Newbie Pricing Question

Business By TheGoods Updated 16 Oct 2009 , 11:33am by cylstrial

TheGoods Posted 3 Oct 2009 , 2:10pm
post #1 of 11

Hello all! I'm new to this forum and new to selling baked goods. I'm planning on getting licensed so I can sell pies and baklava to restaurants in my area (a suburb of DC). I use only organic ingredients which can be super pricey and am wondering if the rule of 3x your cost still applies. I have a 9" coconut cream pie for example that costs me $8 for the ingredients alone. $24 for a pie seems like a lot of money though. What's reasonable to charge?

Oh, and one more question- should I sell to restaurants at a different price than I would to individuals? I'm thinking of selling my pies and baklava over my website too (will deliver for free locally). I'd be grateful for any advice.

Thanks!

10 replies
minicuppie Posted 5 Oct 2009 , 5:41pm
post #2 of 11

Ok, I take this one. Newbie...there are hundreds of topics with thousands of posts that will cover all your questions. I am not being mean...it's just these same questions are asked every day and it gets a bit tiresome answering them over and over. Case in point...are you wondering if you should tell customers that your cakes are made from a box? Go to the search option and key in scratch vs box mix. Or your question re costs vs how much you should charge for "this cake" insert any picture of a beautifully decorated cake or dessert. My suggestion is one that was made to me when I was starting out....read. Read every word on every topic on as many baking sites that you can find. Watch some utube videos. You will find at least one on every technique you are wondering about and some that you had no idea even existed. Good luck and happy hunting!

-Tubbs Posted 5 Oct 2009 , 6:47pm
post #3 of 11

I would question whether restaurants will be prepared to pay premium prices to buy your items with organic ingredients. First you must ensure you have a market for your goods. Have you approached any with samples? Maybe you could concentrate on whole-food type places? You may find a better market by getting a regular table at a Farmer's Market or similar, and selling direct to people who would be prepared to pay for homemade and premium ingredients. I'm sorry to say that the restaurants are probably used to buying pretty good stuff frozen from the food wholesalers.

indydebi Posted 5 Oct 2009 , 7:08pm
post #4 of 11

welcome to CC and all things cake! minicuppie is right, you will find LOTS of great info on this forum. I'd say settle in with a big glass of iced tea for a couple of hours and browse away!

Knowing your market is key. Don't rely on friends who love your pies and keep telling you "You should start a business!" You'll come across lots of threads where folks say that but when it comes to actually PAYING for the pies, these same friends are no where to be seen.

The "times 3" theory is a falicy (sp?), simply because the cost of ingredients is NOT our biggest expense. Example: From mixing to delivery, a simple 8" 2-layer round cake can take about 3 hours. My ingredient costs are about $6. Under the "times 3" theory, I'd sell this cake for $18. But I've paid a kitchen staffer $10/hour x 3 hours = $30. I'm $12 in the hole. Even if I pay someone (and that "someone" can be ME!) only $7/hour, that's still $21 in payroll, leaving me $3 in the hole.

Pricing is the part of this biz that we ALL hate to deal with so welcome to the club! thumbs_up.gif

leah_s Posted 5 Oct 2009 , 9:35pm
post #5 of 11

And you will have to be licensed and legal before you sell to a restaurant. And you'll need liability insurance and need to be incorporated.

cakesweetiecake Posted 13 Oct 2009 , 3:06pm
post #6 of 11
Quote:
Originally Posted by indydebi

welcome to CC and all things cake! minicuppie is right, you will find LOTS of great info on this forum. I'd say settle in with a big glass of iced tea for a couple of hours and browse away!

Knowing your market is key. Don't rely on friends who love your pies and keep telling you "You should start a business!" You'll come across lots of threads where folks say that but when it comes to actually PAYING for the pies, these same friends are no where to be seen.

The "times 3" theory is a falicy (sp?), simply because the cost of ingredients is NOT our biggest expense. Example: From mixing to delivery, a simple 8" 2-layer round cake can take about 3 hours. My ingredient costs are about $6. Under the "times 3" theory, I'd sell this cake for $18. But I've paid a kitchen staffer $10/hour x 3 hours = $30. I'm $12 in the hole. Even if I pay someone (and that "someone" can be ME!) only $7/hour, that's still $21 in payroll, leaving me $3 in the hole.

Pricing is the part of this biz that we ALL hate to deal with so welcome to the club! thumbs_up.gif




Great advice! I've always heard of that times 3. lol!

cylstrial Posted 13 Oct 2009 , 6:08pm
post #7 of 11

Here's a list of cake central acronyms to help you get around in the forums!
http://www.cakecentral.com/cake-decorating-ftopict-2926.html

prterrell Posted 13 Oct 2009 , 6:56pm
post #8 of 11

Free delivery is a bad idea UNLESS you've incorporated the cost in terms of wear and tear on your vehicle, gas and your time (time delivering is time you could be baking) into the prices of your products.

cylstrial Posted 13 Oct 2009 , 8:02pm
post #9 of 11
Quote:
Originally Posted by prterrell

Free delivery is a bad idea UNLESS you've incorporated the cost in terms of wear and tear on your vehicle, gas and your time (time delivering is time you could be baking) into the prices of your products.




Agree! Most people on here charge at least $1.00 a mile in order to cover the rest of the costs. And don't forget, it's round trip.

TheGoods Posted 15 Oct 2009 , 1:36pm
post #10 of 11

Thanks for all the helpful info, everyone!

cylstrial Posted 16 Oct 2009 , 11:33am
post #11 of 11

So did you get everything figured out?

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