How To Price Cupcakes, Cookies And Brownies For Contracts

Business By Krista512 Updated 16 Mar 2012 , 2:50pm by kelleym

Krista512 Posted 15 Mar 2012 , 5:51pm
post #1 of 7

I am needing some advice.
I have an oppertunity to made a contract deal with my doctors office
they want 300 items a week. basically 5 dozen a day.
each week alternating one week cupcakes, one week cookies, one week brownies etc
they are asking for a set price where the price would be the same each week.
These are goodies for their customers and will have my business cards out with them so its also fantastic advertising for me.
how much would you charge for a weekly price? I will deliver them they are just 2 miles down the street so no big deal to deliver other than having to take my 2 kids with me.

It would be a mixture of cupcakes like some vanilla some chocolate and maybe strawberry

and like sugar and chocolate chip cookies and possibly like an oatmeal rasin

and another week brownies

or just cupcakes one week and a mixture of cookies and brownies the next alternating each week.

6 replies
jason_kraft Posted 15 Mar 2012 , 6:02pm
post #2 of 7

Same as with setting the price for anyone else: ingredient cost + labor cost + per-order overhead (which will now be much lower due to increased volume) + profit margin. Since this is a pretty big regular order, if the customer wants to negotiate you have some room to lower your profit margin but I wouldn't drop it below 10% or so.

With this much volume liability insurance is a must (since hundreds of people a week will be exposed to your product), and you also want to verify that you can keep up this pace in your home kitchen and you have enough fridge/freezer space to make it work.

Krista512 Posted 15 Mar 2012 , 6:09pm
post #3 of 7

i was thinking about the insurance thing dont have a clue where to get it from. I heard no one sells insurace to home bakers in texas. She made it clear they could not afford $2-3 per cupcake. right now I know it coust roughly 55 cents per cupcake. including the one slot in the cupcake holder. I was thinking $1.15 each would be about 345 a week roughly half of that would be profit. she would probably try to talk me down a little. Im a stay at home mom and we are really struggling to pay our bills so any profit would be nice and guarenteed income on a weekly basis would be great.

jason_kraft Posted 15 Mar 2012 , 6:18pm
post #4 of 7

How many hours do you think this will take you every week, including prep, baking, decorating, packaging, cleanup, and delivery?

For insurance one good place to start is contacting your existing renters/homeowners insurance provider and asking for a referral. I believe State Farm also sells liability insurance to small businesses, the cost is around $400-500/year.

kelleym Posted 15 Mar 2012 , 7:04pm
post #5 of 7

Jason is right, you may be able to contact your existing insurance agent and find a policy, but if that doesn't work out, I have personally spoken with a Texas insurance agent who does have a reasonably priced home bakery policy ($250 - $500) and has been able to help several Texas cottage food operators.

http://texascottagefoodlaw.com/Resources/LiabilityInsurance.aspx

(disclaimer: there's no quid pro quo here. I get nothing if anyone uses her services, she was just mentioned by an acquaintance, and I was thrilled when I spoke with her to find that she does have a policy that will work for Texas home bakeries, so I made her contact information available as a resource)

scp1127 Posted 16 Mar 2012 , 5:02am
post #6 of 7

State Farm offers it nationwide. Just ask an agent. I think it's $275.00.

kelleym Posted 16 Mar 2012 , 2:50pm
post #7 of 7
Quote:
Originally Posted by scp1127

State Farm offers it nationwide. Just ask an agent. I think it's $275.00.



Some Texas cottage food producers were turned away by State Farm, which is why I was prompted to go searching for an agent with a reasonable, appropriate policy. I personally would hesitate before announcing what is available "nationwide" unless I had spoken to agents in all 50 states.

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