Preferred Vendor Lists

Business By sweetcakes Updated 2 Apr 2009 , 1:02am by FromScratch

sweetcakes Posted 1 Apr 2009 , 4:27am
post #1 of 24

i had an event facility contact me to see if i am interested in being a preferred vendor. if so there is a contract to sign stating that i will give 10% of my sales, not including rental, delivery etc within 14 days of the event. they need a copy of my insurance on file. i will be in direct contact with the bride so im not restricted on the cake sales etc. they already have 3 other cake/bakeries that are on their list, so its not like an exclusive deals. is it normal to give this kind of 'kick back'?

23 replies
FromScratch Posted 1 Apr 2009 , 10:17am
post #2 of 24

To me... if Ihave to pay you to be your prefered vendor then it means nothing to me. No way am I giving any part of my sales to anyone so they can be my pimp. I'd much rather make it on my own. It's definitely not a new concept. Venues all over do it, but it's just a means for them to make extra money. Don't feel flattered they chose you and have that weigh in on your decision. (not saying you are... just in general) The venues hope that you will feel honored they chose you and be happy to pay... yeah... no thanks.

costumeczar Posted 1 Apr 2009 , 11:34am
post #3 of 24

I don't deal with anyone who wants a kickback. I'm on a bunch of preferred vendor lists, and none of them require any kind of payment. It's up to you, though, to decide if it's worth it to you to not have to do the advertising for those brides. If it works out to about as much as you'd be paying to advertise, then it might be okay...I just don't like the "pay to play" aspect of it, and I agree that paying to be on someone's preferred list isn't being preferred at all, it's just an advertising opportunity.

Also, most venues that I know have two "preferred" lists, one that the venue gives out to brides, and one that the venue's staff (catering directors, etc.) tell brides about. If you know the people at the site they'll be referring brides to you anyway, even if you're not on their official list.

cfao Posted 1 Apr 2009 , 11:40am
post #4 of 24

I have been with one hotel as their preferred cake vendor for 19 years and never a fee. They want to cut down on the "Aunt Lucy" cakes being brought in the a relative or unlicensed person who doesn't know what they are doing. Then there are other halls, quite a few of them in fact, that either want a vendor fee per year (usually $150) or a discount/kick back like they are asking you for. They really don't care who the vendor is or if they are even licensed, they just want that $$$. If you are not on their preferred list, it is very difficult for a bride to get them to let you in to provide your service. They hand the brides a sheet with the vendors that are allowed to work at their hall, one place even has on the website that they charge the caterers and others to come into their facility as a preferred vendor, so this fee may be passed along to the customer.

cfao Posted 1 Apr 2009 , 11:56am
post #5 of 24

I just went onto one of the sites and they have the following in their rental contract that you have to agree to before they will rent the hall to you:

"Catering for all functions must be done by a hall approved company. Please be advised that we charge all catering companies a fee for the use of our facilities, which may be passed on to you."

Most of the function halls and hotels here have a clause like this in their contracts. This makes it hard on the vendors because it's not just 1 or 2 doing it, they all are. You have to decide how much you want to work at a certain place. There is one hall that was such a pain in the a** that when I said no more "discount" they said then we will take you off our list and you can't deliver here any more. They do about 150 weddings a year, I was getting about 50 of them, but the banquet manager just wasn't worth the trouble to continue that relationship. He's still there and my company is still not welcome there.

indydebi Posted 1 Apr 2009 , 1:41pm
post #6 of 24
Quote:
Originally Posted by cfao

"Catering for all functions must be done by a hall approved company. Please be advised that we charge all catering companies a fee for the use of our facilities, which may be passed on to you."



It is not unsual to charge a kitchen use fee. The facility has invested a lot of money for the equipment in that kitchen (as anyone on here with a commercial kitchen can attest to).

There is a clause in my contract that says the bride pays for all kitchen access fees or any other fee imposed by the facility. My theory: If you want to have your reception at an expensive place that charges all kinds of fees, then YOU are paying for it. I work with about 3 places that have fees like this. I tell the bride "This place charges 10% of the invoice for their kitchen use fee, so you'll see this charge on your invoice."

