I Just Got My Break - Need Advice Please

Business By Caralinc Updated 12 Jan 2010 , 8:00am by CakeDiva73

Caralinc Posted 4 Jan 2010 , 8:02pm
post #1 of 18

Hi all,

I just received an order from the owner of a Coffee/Pastry shoppe for a customer of his. He would like to order cakes from me for retail for birthday party's. He would also like pictures of my cakes to hang around to advertise my cakes. He also asked me how to price the cake for retail - I have no idea how to do that. I am not sure what questions I should be asking him and so forth.

Any suggestions and ideas are welcome. Thank you so much for your imput.

17 replies
The_Lil_Cakehouse Posted 4 Jan 2010 , 8:23pm
post #2 of 18

Would you be doing One kind of cake? Or are you going to be opening your entire cake making skills and letting them choose at will?

If its just one cake, figure up how much it is to make it, and give yourself a generous profit to cover labor. Or you could price a basic cake (say regular cake no fancy fillings just buttercream, 2 colors, a couple flowers, and a message, blah blah (whatever you would consider a basic cake) then have "add ons" so if they wanted fondant that would be an extra $$, or if they wanted 6 colors that would be an extra $$, or if they wanted gumpaste flowers-3 flowers would be $$.

But if you just want to keep it simple so its one of those "Coffee Shop Orders" you can just whip it up with no thought because they're a regular thing then say, the cakes are $$ and they feed #.

Hopefully that makes sense, I feel like I'm rambling. Of course, I am new to this as well, so I'm curious to know what you come up with!

Good luck and Congrats on a "Regular Customer" order!!

sadsmile Posted 4 Jan 2010 , 8:43pm
post #3 of 18

Your price is your price and they are re-selling it at a higher price to make their profit off of your work. Don't get taken advantage of by the offer of advertizing and all. And don't lower your prices. Check into what the competitive price is for the style, work put in and kind of cake you will be doing and keep your price competitive not low.

jenmat Posted 4 Jan 2010 , 8:44pm
post #4 of 18

You need a menu- a big detailed one for the owner, and then a small one to give to customers to inquire about cakes. I do a "standard" option of decoration and flavors, and then a "custom" option. Everything standard is a firm price. Everything "custom" is $x and up pricing. That gives me wiggle room.

You need to find out how much he expects to make on his end. Hopefully he can be reasonable so that you can make profits. Be upfront when you ask this and say right off the bat- "my cakes aren't cheap." That way he won't suffer from sticker shock. You give him your price, then give him a suggested retail price. How he prices it is up to him.

I would call around and find out what your other local shops charge.

Caralinc Posted 4 Jan 2010 , 10:29pm
post #5 of 18

Thank you so much for the recent information.

Sassycakes09 - A friend of mine recommended me and he called. A customer of his was looking to order a birthday cake. He would like to start selling birthday cakes. So this one cake if all goes well may lead to a contract deal so to speak. So this cake order I received from him is a custom cake style. Fairy princess theme - 1 tier - with 3D fairy princess.

Sadsmile - thank you for the encouragement for not going lower on my price. I did already state that I am not cheap. He caught me off guard when he asked me about what retail price he should sell at. But now I know better. I will definantly keep to my price and work with him on how he should resell. Standard and custom - didn't think of that. I will definantly put one together.

Thanks again ladies for letting me know if I am on track or way off and for encouraging me to stick to my price. icon_smile.gif

Jentreu - thank you for the idea about a menu-

Caralinc Posted 4 Jan 2010 , 10:32pm
post #6 of 18

correction: Jentrue thank you for the menu idea - standard and custom - didn't think of that. I will definantly put one together.

leah_s Posted 4 Jan 2010 , 10:42pm
post #7 of 18

And you have your licensing and permits in order, right? Because you could put two businesses at risk with this deal if you don't. Just checking. icon_smile.gif

CookieMeister Posted 5 Jan 2010 , 4:42pm
post #8 of 18
Quote:
Originally Posted by leah_s

And you have your licensing and permits in order, right? Because you could put two businesses at risk with this deal if you don't. Just checking. icon_smile.gif




I know this gets said a lot, but listen to leah! For me this wouldn't be the break I'm looking for. As a home baker, I can only sell to the end user in my jurisdiction; I can't bake for resale. So be sure to check your area!

