Pricing Info Requested

Business By mommicakes Updated 9 Dec 2008 , 2:57am by Sweet_Guys

mommicakes Posted 30 Nov 2008 , 11:44pm
post #1 of 10

Hi everyone, I have been asked to make some breads and some of those fruit squares. Does anyone make these on a regular basis, and if so, would you minds haring what you are charging for them??? breads are like banana and cranberry, fruit squares will be assorted flavors. Thanks in advance for any help given. icon_smile.gif

9 replies
cakesdivine Posted 1 Dec 2008 , 12:01am
post #2 of 10

for items like that I had been taught to triple your cost. So add up what it costs you in ingredients then triple that amount. That way you pay yourself back for the ingredients, pay yourself for your time, and have money left over to either purchase more ingredients or put in your pocket icon_smile.gif

mommicakes Posted 1 Dec 2008 , 12:22am
post #3 of 10

thank you soo much. i'll try that. Thanks

FromScratch Posted 1 Dec 2008 , 12:43am
post #4 of 10

Yes, but if it costs you $3 to make a batch of bars.. you are going to charge $9 for it? That's not enough if you ask me. You have to sit down and figure it all out. If you buy your ingredients in bulk, the times 3 rule will have you making pennies. Like indydebi says.. it costs her pennies to make her cookies.. no way she is chraging pennies for them. Find out what your local market will bear. For REALLY good homemade goodies.. people will pay. I'm not saying rape them or anything.. just make sure you are not short changing yourself. It costs me about $1.60 to make a batch of bread (that's 3 loaves).. there's no way I'd only charge $1.60 per loaf (especially considering Panera charges over $4/loaf and there's are made in a huge factory).. it takes hours to make bread.

mommicakes Posted 1 Dec 2008 , 12:50am
post #5 of 10

thanks JK . I get what you are saying, I would check around here, but the only places we have here is a big box store and a grocery, and we know what those taste like. So I am going to try out further in my area. But I get it. Thanks.

Trixyinaz Posted 1 Dec 2008 , 1:22am
post #6 of 10

I ditto Jeanne! Let's take it one step further. Say that one batch of bars cost you $3 and you sold it for $9. Add in your time to go shopping and to make and clean up after that batch....let's say 3 hours total. Take out your cost of $3.00 and that leaves you $6. You just made a whopping $2 per hour. Can you live with that? I certainly couldn't.

This is how I came up with my pricing (for cakes....I don't do bread, but it would work the same)

First figure out how much it costs you to make one batch of bars. Include your packaging, boxes, ingredients, water, electricity and gas (for shopping), etc. Then mark that up...when I was in sales, we marked up our product at least 2 times....the higher the quanity, the lower the mark up.

Then, figure out how much you want to be paid for your time per hour. Then figure out how many hours it will take you to make one batch. Add that to the cost you just marked up to determine how much to sell one batch of bars.

That would be your starting point. Good luck!

indydebi Posted 1 Dec 2008 , 2:19am
post #7 of 10

I so totally do not believe in the "times 3" theory. It may work for large dollar items. For example, if I sell a catering job for $3000, then you can assume a $1000 budget for food supplies, $1000 for payroll and $1000 for profit (which actually pays the rent, the utilities, the insurance, the accountant, the licensing fees, and all the other overhead), then it might work. My payroll for a catering job usually runs under $300. So with larger items, you have a larger margin to play with.

With $6 cookies, it's just not possible. That's why small orders cost more than larger orders .... the mfg'r/baker/supplier has to cover the overhead in that small order. And you just can't do that with a $3 profit.

Using Trixy's excellent example .... $3 ingredient costs, $9 selling price, leaves you $6. The one thing that single-man-operations fail to recognize is their time is a payroll expense. IF YOU PAID SOMEONE TO COME IN AND BAKE THIS ORDER, you'd pay them, let's say $7/hour, for 3 hours. You've just paid them $21 to make a $9 order. You only have $6 to play with. You can't just pay someone "whatever I have leftover from the order".

The ingredients in our product is the SMALLEST part of the equation. Our time, talent and labor costs are the biggest factor. So to take "ingredients times 3" is shortchanging yourself from the git-go.

That's why small orders cost more. That's why many bakers and manufacturers have minimum orders. You have to cover the overhead.

And just because you may be a home baker, doesn't mean you dont' have overhead. Your time away from the family, the wear and tear on your family car, gas to get supplies, cleaning, not being able to use your kitchen to make dinner because you have a big baking order so you have to pick up KFC for dinner, etc .... those are all overhead costs.

So even if you don't have "payroll", if you expect to make a little money on the side, then YOU are your own payroll. You need to price things as if you were paying someone to come in and do it for you. It's as much a part of the cost of the product as your eggs and flour.

If you're going to operate like a business, you need to think like a business. thumbs_up.gif

FromScratch Posted 1 Dec 2008 , 2:47am
post #8 of 10

Again... all hail the great and powerful Debi.. *we're not worthy* (ala wayne and garth)

Take everything she says ans use it.. she's a great business woman.

snarkybaker Posted 7 Dec 2008 , 6:44pm
post #9 of 10

While ingredients times three isn't good guideline, labor times three is, since successful businesses need to run at no more than 30% labor cost. So unless you are doing charity work, think about a cake, bar or bread order like this.

Mixing and Baking time - a good baker makes from 10-15 per hour, cake and batch of buttercream probably take 40 minutes to make- Baking - .66X15= $10

Decorating time- Good decorators make from 12-20 dollars per hour. Decorating time = 45 minutes .75 X 20 =$15

Dishwashers make about $8.50 an hour so 40 minutes of clean up is worth around $6.

Your base labor cost is $41 for this particular item. If you multiply that times three you have a realistic retail price. Now bakers and dishwashers can multitask, reducing over all costs, but you really can only decorate one cake at a time.

Sweet_Guys Posted 9 Dec 2008 , 2:57am
post #10 of 10

We charge $1.50 per slice for our breads and $10 a loaf.

Paul & Peter

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