I dont' mind kitchen access fees. I understand the expense of maintaining a comm'l kitchen. I Don't do kickbacks.

Now you might contact the venue and ask them if this applies to drop off cakes, since you're not actually using the kitchen. One place I work with charges me the 10% when I do a catering, but not when I do just a cake drop off.

If they charge the 10% "just because" (i.e. drop off cakes), then I'd tell them to kiss my royal behind on my way out the door, and when I get a bride who wants to have a wedding there, I tell her "They won't allow me to deliver there bcause I refuse to pay their kickback fee. If you want to pay the extra 10% they'd charge me, then I'm happy to take their order."

I'm not taking the hit for anybody. Brides WILL know the why's or why not's.

cfao Posted 1 Apr 2009 , 1:58pm
post #7 of 24

The halls around here don't charge the "useage fee" to the bakeries and florists, instead you have to be on their"preferred vendor" list to be able to go there. IF a bride is able to get them to agree to let a non-prefered vendor in, in the end it just costs the bride so much they go with the flow & just use a vendor on the list. For cakes for instance, they are usually included in that hall's package. If you try to bring your own bakery in, they give them such a small allowance back it's not even worth it. Then they tack on a high cake cutting fee to cut the cake to further discourage you from bringing in an outside cake (no cutting fee if you use one of their vendors). Like I stated earlier, I have decided against dealing with one certain hall, but it's "normal" around here to run a hall like this. A couple of halls even include a list for preferred vendors for the men's tuxes, how they enforce that one, I don't know.

indydebi Posted 1 Apr 2009 , 2:07pm
post #8 of 24
Quote:
Originally Posted by cfao

The halls around here don't charge the "useage fee" to the bakeries and florists, instead you have to be on their"preferred vendor" list to be able to go there.



Sometimes it's as easy as just asking how to get on their list. There's one place in town that I can get on their "preferred" (using that term tongue in cheek) list anytime I want to pay the $300 fee to be on the list. (yeah, right! icon_mad.gif ).

And then there are the ones who just block all others out. SOmetimes I wonder if they are gaining or losing business with this policy. icon_confused.gif

cfao Posted 1 Apr 2009 , 2:23pm
post #9 of 24

I've been in business for 19 years and back when I started, there were very few places who did these lists, but once a couple of halls started and the other halls saw they could do it too, they all got on the band wagon and all have their lists. Experience does not matter to them, you can just be starting out, but if you want to get on a preferred list, it's very simple. Brides around here just accept this practice as normal and don't even question it.

mendygabriel Posted 1 Apr 2009 , 2:24pm
post #10 of 24

Out here in Los Angeles, there is no vender list fee, many hotels are different though. Some, in order to be on there list, have a set price which is significantly lower than what you would charge (they do package deals) or others simply refer you and you can charge accordingly. Some wedding coordinators asked for "discounts" but we dont deal with them kind.
Bottom line, if you have to pay forget it, but if the venue has a "package" deal then be prepared to get less for your cakes.

snarkybaker Posted 1 Apr 2009 , 3:33pm
post #11 of 24

Paying someone to do your selling for you is worth it. Paying someone to refer you can also be worth it. Why is it that you all heartily endorse Debi's referral bonus yet call referral fees paid to hotels "kickbacks".

There is a hotel about 800 ft from us that I would happily pay $500 a year to be on their preferred vendor list if they chose to start charging. They do 270 weddings a year, and we make over $12,000 a year on the weddings we do there ( most people who get married there chose a less expensive bakery). It's the same as paying to go to a bridal fair. It's getting access to brides you night not normally have an opportunity to sell.

The decision to pay for access to the list should be based solely on your ability to make money if you are on the list. It's not personal. It's business.

MikeRowesHunny Posted 1 Apr 2009 , 4:01pm
post #12 of 24
Quote:
Originally Posted by snarkybaker

Paying someone to do your selling for you is worth it. Paying someone to refer you can also be worth it. Why is it that you all heartily endorse Debi's referral bonus yet call referral fees paid to hotels "kickbacks".




