Questions About Partnering With Bakery

Business By peachspider Updated 10 Nov 2010 , 5:25pm by peachspider

peachspider Posted 7 Nov 2010 , 11:18pm
post #1 of 18

I'm partnering with a bakery that sells mostly bread. The only cakes they sell are whipped cream cakes with fruit topping. The owner agreed that I can put my catalog and decorated cake dummy in the bakery for display, and I only make custom cakes (buttercream or fondant cakes) when customer orders one. I do not use his kitchen at all. The owner takes the order, and he provides me with plain cakes, cake board and box, and then I do the rest with my own materials. My question is, if he only provides the plain cakes, and cake board and box, what percentage do you think the owner should get out of the total cake price? And is there a difference in percentage between sponge cake and pound cake? buttercream and fondant cake?

Thank you so much for your advices.

peachspider

17 replies
-K8memphis Posted 7 Nov 2010 , 11:38pm
post #2 of 18

Honestly I think the guy should pay you an hourly wage and whatever you use additionally in the way of food color or whatever he should pay for.

Otherwise I don't know how to divide that up--it's too weird--too confusing.

-K8memphis Posted 7 Nov 2010 , 11:39pm
post #3 of 18

And you should just work there out of his place.

peachspider Posted 7 Nov 2010 , 11:54pm
post #4 of 18
Quote:
Originally Posted by -K8memphis

And you should just work there out of his place.




I purposely don't want to be his employee because they don't have steady custom cake orders. His kitchen is so small that they can barely keep up with their daily bread production. The owner did agree that if I want, I can go work in the kitchen after 5:00 PM when the bakers are off work. However, there's almost nothing I can use to decorate cakes in that kitchen, and if I were going to work in his kitchen, I would need to pack up all my tools with me.

jason_kraft Posted 8 Nov 2010 , 12:16am
post #5 of 18

Where do you work now? If you are in a state that does not allow commercial home baking, it might be worthwhile to make a deal to rent his kitchen after hours, along with a small storage unit for your equipment.

You should follow the normal procedure to figure out how much to charge...add up the ingredient costs and labor costs for the decorating portion of the cake, and factor in any overhead you may have on a per-cake basis.

peachspider Posted 8 Nov 2010 , 1:06am
post #6 of 18
Quote:
Originally Posted by jasonkraft

Where do you work now? If you are in a state that does not allow commercial home baking, it might be worthwhile to make a deal to rent his kitchen after hours, along with a small storage unit for your equipment.

You should follow the normal procedure to figure out how much to charge...add up the ingredient costs and labor costs for the decorating portion of the cake, and factor in any overhead you may have on a per-cake basis.




I'm in MD where commercial home baking isn't allowed. That's why I wanted to partner with the bakery and use the cakes from the bakery, and I also get to advertise my cakes at the bakery as the bakery's product, not under my name. And the owner shares the profits from selling the custom cakes. Am I too naive to think this way?

-K8memphis Posted 8 Nov 2010 , 1:15am
post #7 of 18

Where are you planning to do the decorating?

Another thing about bread bakeries, is that they make pennies per loaf--the amount of work, and the time invested are great and the profit is meager. So it's real hard--even harder than cakes to make a profit. And he's got employees too?

Small? I used to stand in the main walkway of the bakery's kitchen to decorate--I was between the oven and the baker's work table--when someone came by, I had to move over into the doorway of the stock room until someone needed to get in there....

peachspider Posted 8 Nov 2010 , 2:10pm
post #8 of 18
Quote:
Originally Posted by -K8memphis

Where are you planning to do the decorating?

Another thing about bread bakeries, is that they make pennies per loaf--the amount of work, and the time invested are great and the profit is meager. So it's real hard--even harder than cakes to make a profit. And he's got employees too?

Small? I used to stand in the main walkway of the bakery's kitchen to decorate--I was between the oven and the baker's work table--when someone came by, I had to move over into the doorway of the stock room until someone needed to get in there....




I would prefer to do the decoration at my own place since they don't have anything I need in the kitchen, not even fondant. I don't want to have to pack up things whenever I go there and pack everything back when I leave. I don't want to store my stuff there because I don't work only for him. I will need my tools when making cakes for someone else.

I totally agree with you. The profit at the bread bakery is very low. The customers don't expect to spend much there either so I don't really get many orders unless it's a very special occasion and the customer really wants something extra special. Most customers were scared away by the custom cake prices.

dreamcakesmom Posted 8 Nov 2010 , 2:27pm
post #9 of 18

I don;t want to be the "that person" who sees the flaw in the plan but I would check with the BOH, I would assume that if you are in any way working with a food product, even just decorating you would have to be working in a licensed kitchen. You are still handling a food product. In regards to the money, if you can figure out a way to meet the needs of your heatlh code then I think the easiest way is to actually have you pay him for the ckae (maybe he can give you wholesale price and then you get the cost of the cake. Truthfully, this type of set up could get really muddy so whatever you decide get it in writing and perhaps set an initial time frame to revisit terms

-K8memphis Posted 8 Nov 2010 , 2:29pm
post #10 of 18

Percentages? Who knows this is too confusing.

You simply can't do this legally. I'm not saying don't do it--it's your call--but it's exceeding time consuming and complicated to operate this way. I can't see making any headway or money like this. This could have repurcusions for him. I'm not seeing the value in it for you. You have an opportunity to make use of a commercial facility and you want to chaffeur the cakes around.

With the owner taking the orders and you not being there for pick ups confusion can reign. Just as in any shop when work flows from one person to another. This is a recipe for baked alaska tier cake--it'll be nice for a short while.

All the best to you.

