CakeDiva73 Posted 19 Sep 2009 , 6:37am
post #1 of

I am wondering if it is standard practice to split the price of baked goods when selling them from a restaraunt/coffee shop? For instance, if I pay for ingredients and make/package items (legally, of course) and then the shop sells them for $3.00 a slice, we each get $1.50.

This has been proposed to me and at first, it seemed like not such a great idea since I have to pay for ingredients and do all the baking, and then we split it 50/50 but if you take into account the ingredient cost, it's more like 60/40 (maybe worse).

I understand that there are considerations that need to be made since the shop is the one with the rent, overhead, laibility, actual location, etc - so perhaps this is the norm and just part of the climb of getting your name 'out there'. Any opinions? Thanks. icon_smile.gif

21 replies
peg818 Posted 19 Sep 2009 , 9:02am
post #2 of

what i have done in the past, is set my price and the store marks up from there. If you are happy with 1.50 then they can sell for whatever they want, if they could sell the bake goods for $5 a slice it shouldn't matter to you.

Now if you say are giving them 2 dozen cupcakes and only 1 doz sells and then you only get paid for the stuff that sells and not the whole lot, that is a totally different situation

Jen80 Posted 19 Sep 2009 , 9:49am
post #3 of

Decide what you want per slice, then let them put whatever mark-up they want on it. If they don't sell them, they'll have to reduce their mark-up.

cylstrial Posted 19 Sep 2009 , 11:48am
post #4 of
Quote:
Originally Posted by Jen80

Decide what you want per slice, then let them put whatever mark-up they want on it. If they don't sell them, they'll have to reduce their mark-up.




This is definitely the way to do. You still have to get paid. So if you want to sell it to the store for $2 each - and they raise the price to $4, that's fine. They can do whatever they want with it after you sell it to them. But make sure that your price is worth your while and that you are making a profit!

indydebi Posted 19 Sep 2009 , 12:27pm
post #5 of

Sounds like you're selling on consignment? "WHen" they sell, you get your half? Not when you're dealing with perishables. As said above, set your price then they can sell it for whatever they want.

When I buy supplies from Sysco, they have a set price and I sell my stuff for whatever I want. Sysco doesnt' wait for me to sell it before they get "their half".

cakemaker30 Posted 19 Sep 2009 , 4:53pm
post #6 of

I started selling cookies and things at a place close by me. When we first started, we were kind of doing a test run so whatever they sold, they would keep 10% of the amount and I got the rest. Once we both saw that they were selling really well we decided to change it and I just sell them directly to them for the price I want and they mark it up and sell it for what they want to get out of iticon_smile.gif

CakeDiva73 Posted 19 Sep 2009 , 7:30pm
post #7 of

Well, I was hoping to sell my stuff out of their location rather then just selling it to them. I don't have a problem selling individual cakes, etc to the restaurants for a set price and then they can triple it - I am okay with that but then it makes me kind of a wholesale baker. It doesn't really promote my name and I am thinking that there must be a more generous deal (for the restaurant) in order to get a "CJC Cakes' now at 'Ripon Kitchen Cafe' type situation.

If you are selling the cake to the restaurant for them to sell, how much do you discount? I am assuming you cant charge the normal amount but do you take into consideration what they can sell it for to determine your price? Or do you just think, 9 inch carrot cake with cream cheese frosting costs $7 in ingredients so I sell for $20 (or whatever)?

I'm sorry if this is a boring question - I just can't seem to figure out what is appropriate. I have another cafe wanting to pay only a few dollars above what she considers my ingredient cost for the cake, like maybe $12 for the carrot cake, so she can sell them for $3 a slice. My problem is it's not WORTH it for me to make a cake and after cost, only make $5.
thanks

cakemaker30 Posted 19 Sep 2009 , 9:20pm
post #8 of

I charge my regular price to the place I sell my cookies to. They can decide if they think they can get more for them if they want toicon_smile.gif She also lets me put my name on the packaging so that people know they come from my shop. She's not trying to make a fortune off of me though, just have some different options.

xstitcher Posted 19 Sep 2009 , 9:24pm
post #9 of

Ingredients are only a small part of the equation. Your time (labour) is what you need to get paid for. Just like for example a mechanic. Any time I go to the mechanic the majority of the bill comes from labour not parts. The same should apply for cakes. What I would do is account for all my costs (like ingredients, utility bills, gas for your car to go shopping for the supplies, any non-edible items such as cake boards etc) then I would account for my time. This would include such things as (actually baking/decorating, time you spent shopping and traveling to the store, clean up etc). You could always give yourself a hourly rate that you would be comfortable with.

Tellis12 Posted 19 Sep 2009 , 9:43pm

I"m so glad you asked this question. I've been trying to figure out this exact thing. The woman I'm hoping to work with wants me to tell her what I'd sell it to her wholesale and also what I'd ask per slice if I were to sell consignment. I was thinking consignment but after this I'm wondering if just selling it to her and letting her do what she wants with it is the best idea.