Ummm, I use a referral scheme too, and the difference is that my customers are not forced to recommend me and if they do I give them a credit (5%) off their next order. They still have to order something from me to get benefit from the credit, it's not cold hard cash payment like the 'preferred vendor' schemes want!

cfao Posted 1 Apr 2009 , 4:15pm
post #13 of 24

As I stated earlier, there is one hall that I choose not to deal with and at the time I cut them loose I was getting about 50 weddings a year from them. The others ask for a yearly payment or discount to be on the list. Payments are done by company check, discounts are listed on their invoices. I write the payments off and I look at both as a company expense. For the very few halls that don't expect anything for you to deliver there, well of course I love that, but there's not many in this area like that.

FromScratch Posted 1 Apr 2009 , 5:32pm
post #14 of 24

I can see the use for it but I don't like the idea that if she doesn't use a preferred vendor the bride gets penalized. I'm all for recommending your "preferred vendors", but if a bride chooses to not use them that's her perogative no?

snarkybaker Posted 1 Apr 2009 , 5:48pm
post #15 of 24
Quote:
Originally Posted by jkalman

I can see the use for it but I don't like the idea that if she doesn't use a preferred vendor the bride gets penalized. I'm all for recommending your "preferred vendors", but if a bride chooses to not use them that's her perogative no?




Most high-end venues here don't like to serve cakes from home bakers because of the liability issues, so they issue preferred vendor lists of places they have good relationships with and are familiar with the quality etc. Some venues have a " no outside vendors" rule others have a fee for using an unapproved vendor, others have a "this is who we recommend, but whatever ?" policy. It really depends.

For someone who will allow only recommended vendors, does a LOT of weddings, and will put me on the list, we are happy to pay for the referrals. It's really not any different than buying a mailing list or paying to attend a bridal fair.

bakery_chick Posted 1 Apr 2009 , 6:14pm
post #16 of 24

I think it is a tough situation any way around it. You want to promote your business, but you also need to make money. Bottom line is that you have to decide how much it is worth to you. How many weddings a year will you get from the venue? etc. I am on several preferred vendor lists. I am also under contract to a few venues where my cake is included in the price of the wedding package, and they pay me a lot less than 90% of the price of the cake.

FromScratch Posted 1 Apr 2009 , 10:43pm
post #17 of 24
Quote:
Originally Posted by snarkybaker

Quote:
Originally Posted by jkalman

I can see the use for it but I don't like the idea that if she doesn't use a preferred vendor the bride gets penalized. I'm all for recommending your "preferred vendors", but if a bride chooses to not use them that's her perogative no?



Most high-end venues here don't like to serve cakes from home bakers because of the liability issues, so they issue preferred vendor lists of places they have good relationships with and are familiar with the quality etc. Some venues have a " no outside vendors" rule others have a fee for using an unapproved vendor, others have a "this is who we recommend, but whatever ?" policy. It really depends.

For someone who will allow only recommended vendors, does a LOT of weddings, and will put me on the list, we are happy to pay for the referrals. It's really not any different than buying a mailing list or paying to attend a bridal fair.




Do they turn away legal home bakers along with the unlicensed ones? I can understand wanting to screen for unlicensed bakers, and I actually appreciate that as a licensed home baker. I am insured so I would hope that I would have the same opportunity to participate in the referral system should I want to. (and this is all just questions... no anger or anything petty like that... you know I got much love for you Kat icon_smile.gif)

I guess I never really stopped to think about it since I have never been asked to be a preferred vendor. When you think about it, 10% of a cake sale isn't too bad or a rate. And if it's a flat rate... even better. Now if someone would only ask me right?? icon_lol.gificon_wink.gif

snarkybaker Posted 1 Apr 2009 , 11:02pm
post #18 of 24
Quote:
Originally Posted by jkalman

Quote:
Originally Posted by snarkybaker

Quote:
Originally Posted by jkalman

I can see the use for it but I don't like the idea that if she doesn't use a preferred vendor the bride gets penalized. I'm all for recommending your "preferred vendors", but if a bride chooses to not use them that's her perogative no?



