Okay, so I'm planning on selling cake bites. I'm trying to figure out if it's worth it.
Let's say my cost of ingredients to make 1 dozen cake bites is $3.50 (including packaging). If I sell them for $12.00 a dozen, my profit would be $8.50. BUT, I'm going to deliver them since they don't ship well, so I'd figure at least $4.00 of that money would be for gas, so that takes my profit down to $4.50 (maybe less depending on how far I have to travel to deliver them).
Is a $4.50 profit (or less) normal? That seems low to me. I'm planning on only selling cake bites so I'm still not sure if this business venture would be worth it. Any advice/suggestions would be greatly appreciated!!
Most people charge for delivery, especially for something so cheap/such a small order. You probably need to set a minimum amount that you will deliver for free (maybe there isn't such an amount), but for orders less than that amount have the client pay for delivery.
mayo2222- I thought of that but I'm not sure people would want to pay $12 per dozen and then have to pay an additional $3-4 for delivery. I'm afraid people would be turned off when they saw that they have to pay for delivery. But I really like your idea of free shipping with a minimum order!
Your profit is actually going to be way lower then when you figure in all the other additional costs of running a business such as insurance, licensing fees ,wear and tear on your vehicle, rent etc.
The cost is not just ingredients.
Edible Arrangements charges $12 to deliver locally in our area (maybe everywhere).
I gotta pay for the pizza to be delivered and it's only 10 bucks....not to mention the tip that may (or may not) be given.
You always have the option of telling clients they need to pick up their orders as well.
I dont' care what they paid me ..... I don't deliver a $12 item. I dont' even turn my oven on for $12. If I could have avoided it, I wouldn't have answered my phone for $12!
you might contact jillmakescakes. She shipped me some cake balls once as a test. not sure if she ships now, but you might ask her how all of her shipping tests turned out.
Also check websites of other confectionary businesses. You'd be surprised what they charge (and what people pay) for shipping. Odds are good that you can ship 3 or 4 dozen for the same cost as shipping 1 dozen, so set a minimum.
Thanks for the advice everyone!
In my small area, people would never pay what I've seen some people charge for cake bites on the internet (i.e.-$15-$20 per dozen). People are "cheapo-s" around here lol So maybe this business venture wouldn't turn out so well after all if I'm only selling cake bites.
Thanks indydebi...maybe I'll try getting a hold of her to see how she made out. I'm still wondering if it all would be worth it...
You also need to include the cost of your labor...how long does it take you to make and package a dozen cake pops?
Have you considering selling wholesale?
I just did a mock up order for Cookies by Design .... they charge between $15 and $43 for local delivery, depending on the delivery service required. And that's on top of the $54 to $85 cost for the cookies.
I had hoped to open a cupcake/specialty cake shop but the same is true for our lil town....everyone wants everything for free. My cakes are made 100% from scratch from the cake, fillings, butter creams to the fondant and modeling chocolate. But still seems like the cut off is 45 dollars! Anything more and people wont pay...I make them for that price now because its good practice and I ABSOLUTELY love making them. But its nothing i could quite my day job for lol
My test ship to Debi was literally, the 3rd test I'd tried, so I've got it down much better now.
With USPS flat rate shipping, its only $5.00. I also wouldn't offer free delivery for a single box, maybe a large corporate order, but not one measly box.
I ship a wide range of things including cake pops when clients order them. I do sell mine for around the same price as you do and I have no complain about the shipping and I only use FedEx overnight in my area. Debi right I would not be delivery some cake pops for $12.00 and then they don't to pay for delivery. I have a shop and even with cakes some clients don't want to pay delivery so I tell them you can pick it up but once its leaves the shop and something happens can't blame me I offered you delivery. You have to set your standard on what you feel you are worth and if that is charging for delivery then so be it. People won't take you seriously business wise unless you take yourself seriously and what you do is a valid business and you deserve to be compensated for what you do
The "profit" that you are referring to is your pay...unless they only will take you 5 minutes to make...doesn't seem worth it to me. Maybe have a larger minimum order, like 3 dozen?
If you work hard for so little money, you will burn out fast. And you definitely will not enjoy what you do. Make it worthwhile...or don't do it at all. JMHO
Thanks again everyone. I really appreciate the advice. And thanks indydebi and jillmakescakes for following up on this post. Unfortunately, I'm leaning towards not doing this at all. I don't think it's worth it. Not when people don't want to pay what they're worth.
I'm going to dito those that said you didn't consider your labor into your costs. That is a big part of your expenses.
You could make it profitable for you, you just have to find the right combinations of numbers.
I wouldn't sell these as a single dozen unless you just sold a bunch of them. I look at it like cupcakes. My recipe/cake mix makes 2dz or if I do an extender recipe that makes 3dz. So if I only made a dozen for someone, I'm still left with a dozen sitting around. That cuts into the profit.
And yes you can freeze the batter and use it later, but what if it is an flavor you don't use often? To me it is better to have a min order for little things like this.
About how many cake balls do you get from a recipe/cake mix? That would be my min amount. Other wise you have product/expense/profit sitting around you hope you can use in a timely manner.
Plus if you are working on a larger amount at one time, then you are saving yourself labor costs. Instead of having to pull everything out a second or third time to warm up and coat them in chocolate and package them, you would be doing it all at once.