-K8memphis Posted 8 Nov 2010 , 2:35pm
post #11 of 18

I mean just your gas and wear and tear on your car alone puts the cost too far out. See what I mean? Just schlepping cakes from the bakery into your car from your car into your home then out of your home into the car and out of your car into the bakery--at my best, in my day I din have that kind of commitment nor stamina. That's four deliveries before it gets picked up and taken home. Go back to the drawing board on this one Cake-Buddy.

Believe me I get 'the dream' so far you ain't close.

<heart>

Unlimited Posted 8 Nov 2010 , 3:34pm
post #12 of 18
Quote:
Originally Posted by peachspider

I'm partnering with a bakery that sells mostly bread.
...and I only make custom cakes when customer orders one.
...The owner takes the order, and he provides me with plain cakes, cake board and box...
My question is, if he only provides the plain cakes, and cake board and box, what percentage do you think the owner should get out of the total cake price?




Since you are already partnering with the bakery, making custom cakes when ordered (which the owner provides most materials for), how has it been working out so far?
What percentage has the owner received so far?
What did the owner ask for or offer when the arrangement first started?
What was the agreement that was settled upon by both parties as this idea was being formed?
Are you having second thoughts about this arrangement, and just wondering how other people in similar situations have it structured?

peachspider Posted 8 Nov 2010 , 3:55pm
post #13 of 18
Quote:
Originally Posted by Unlimited

Quote:
Originally Posted by peachspider

I'm partnering with a bakery that sells mostly bread.
...and I only make custom cakes when customer orders one.
...The owner takes the order, and he provides me with plain cakes, cake board and box...
My question is, if he only provides the plain cakes, and cake board and box, what percentage do you think the owner should get out of the total cake price?



Since you are already partnering with the bakery, making custom cakes when ordered (which the owner provides most materials for), how has it been working out so far?
What percentage has the owner received so far?
What did the owner ask for or offer when the arrangement first started?
What was the agreement that was settled upon by both parties as this idea was being formed?
Are you having second thoughts about this arrangement, and just wondering how other people in similar situations have it structured?




Since you are already partnering with the bakery, making custom cakes when ordered (which the owner provides most materials for), how has it been working out so far?
I am the one who's providing most materials. The bakery provides plain cake, cake board and box only. I provide other materials such as buttercream, fondant, or royal icing for flowers, color.....I'm not happy so far since I can't convince the bakery to provide me with pound cake. He always give me very soft sponge cake rounds cut out from a sheet cake.

What percentage has the owner received so far?
For cake topper only, I get whatever I want to charge for the cake topper. For buttercream cake, he wants 45%. For example, for this cake:
URL:   http://www.cakecentral.com/cake-photo_1825452.html
He only charged for $39. I was way unhappy about the price. And he wants 45%...
For fondant cake, we haven't figure it out yet. We have a full sheet fondant cake with royal icing flower decorations coming up this weekend. He's going to only provide the plain cake. I'll do the rest. That's why I'm posting this to get opinions about how much the bakery should get to just provide the plain cake + cake board+box.

What did the owner ask for or offer when the arrangement first started?
We never did figure that whole thing out yet because we haven't gotten many orders at all.... stupid huh? I know... icon_sad.gif

What was the agreement that was settled upon by both parties as this idea was being formed? icon_redface.gif no agreement yet.... I know... stupid....

Are you having second thoughts about this arrangement, and just wondering how other people in similar situations have it structured?
Yes yes yes. I'm actually thinking about ending the partnership... it's too messy, but just wondering if someone is in the similar but wiser arrangement that I might be able to learn from.

Thank you all for your advice. You are all being very helpful.

jason_kraft Posted 8 Nov 2010 , 4:15pm
post #14 of 18

I would definitely contact your local health department before you proceed...if commercial home baking is not allowed, that usually also applies to any commercial venture involving food (including cake decorating).

Unlimited Posted 8 Nov 2010 , 4:42pm
post #15 of 18

What I mean by "most" of the materials is that they are providing & covering all the costs for all cake ingredients plus the mixing & baking labor (wear 'n tear on the mixer & ovens), utilities, overhead, plus materials for boards and boxes... you just get to do the fun part--decorating! Yes, your contribution is labor, plus $1.00 per pound (more or less) for icing, and pennies for food coloring, not including fondant costs.

When I subcontracted my services for wedding cakes, it was a sweet deal... they paid for everything AND delivered, and we split the total price that the customer paid 50/50 (AND, I also got to keep 100% of whichever options were sold!). This worked for expensive large cakes, but it's not going to work for you on smaller or custom cakes if you don't get to set the prices!!!!

(I wouldn't downplay what they are providing, it's a lot, especially since it allows you to spend more time decorating. I also wouldn't look forward to decorating a custom cake for $20, regardless of how much time it takes or doesn't take!)

tiggy2 Posted 8 Nov 2010 , 5:06pm
post #16 of 18

No way in he!! would I suppliy materials and decorate a cake for $20. And I certainly wouldn't be letting him set the prices, nor would I let him decide what kind of cakes I needed. This doesn't sound like a good match to me.

dreamcakesmom Posted 8 Nov 2010 , 6:21pm
post #17 of 18

After reading the many additional posts on this one I have to agree this is way to convoluted for way too little reward. What is you primary goal in this arrangment? If it's just compensation then run because there's no way you'll get paid enough to have it worth your time, Is it getting your product out there to grow your own business? If so Run because people will always go back to the bakery as the source he's not going to send them directly to you or he loses business, he's not providing space for you to work, marketing opportunity or fair compensation. Iwould say thanks but no thanks

peachspider Posted 10 Nov 2010 , 5:25pm
post #18 of 18

Thank you all for your opinion. Indeed, I don't feel smart in this arrangement, but lesson learned, and I'm going to end it and search and plan for other opportunities. I will definitely look into the health regulations, too. icon_smile.gif

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