Most high-end venues here don't like to serve cakes from home bakers because of the liability issues, so they issue preferred vendor lists of places they have good relationships with and are familiar with the quality etc. Some venues have a " no outside vendors" rule others have a fee for using an unapproved vendor, others have a "this is who we recommend, but whatever ?" policy. It really depends.

For someone who will allow only recommended vendors, does a LOT of weddings, and will put me on the list, we are happy to pay for the referrals. It's really not any different than buying a mailing list or paying to attend a bridal fair.



Do they turn away legal home bakers along with the unlicensed ones? I can understand wanting to screen for unlicensed bakers, and I actually appreciate that as a licensed home baker. I am insured so I would hope that I would have the same opportunity to participate in the referral system should I want to. (and this is all just questions... no anger or anything petty like that... you know I got much love for you Kat icon_smile.gif)

I guess I never really stopped to think about it since I have never been asked to be a preferred vendor. When you think about it, 10% of a cake sale isn't too bad or a rate. And if it's a flat rate... even better. Now if someone would only ask me right?? icon_lol.gificon_wink.gif




The standards for "licensing" in NC as a home baker are nothing like the standards for restaurants. The only two criteria are no indoor pets and no well water. They are never inspected after their initial licensing. We get quarterly inspections, have all sorts of sanitation and equipment requirements etc. There I know of at least one local hotel that cut off all home bakers after they got a cake that had hair all over it. ( There are no restrictions about covering your hair for NC home bakers).

Another venue I know of had a big cake from a home baker fall and when it did, someone slipped on the icing and hurt themselves. Since the home baker didn't have any commercial liability, the injured guest sued the venue instead of the baker.

The hotel where we have the exclusive actually does the selling for me. I send down the samples she requests, and voila...an order for 8 dozen cupcakes appears. They don't charge me or ask for a discount, but I'd be happy to give it. It's just like a commission for a sales person. It's just not a big deal.

FromScratch Posted 2 Apr 2009 , 12:08am
post #19 of 24

It's unfortunate that a few bad apples ruin it for the ones who really do care. The licensing standards are pretty loose in NH too (they don't even require that you don't have pets and you can have a well though it must be tested every year), but I hold myself to a high standard. I hold my license and liability insurance and am very professional. Sucks that I'd be looked over for the simple fact that I bake from home. I understand the frustration though. Do people with commercial kitchens on their property get swept under the same umbrella as the residential bakers? I am planning on making my garage into a commercial kitchen and would hate to think that even that would have me glazed over. Frustrating to say the least. If that's the case I might re-think trying to budget in a kitchen off of my property... I'd hate to sink dollars into making myself more professional only to have it not mean squat.

snarkybaker Posted 2 Apr 2009 , 12:24am
post #20 of 24
Quote:
Originally Posted by jkalman

It's unfortunate that a few bad apples ruin it for the ones who really do care. The licensing standards are pretty loose in NH too (they don't even require that you don't have pets and you can have a well though it must be tested every year), but I hold myself to a high standard. I hold my license and liability insurance and am very professional. Sucks that I'd be looked over for the simple fact that I bake from home. I understand the frustration though. Do people with commercial kitchens on their property get swept under the same umbrella as the residential bakers? I am planning on making my garage into a commercial kitchen and would hate to think that even that would have me glazed over. Frustrating to say the least. If that's the case I might re-think trying to budget in a kitchen off of my property... I'd hate to sink dollars into making myself more professional only to have it not mean squat.




We get a lot of referrals because planners like to be able to walk in with a client, and we have a nice retail space. Having a commercial kitchen would be an asset from that perspective. There are a few of the bigger bakeries that don't have retail spaces but do have commercial kitchens and they do very good business with no trouble from the large venues.

snarkybaker Posted 2 Apr 2009 , 12:25am
post #21 of 24
Quote:
Originally Posted by jkalman

It's unfortunate that a few bad apples ruin it for the ones who really do care. The licensing standards are pretty loose in NH too (they don't even require that you don't have pets and you can have a well though it must be tested every year), but I hold myself to a high standard. I hold my license and liability insurance and am very professional. Sucks that I'd be looked over for the simple fact that I bake from home. I understand the frustration though. Do people with commercial kitchens on their property get swept under the same umbrella as the residential bakers? I am planning on making my garage into a commercial kitchen and would hate to think that even that would have me glazed over. Frustrating to say the least. If that's the case I might re-think trying to budget in a kitchen off of my property... I'd hate to sink dollars into making myself more professional only to have it not mean squat.




