I have priced my basic bc cupcakes at 1.50 each its perfect for the market I am in but high enough to cover my costs. People kept saying that I needed to see what all my ingredients would be, electricity, delivery ect. before I decide on a price for my cupcakes. Pretty much where I live I have to travel at least 40 miles round trip to deliver. It will cost me about 7.00 to do that. So my question is should I charge for delivery on top of cupcakes or should I just include it? If I should charge how much?
If you are delivering to a venue or store, I'd charge the gas separately. A lot of people understand the cost of gas, etc. and are willing to throw in the extra dollars. However, if the price of the item goes up, even though the total they end up paying is the same, they start to feel uneasy.
Something to consider though is if you are starting and the average is more than what you charge, go ahead and raise your price a little to cover the cost of gas.
Don't forget it's not only the cost of fuel you need to account for, but your time sitting in the car and being unable to do other stuff while you are out for an hour (or however long it takes you). So, you should charge at least the fuel, plus your time.
People nowadays are used to paying delivery on everything. The alternative is for them to come and pick their order up from you (which they will think is "free" to them but it in fact costs them the same as paying you to do it - their fuel + their time!)
You could also call a local delivery company and ask them how much they would charge for the trip, so you get another ball park figure.
Also, in most cases, using 3rd party transport is just easier all around. You just pass on the cost to the customer. This is what I do.
I include local delivery to the surrounding cities in my price, but anything outside of those areas I do charge a delivery fee for. The further away it is, the more I charge. I looked at other cake websites in my areas and their delivery fees were like $50 and $70!!
I am just curious. Do you honestly trust them to deliver it safe and sound in one piece before it melts or whatever? I am a nervous wreck when I go to deliver a cake and I am the one driving(very carefully and with all precautions taken) I do not know if I could handle someone else delivering it for me. If they come pick it up I feel much better because I show it to them and make sure that they are happy with it and then I tell them how to transport it safely and usually supply the non-slip material to set it on. Once they have it and are happy and on their way I can relax. Just would love to know a little more about these delivery companies. Are they just any or specific ones ? Is there any kind of guarantee? Like if they are involved in an accident and your cake has not been delivered yet? Or if something happens to the cake because they don't get it delivered in a timely fashion from when they picked it up from you? This is a new idea for me, but one I am interested in depending on your answers. TIA
The guys I use are a 2 man operation. They are very friendly, clean, presentable and non-smelly, all of which is essential. They used to just deliver anything and everything, but saw that there was a need for "careful" deliveries, so they decided to dedicate themselves to just delivering hand made foodstuffs. I got their number from another place that does cakes, and have since given their details to other cakers. They deliver special dietary food and things too, apart from cakes.
They come and pick up from me right before delivery...I mean, they don't pick up first thing in the morning and have my cakes and cupcakes sitting in their car all day til delivery time.
I absolutely trust them with my goods. I have showed them the SPS plates and legs I use since they were skeptical about the cake not arriving in one piece (fondant stacked cakes are a new thing over here for most people). I tell them where to put the cake in their cars and they are also the proud owners of a roll of non slip shelf liner They now know how to pick up a box of cupcakes without pushing the bottom of the box up so the cc's don't fall over.
They have insurance, so would pay out if they had an accident and a cake got ruined (not that giving the client the cash would be much of a recompense for spoiling their event but it would be better than nothing).
If you can find someone to do it, its worth it. Or if you know someone who is out of work, maybe that is something they could persue, and if you know other cakers who would appreciate the help they could make a living out of it. I actually don't mind doing deliveries, and love handing the cake over personally, but I can't leave the bakery to do it so I have no choice (I am a one woman show at the moment!). I do set up weddings though, but these, so far, have been on Saturdays when I am closed in the afternoons anyway.
They send me an invoice at the end of the month. I collect the money from customers as I go, and pay them when required. I don't upcharge them at all, I have no need to make money off delivery charges.
Sorry for the long winded response but hope that helps some!
I do not suppose that I would be successful enough to live near you? east of the KC metro area? Gives me ideas though. your answer was no more longwinded than some of mine. that is for sure. I appreciated the details.
Remember, if you hire out the delivery, you still have to pay someone else for their time and gas. There is no getting around it.
I have an In Home Bakery and if I deliver I charge $0.50 per mile from my house. I have done several deliveries since starting and no one has thought twice about the delivery charge. If they did then they can just pick them up from my house. People want your product and will pay to get it. Plus, remember that you are making it easier for them if you deliver. I went online and looked at the reimbursement rate for milage on a government website (I think it was through the IRS) and the rate was $0.51 per mile.
My first question is, "You deliver cupcakes?" I delivered cakes that needed special handling (i.e. wedding cakes). Sheet cakes and cupcakes, which required no skill at all, were pick up only.
If it's a service you choose to offer, that's a great benefit to your customers. It just would be non-productive to me when I factored in my time involved and the time I'd have to be away from the shop.
I've mentioned this before but the IRS reimbursement fee has NOTHING to do with what you charge as a delivery fee. The IRS doesnt' tell you waht you can charge for a delivery .... they can only tell you what they will allow you as a business deduction for business mileage.
Your delivery fee should cover:
- depreciation, wear and tear on your vehicle (wait until you try to trade it in and get a low-ball trade in value because of high milage due to business usage!)
- commercial insurance (which is WAY higher than personal insurance)
- payroll of the delivery person (even if it's you doing the driving). Payroll should cover the everything from the time you leave your shop/home to when you return. If you hired some kid to deliver for you, he would clock in when he arrived to pick up the cake and would clock out when he returned your vehicle to you. You'd have to pay him for the whole round trip.
- lost opportunity costs: While you're tootling around on the back roads delivering 2 dozen cupcakes, you're NOT meeting with a bride to book a $600 cake or you're not in the kitchen baking the next big order.
Do not confuse IRS reimbursement rates with what you SHOULD charge for delivery. It's a service and benefit to the customer, who should be expected to pay for such a service and benefit.
Very good advice. Thanks.
hmmmm very interesting. Indydeb I will deliver them just because of where I live and because most if not all of my business is for family and friends. Its a bunch of small towns about 20 minutes apart. I don't mind though. I am not a huge bakery or anything and am not even legal....yet! I will be very soon though so just want to get my ducks in a row before I start selling cakes. I don't worry about stuff like booking 600 dollars with a bride or anything. I just want to make a little extra for my family. Like a couple cakes a month or so. Anyways what is all this IRS talk???