to make all of my deliveries on Tues. or Thurs. for simple sheet cakes and so only add on about $5 for basic sheet cakes, etc. (spread the delivery fees over all). When you truly live in the middle of nowhere where the cost of living is extremely low, you can charge less and have to in order to remain competitive. My gas is covered as is my time (at least in my opinion) and because I also get to write off my mileage for my other job it works for me.

pinkbox Posted 25 Oct 2008 , 10:22pm
post #10 of 13

Im in a small town too... I charge $35 in the city of Victoria.. (most things are 10 min or less) anything 15 miles out I charge $1 per mile to and from.

marjiw Posted 26 Oct 2008 , 3:23am
post #11 of 13

Wow so many different pricing. I was thinking of charging $100 for the trip because not only is gas high I feel my time is valuable too. Thanks so much for all the information! You all are the best!!

izzybee Posted 26 Oct 2008 , 5:59pm
post #12 of 13

I charge $25 per hour plus .60 per mile round trip.

I offer free delivery within 10 miles for orders over $100.

cylstrial Posted 28 Oct 2008 , 1:58am
post #13 of 13
Quote:
Originally Posted by izzybee

I offer free delivery within 10 miles for orders over $100.




Izzybee -- I like this policy of yours!

Thanks to everyone else for sharing as well!

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