CakeDiva73 Posted 19 Sep 2009 , 10:33pm
Quote:
Originally Posted by cakemaker30

She's not trying to make a fortune off of me though, just have some different options.




Therein lies the difference! icon_smile.gif My lady has made it clear that I am apparently a cash cow and if I do this, it will save her shop. She likes to make more than double her money so if I sell something to her for $1 - she needs to re-sell it for $2 and that is almost never realistic for our locale.

LaBellaFlor Posted 20 Sep 2009 , 12:23am
Quote:
Originally Posted by CakeDiva73

Quote:
Originally Posted by cakemaker30

She's not trying to make a fortune off of me though, just have some different options.



Therein lies the difference! icon_smile.gif My lady has made it clear that I am apparently a cash cow and if I do this, it will save her shop. She likes to make more than double her money so if I sell something to her for $1 - she needs to re-sell it for $2 and that is almost never realistic for our locale.




If you feel she see's you as a cash cow, doesn't that make the alarm go off for you? Unless you get great wholesale prices & can crank out some baked goods like a manufacturing line, how could selling anything on your end for a $1 make you money? I see that you see thats not realistic, so doesn't this sound like a bad idea?

LaBellaFlor Posted 20 Sep 2009 , 12:25am

Keep in mind I'm a homebaker, so I'm coming from that perspective. The best prices I get is what I find at Sam's Club. I don't buy wholesale & even if I did, I still couldn't sell wholesale.

CakeDiva73 Posted 20 Sep 2009 , 12:31am
Quote:
Originally Posted by LaBellaFlor

Quote:
Originally Posted by CakeDiva73

Quote:
Originally Posted by cakemaker30

She's not trying to make a fortune off of me though, just have some different options.



Therein lies the difference! icon_smile.gif My lady has made it clear that I am apparently a cash cow and if I do this, it will save her shop. She likes to make more than double her money so if I sell something to her for $1 - she needs to re-sell it for $2 and that is almost never realistic for our locale.



If you feel she see's you as a cash cow, doesn't that make the alarm go off for you? Unless you get great wholesale prices & can crank out some baked goods like a manufacturing line, how could selling anything on your end for a $1 make you money? I see that you see thats not realistic, so doesn't this sound like a bad idea?




Well, yes, that's why I am trying to avoid selling to her altogether but there are other cafe's that I don't think are so rigid and may be more willing to see the potential for mutual profit.

That is why I was trying to find other CCers who might have some experience and can therefore give me some advice on pricing. I'm not a wholesale baker and can't get my stuff in bulk, etc.

CakeDiva73 Posted 20 Sep 2009 , 12:34am

Actually, I can get it in bulk but really have no ability to store 50 pounds of flour icon_smile.gif But more importantly, I can't sell in bulk.... I was under the impression that you usually discount if someone buys alot - say 10 dozen cookies, or a standing weekly order, etc.

And Sam's Club is my bff too but even with that, I can't match baking vendors.

cakemaker30 Posted 20 Sep 2009 , 3:50pm

Cakediva73: I sent you a PM with the pricing information, but I just wanted to add something else. If this woman is saying that by selling your baked goods it would save her business I would definitely run the other way as quickly as possible. icon_biggrin.gif If she's not making money right now and in jeopardy of having to close down, you don't want to sink in the ship with her. icon_lol.gif As far as other approaching other cafe's I would definitely try to find someone that you feel comfortable working with and that doesn't give you an uneasy feeling about how they want to do business. I've turned down quite a few offers that could have potentially gotten my name out there because I just didn't feel right about the circumstances or the owner gave me an uneasy feeling in my stomach.

leah_s Posted 20 Sep 2009 , 3:53pm

I would also caution you to verify that you can wholesale under whatever your current licensing is. I can only retail to the consumer under my catering license. If I wholesale, I need a manufacturing license and those rules are different.

CakeDiva73 Posted 20 Sep 2009 , 5:54pm

Is it wholesale if I sell to a restaurant? I know when I got the license information they asked about wholesale and I said no.

Doug Posted 20 Sep 2009 , 6:02pm
Quote:
Originally Posted by CakeDiva73

Is it wholesale if I sell to a restaurant? I know when I got the license information they asked about wholesale and I said no.




yes, as you are selling to them so they can resell it.

retail = direct to final user/consumer

wholesale = sale to a reseller

LaBellaFlor Posted 20 Sep 2009 , 6:04pm

Yes. If you sell to anyone, who is then going to turn around and sell your products at a mark up, you are their wholesaler.

CakeDiva73 Posted 20 Sep 2009 , 6:15pm

ok - thanks! I did not realize that. I will have to check into what is involved in adding this to my license or seeing if it is even worth it.

Swmillbrook Posted 20 Nov 2013 , 8:55am

We're a farm equipment business. we have a vending license. I want to start selling this friend of mines homemade cakes. What should I pay her for making them? (Pound cakes)

 What's a fair price?

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