My husband and I are "discussing" what kind of acceptable business agreement I could have with a store - I am looking to expand into a more fulltime business and want to see what my prospects are. The scenario: a store in my neighborhood that sells chocolates and candies, etc in gift form is interested in my custom cookies....fine, but my husband suggested that I show them pictures of cakes I've done and perhaps work out an arrangement whereby the store would perhaps display some dummy cakes and a brochure, etc, to drum up cake orders. What we don't agree on is the standard on how much is owed to the store for this arrangement, and the extent of their involvement? Do they simply pass on the info, and I am collecting the whole payment - in which case my husband argues that there isn't anything in it for the store owner, and I argue that the display draws people into the store and chances are they will buy something - who can resist chocolate??? He thinks I should price the cakes and then the store owner will tack on his own profit, but then what, the store is handling the order and the cake, etc...and I am stuck doing only those few standard cakes on display? Ugh...or my husband said I should charge a price and the store gets a percentage, and then he suggested 25%, whereby I flipped. 25% for what? so what kind of arrangements are typical as I am new to geting into business and don't want to fail before I have even started.
25% is a bit much, but offering them nothing will get you nowhere. Honestly... if you came to me and said I want to take up (valuable) display space in your store and my cakes will get you business I'd laugh you out of the store. BUT.. if you said I would like to partner with you and if you will allow me to display some cakes in your store, I will give you 10% of the profit from cake orders that are brought in through your store then I'd talk to you. I would have no interest in handling the orders either (the tack on his own price option). The business owner has enough to deal with with his own business, and he isn't approaching you with this... you are approaching him so I wouldn't talk about this as an option at all.
You have to give them some sort of compensation for housing your advertising media (cakes and brochures and cards).
I have had dummies in various stores (shop windows) around town. I work with a high-end lingerie store and do a couple of dummies a year for them coordinating with their window displays. They are right on the main pedestrian street and get lots of foot traffic every day.
I also do a couple of dummies a year for the best florist in town for a coordinating display in her shop window. I have a sign for my business and leave a box of cards at the shop which they then hand out.
I don't offer anything and they've never asked. It's not like I have my own display in their store, like my own corner (I would never ask for that... even with compensation), but my cakes take their window to the next level, as the cakes make people look twice..
It's a little different... these stores don't also produce food items. You aren't competing with them in anyway. A felow food service business might not want to just give you room in their store. I can see a florist or a lingerie store not minding it though.
Thanks for the advice - as it is, I just came back from the store and the guy is not interested in doing business with my cookies at my price....his comment - I can get it across the street at the bakery for less....my answer - you are NOT gettting these cookies across the street for that price, you are getting way less.....anyway, I put so much time and detail into my cookies, I refused to budge.....I guess that is the problem with going with a middleman deal where they want to buy the cookies and then resell....how much can I expect when they want to resell at a profit...I am not a bulk bakery and can't afford to give dirt cheap prices so that only the store can make a profit - what's the point? Back to square one I guess. It is so frustrating, and yeah I am depressed about it, cause I want to do business, and I know that in my area NO ONE is doing exactly my cookies - for sure not in fondant - and the only ones that are on a competitive level are larger businesses with employees...I am a one-man operation just starting out......when I sell to individual customers, people are wowed by my stuff, so I take it to the next level and get knocked back down, way down....yeah, I am having a pity party of one. I will snap out of it!