Need Help With How Much $ To Give For A Referral To Make ...

Business By 12baCaker Updated 11 Jun 2010 , 12:41am by costumeczar

12baCaker Posted 8 Jun 2010 , 3:18pm
post #1 of 9

I have been asked to bake for a small business. Like a contracted vendor. My cakes would be sold under her business name. So my question is what would be her cut for my cakes. Is there a certain percentage she would get? Or, should I stick to a flat referral fee? Does anyone have any advice, it would be helpful!!!

8 replies
adamsmom Posted 8 Jun 2010 , 3:36pm
post #2 of 9

Hmmm...this is such a touchy subject to me. Personally, I would only want to enter into something of that sorts charging them a flat rate and then let them decide how much extra they would like to charge to make their profit. Just my honest opinion. I wouldn't feel comfortable doing anything else. Not sure how many places would agree to that. HTH!

nanawannabake Posted 8 Jun 2010 , 10:53pm
post #3 of 9

there are some other threads like this and there were lots of opinions not to bake under their business name. If you're not looking to build a business and name for yourself, maybe.

Also, what if the cake size, style and decorations change on some cakes - would the same flat rate apply? You would do more work, spend more $$ for supplies, etc. Who would be supplying the cake boards, boxes, etc.? Would you be able to purchase supplies thru them and get the large order discount? These are some things to think about, yes? You might want to google on cc to find those threads. They may be helpful. Good luck.

costumeczar Posted 10 Jun 2010 , 11:51am
post #4 of 9

If I was going to do this, I'd sell to her at my full price and insist that my name be on the cake. Why should she get the credit for making the cake, which would take away publicity and building a business name from you, while giving you a discount or getting a cut from the cakes? Unless you don't want to develop a business reputation you lsoe on both counts with that arrangement. I'd sell to her, then she can mark them up however she wants to. And if she tells people that she made the cakes I wouldn't sell to her anymore. She can think of a way to market the cakes without taking credit for them, that's easy.

costumeczar Posted 10 Jun 2010 , 11:52am
post #5 of 9

Because also, if something was wrong with a cake or someone complained, do you think that she'd take the blame for that? I think most people would be pretty quick to point the finger at you. So if you're going to be liable for any problems, you should also get any credit!

johnson6ofus Posted 10 Jun 2010 , 1:01pm
post #6 of 9

You provide the cake, she resells it at whatever rate she wants. Once you sell her the cake, it belongs to the buyer. "Credit" to the baker?--- that is not the responsibility of the buyer. Costumeczar- how exactly can you " insist that my name be on the cake" by any buyer of your product? icon_confused.gif Read a funny one here when a baker was invited to a post charity party and her donated cake was served and presented by the hostess as her own creation. TOO funny.... How do you know at a wedding that your cake isn't presented as "homemade by the MOB"? icon_wink.gif I can't imagine a line in your contract that requires a business card display or signage crediting the baker. Someone else selling your product just gives you more business- resale and mark up is just basic capitalism.

So now it is just price question. Do you give a "bulk" discount, or special pricing for multiple orders? It depends how it goes. Personally, I would quote "regular" rates for the first cake (let them "build" their business), and quote 5% (or something) off cakes 2-5, 10% (or something) off cakes 6-10... etc. That way, if they DO turn into a bulk buyer that gives you lots of business, their pricing reflects that. You don't end up giving them a great discount on the one cake they order for their cousin (or some similar situation).

costumeczar Posted 10 Jun 2010 , 4:55pm
post #7 of 9
Quote:
Originally Posted by johnson6ofus

You provide the cake, she resells it at whatever rate she wants. Once you sell her the cake, it belongs to the buyer. "Credit" to the baker?--- that is not the responsibility of the buyer. Costumeczar- how exactly can you " insist that my name be on the cake" by any buyer of your product? icon_confused.gif Read a funny one here when a baker was invited to a post charity party and her donated cake was served and presented by the hostess as her own creation. TOO funny.... How do you know at a wedding that your cake isn't presented as "homemade by the MOB"? icon_wink.gif I can't imagine a line in your contract that requires a business card display or signage crediting the baker. Someone else selling your product just gives you more business- resale and mark up is just basic capitalism.
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Easy. If you sell something to someone that's intended for resale, the health department generally requires that you put it in a box or packaging that has the ingredients listed. On that box, you also put the name of your business. You also arrange with the business that you're selling to that they include some mention of "Cakes by whoever" in their marketing materials, which should be pretty easy to check on. Unless you're a wholesaler, which is an entirely different ball of wax, I would assume that you want to build your business by spreading your name around. Selling a cake to someone and allowing them to resell it under their business name, with no mention of yours, is guaranteed to not grow your business beyond the person who's taking credit for your work. It will help her business, but not yours.

Sure, it's basic capitalism, FOR HER. Not for you, who won't get any increase in business from it. Word of mouth is the best advertising. When I deliver wedding cakes I make sure that I talk to the reception venue personnel, who will be the ones who will send the most business to me.

12baCaker Posted 11 Jun 2010 , 12:25am
post #8 of 9

Thank you all so much for the wonderful advice! I met with the business owner and based on your feedback, I am going to sell her my cakes as i would sell to anybody else, she can mark them up as she sees fit, she will acknowledge that I made the cakes and will not take credit for them, and she will get a discount based on the number of cakes she is buying from me. Thank you!

costumeczar Posted 11 Jun 2010 , 12:41am
post #9 of 9

Excellent! It sounds like you made a good deal for both of you, which is the ultimate goal if you want to continue in a business relationship that will benefit everyone involved. I'm glad it worked out.

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