Is there any one out there selling and or using their products in some ones business! I was aked to do so but I am not sure what I need to do or what percentage to ask for when I am using my own equipment for decorating! Is this a good idea to get my name out there!
The first thing you should look at is if it's legal to sell wholesale in your state. Some states have cottage food laws that allow homemade cakes to be sold, but some of those laws only allow sales directly to customers.
If you can do this legally, you will want to come up with a minimum wholesale price (based on your costs plus a profit margin) and a maximum retail price (based on market research) for all products you want to sell wholesale. If the retailer wants to buy your products for less than your minimum wholesale price or sell them for more than your max retail price you should decline.
Thanks for the good info! If I were to decorate the cakes it would be from their kitchen and not mine although I am liscensed to bake and sell from my kitchen. I have a owner of a coffee shop who is wanting me to decorate cakes & cupcakes from their kitchen and possibly bake my products there. I am trying to figure out if this is worth the exposure, time and effort to do this and if so how do I determine if I should go in as a consultant on a percentage rate or work as their employee! Thanks again for your help and I welcome any more info you may have!
If you are decorating from their kitchen with their equipment and supplies, that sounds like an employee or independent contractor situation, and they probably wouldn't let you brand your products with your own business name. If I were the coffee shop owner and a supplier wanted to make products in my kitchen and sell them in my shop with their logo, I would insist on a separate agreement where the supplier would rent my kitchen space and use their own ingredients to make the products (or just make the product somewhere else), then they would sell me those products at a wholesale price. Although there could potentially be an arrangement where orders for things like wedding cakes (which probably don't compete with the coffee shop) could be placed at the shop and passed to the supplier's business (with a referral fee taken out), who could then produce a branded product for the customer.
From your perspective, if you just want to focus on cake decorating instead of the business side, I would recommend going for a permanent position as an employee of the coffee shop and market yourself as the "head cake decorator" (or whatever your title would be) of the coffee shop instead of your own business. Drawing a flat hourly wage would be less risky than going for a percentage of the profits.
On the other hand, this strategy does carry the risk that the coffee shop could replace you with another decorator. If you want to keep building your own brand, I recommend baking from home and selling wholesale to the coffee shop (if UT allows this).
This is similar to what I am doing . . in a round about way.
We were going to get a home food processor exemption to cook in our kitchen but it was overly complicated and overly restricted (Lord knows why . . ).
So we then decided to find a Commercial Kitchen to rent. We lucked out and found one at a candy store, where the owner will give us some retail space as well. For this, she is charing 20%.
I weighed it out, and although 20% seemed high at first, after I did the math, I am very ok with it. Most bakeries that make everything in house, have high overhead: Rent, bakery equipment, ovens, employees, insurance, electric . .
All I have is my rent to the kitchen which is (in my opinion) a great deal. 24 hour access at less than $500/month.
Putting my product in her store gives me instant exposure, that I would not get on my own.
I will price my products to take in account for ingredients, supplies, rent, and the commission, and still make a profit.
It's really up to you . . what works for one, may not work for others.
Thank you both for your input! This has helped a great deal and I appreciate your honesty! I knew I could count on my fellow cake decorators and bakers to have the best information. I will take what you have given me and follow suit. I have some thinking & homework to do! I want to make sure that I am following all cottage food regulations and cover myself if I decide to do something like this.
In both of my states, wholesaling is an additional license. It involves packaging, labeling, and food safety on packaged items where the producer is not in direct contact with the consumer. Call your HD.