I received a call from caterer who would like to have me as her baker; she would be referring business to me in exchange of money.
She told me she is currently using this other cake designer I know but apparently her prices are too high for the caterer's clientele and her customers don't want to use her.
This cake designer's base price is $10.00 (!) which is more than three times what people around this area (with similar quality level) charge.
I didn't commit with the caterer to anything, I just told her I would stop by this week so we can talk a bit more.
How does getting business from a caterer normally work? do you give this person a percentaje or a flat fee or what?
Any input is highly appreciated.
I don't work with a caterer like that but I often refer people to a particular caterer and she has referred people to me. It is a give and take for us so no money is ever involved.
Some brides get their caterer first and some brides get their cake decorator first! I am often asked for referrals to other vendors and I gladly give them out to my brides. I want my brides to have a happy wedding day so I point them in the direction of good vendors.
.... she would be referring business to me in exchange of money.
Does this mean she wants you to write her a commission check for each cake order she sends her way? Does she mean she wants you to bill her for the cake (say $300) and she will invoice the bride (say $400)?
I dont' write commission checks for referred business. If I'm in a situation where I'm forced to, I tell the bride why I'm adding the upcharge. "The caterer requires a 10% fee from me so I'll be adding that to your bill." I do this for facilities who charge me a kitchen access fee and there's one place in town that requires a special service that entails extra labor. I flat out tell the bride, "Your facility charges me $xx for this reason, so I'll be adding that onto your invoice as a separate line item." This falls under the contract terms of "bride pays for any fees charged by the facility." I'm not taking the hit on MY income and I make sure the bride knows WHO is causing this fee to be charged to the bride (and it's not me!).
Some things to ask:
Is she taking the order or is she sending the bride to you for you to book the order? Will you have exclusivity with this caterer/facility? If so, are you willing/able to put all your eggs in the caterer's basket? Meaning, if you hold your calendar open for the caterer, what happens when she decides to drop you in the cold and go with someone else? Suddenly you have no bookings and no potentials.
Sounds like a bad idea to me. Plus many associations view that(kickbacks) as unethical.
If they want to earn extra money, why doesn't the caterer just order the cake from you at your normal rates, add on 20% and then tell the client a cake costs X amount of dollars. Treat it like any other bride. deposits, contract, etc, up front.
How is it any different from alcohol? We all know that if you buy a bottle of beer at a bar, you could have had a six pack for the same price at a store.
My problem with this is.......If you deal only with the caterer, will the party involved ever know who actually made the cake?
My opinion is unless you NEED help finding customers, why is this a good deal?
For several years i worked with 2 hotels; they would pay me for the cake ($300), then invoice the bride ($400). One hotel had no problem letting brides know who did their cakes-it was actually a selling point for them. I had a design book there for them, but they booked consultations directly with me. I could have the consults either at my shop or at the hotel. It worked out well.
The other hotel was....well, there was a very good reason that i discontinued servicing them!
I was approached by a caterer to provide them with cakes as well-and if i had been able to do it, i would have only agreed to a similar situation. Thing was, I would have had to do birthday cakes, etc..and I was only doing wedding cakes at the time.