We get a lot of referrals because planners like to be able to walk in with a client, and we have a nice retail space. Having a commercial kitchen would be an asset from that perspective. There are a few of the bigger bakeries that don't have retail spaces but do have commercial kitchens and they do very good business with no trouble from the large venues.

FromScratch Posted 2 Apr 2009 , 12:38am
post #22 of 24

My plan is to make over my garage... big picture window in the front with a sitting area to have consults and tastings and then have the kitchen in the back perhaps with a window so they can see in or a 1/2 wall... I want it to feel open. I don't want to have a retail bakery. It's more of a headache than I want to take on. Kudos to you for being able to do it. There are a few retail bakeries/coffee shops in the area I would need to open in to get enough real foot traffic and the competition would be fierce. I'm a good baker and I know I could make things that would bring people in, but you really can't make it as a bakery alone these days and having a luncheonette/bakery/custom cake shop is way more than I could take on myself.

I started in my home because I could while I got my feet wet and I always knew I'd end up in a commercial space when I could justify the cost and it wouldn't be a struggle to pay the bills (well at least not a HUGE struggle). I have goals that I have set and I am reaching them. I wish I could sink a chunk of change into a retail space. There are places available in my town that are cheap enough, but it would be a big stress right now. I'm going to keep plugging along for now. Thanks for answering my questions. I still feel a bit deflated that I have an assumed air of filth on my back simply because I bake from home, but I'll have to deal with that sterotype for now.

snarkybaker Posted 2 Apr 2009 , 12:47am
post #23 of 24
Quote:
Originally Posted by jkalman

My plan is to make over my garage... big picture window in the front with a sitting area to have consults and tastings and then have the kitchen in the back perhaps with a window so they can see in or a 1/2 wall... I want it to feel open. I don't want to have a retail bakery. It's more of a headache than I want to take on. Kudos to you for being able to do it. There are a few retail bakeries/coffee shops in the area I would need to open in to get enough real foot traffic and the competition would be fierce. I'm a good baker and I know I could make things that would bring people in, but you really can't make it as a bakery alone these days and having a luncheonette/bakery/custom cake shop is way more than I could take on myself.

I started in my home because I could while I got my feet wet and I always knew I'd end up in a commercial space when I could justify the cost and it wouldn't be a struggle to pay the bills (well at least not a HUGE struggle). I have goals that I have set and I am reaching them. I wish I could sink a chunk of change into a retail space. There are places available in my town that are cheap enough, but it would be a big stress right now. I'm going to keep plugging along for now. Thanks for answering my questions. I still feel a bit deflated that I have an assumed air of filth on my back simply because I bake from home, but I'll have to deal with that sterotype for now.




It's not even a assumed level of filth, for the upper end venues around here it's an issue of convenience for them. Home bakers can only produce " low risk" baked goods. So to be legal the hotel would have to make sure there was no IMBC, no custard, no fresh fruit, no cream cheese frosting They can limit the amount of investigating they have to do if they rely on the health department to do it for them.

A lot of places don't limit cakes to theri preferred vendors, but most the upper end ones do.

FromScratch Posted 2 Apr 2009 , 1:02am
post #24 of 24

I can see that. That's my main motivation in having the commercial kicthen... so I can offer my best products. I hate the restrictions of the homestead license, but I completely understand why they are there. Brides never seem to have an issue with my home baker status, and I haven't run into a venue who turned me away since I am licensed and insured. I am new in the biz and do low volume. I am hoping the commercial kitchen can up the number of cakes I can handle in a week.

Thanks again for indulging my questions. icon_smile.gif

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