Caralinc Posted 5 Jan 2010 , 5:32pm
post #9 of 18

Leah_s and CookieMeister - thank you for your feedback. I am in the process of checking for resale. I was / am really concerned w/ this area. I have reviewed my state and placed a phone call to verify what I read to make sure I understand. It seems that I just might be able to however there are a few changes/differences when doing so.

I do have a licensed kitchen and am okay to sell directly to clients but am confused about resale. Will let you know how it works out.

cheatize Posted 7 Jan 2010 , 4:09am
post #10 of 18

How he prices the cake for retail is his decision. Why is he even asking you this? It depends on what profit he wants to make, how much of his expenses and labor go into it, and what the market will bear. In other words, the same stuff that you consider when selling a cake directly to the end user. All he needs from you is what you charge so he can plug that into his own set of numbers. If he's not willing to do that, perhaps he can upcharge a flat 10% or whatever.

sadsmile Posted 7 Jan 2010 , 3:26pm
post #11 of 18

Yeah, it almost sounds like he is asking her to lower her price to retail so he can mark it up and make more of a profit.

Caralinc Posted 7 Jan 2010 , 4:14pm
post #12 of 18

Cheatize and sadsmiel - you both hit it right on the button. My gut keeps telling me the same thing. I was confused as to why he was asking me that question about how to price his cakes. I am thinking because he knows that I am new to the industry that I may not have been as cheap. When I gave him my price HE seems shocked - he shouldn't have been he was asking for a custom design cake. He kept telling me the cake was for resale - his way of saying, I think you need to go down on your price so I can resell. I will be seeing him Friday. But my gut is telling me I don't think this will work and that I am better off just to keep builiding my portfolio and working on my own business as this is what I truely want to do.

Thank you all soo much for your reassurance.

Mike1394 Posted 7 Jan 2010 , 8:05pm
post #13 of 18
Quote:
Originally Posted by sadsmile

Yeah, it almost sounds like he is asking her to lower her price to retail so he can mark it up and make more of a profit.




I'm sorry, but this is how business works. You buy it as low as you can get it. Then you sell it for the most you can get.

I don't know why everyone is so shocked when someone tries to get a better price. Why is that?

Mike

leah_s Posted 7 Jan 2010 , 10:37pm
post #14 of 18

Yeah, I once had a coffee shop want to order cookies. He wanted to price them at retail for 75 cents. My wholesale price is $1. Oh well. Moved on.

cownsj Posted 7 Jan 2010 , 10:56pm
post #15 of 18

We have a cake shop with a similar type situation. Except, they want their customers to have their recipes for cakes, so they bake and fill the cakes, and have them waiting. We just show up after hours and do the decorating on "their" baked product. We haven't had a problem still with our price because they are high priced to begin with, so we still get our price even though they do the labor, ingredients and assembling of the basic cake. In some cases they just have to leave extra cake and buttercream for us, for some of the designs. It's their name on it, so they want their recipe. They have all the licenses and insurance in place. It's been a win-win situation.

Caralinc Posted 8 Jan 2010 , 12:47am
post #16 of 18

Mike, I am not sure everyone is shocked, I know I wasn't. I understand this is how business works but I am not a wholesaler and he was shocked at my price. I don't think he understands he was ordering a Custom Cake and those are expensive. He also knows that I am new to this business and didn't expect me to be as high as I was on my cake. My prices are right in line w/ other bakeries around here so I am not overcharging.

Leah_s - I think I just may have to move on. I will be meeting w/ him tomorrow but I have a feeling it will not work. I was just excited I guess that another business was interested in my cakes. I am new and I get excited to easily. I need to take a step back first sometimes and see what is really going on I guess. icon_smile.gif

verisimilitude Posted 8 Jan 2010 , 1:49am
post #17 of 18

I'd definitely take it as a compliment that he approached you in the first place, but if I were in your shoes I'd probably turn him down and advertise more. There's obviously a market for what you do, and people are obviously willing to pay, it's just that you need them to be coming directly to you, rather than through him.

CakeDiva73 Posted 12 Jan 2010 , 8:00am
post #18 of 18

Oy. This screams 'cafe lady' to me all over again. She always wanted to know my wholesale price......for a cookie. It was MADNESSS!

Don't make the mistake I made. Stand strong right from day one so you don't have to fight over every last dime. Lay it out - and don't be afraid if he walks. This is how they work, they take a new person and act like they're doing you a favor. Meanwhile, you do all the work, pay for the ingredients and they make the money.....

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