mncwhitely Posted 26 May 2012 , 10:16pm
post #1 of

I have mostly been making cakes for local clients or family so I have always just delivered for free. In the last 2 days, I have had requests from 2 different people who want to order cakes that will have to be delivered to a town that is 75 miles away. With gas being so high right now there is no way I can delivery them for free. Does anyone have any advice on what I should charge for a delivery fee?

26 replies
BlakesCakes Posted 27 May 2012 , 12:03am
post #2 of

I go by the IRS mileage rate, which is currently 55.5 cents per mile, so $1.11/ roundtrip mile.

Rae

leah_s Posted 27 May 2012 , 12:33am
post #3 of

In town my delivery fee was $50. That's 2 miles of 25. After 25 miles one way, it's $1 per mile, each way.

jason_kraft Posted 27 May 2012 , 2:10am
post #4 of

We charge $1/minute round trip according to Google Maps estimates. So if that 75 mile trip takes 90 minutes, we would charge $180 for delivery. This covers your time, fuel, and depreciation on your vehicle (IRS mileage reimbursement only covers fuel and depreciation).

BlakesCakes Posted 27 May 2012 , 2:41am
post #5 of
Quote:
Originally Posted by jason_kraft

We charge $1/minute round trip according to Google Maps estimates. So if that 75 mile trip takes 90 minutes, we would charge $180 for delivery. This covers your time, fuel, and depreciation on your vehicle (IRS mileage reimbursement only covers fuel and depreciation).




OMG! Just tell me that you don't want to deliver it and be done with it!

NOBODY will ever extract a $60/HOUR delivery fee out of me--I don't care WHAT they make. I'd do without before I'd every pay that type of fee.

I consider my time VERY valuable, but if offered this option I'd either pick it up or not buy it--no matter how bad it was on the 405.

But then again, I'm a real shopper. Many people aren't--they just cave in and don't know how to express their disbelief and walk away..............sadly.

JMHO
Rae

jason_kraft Posted 27 May 2012 , 2:48am
post #6 of
Quote:
Originally Posted by BlakesCakes

Just tell me that you don't want to deliver it and be done with it!



That's exactly what we're doing. The delivery fee is on the high side to encourage more pickups, which are a far more efficient use of our time and incur significantly less opportunity cost. It helps that we are local to some extremely affluent areas (Silicon Valley) and have a significant competitive advantage in our target market (people with food allergies).

We also deliver cakes to businesses for office parties, seems like every other month we make a delivery to the Googleplex (about 30 minutes each way) and Google has no problem paying the delivery fee.

Quote:
Quote:

I consider my time VERY valuable, but if offered this option I'd either pick it up or not buy it--no matter how bad it was on the 405.



Believe it or not, some people consider their time more valuable than $60/hour, and those are the people who agree to the delivery. Since most of our orders are small cakes we don't deliver too often, I'd say about 5-10% of our orders are delivered, some as far away as SF (which costs $150 or so for delivery). Then again, there are about a million customers within a 20 minute drive so the delivery fee is usually in the $20-40 range.

1234me Posted 27 May 2012 , 3:55pm
post #7 of

I don't offer delivery unless it is three tiers or more.

I don't charge enough for my time so I am fo no help icon_sad.gif

mncwhitely Posted 27 May 2012 , 7:28pm
post #8 of

Thanks for all of the suggestions. I live in a small town so it is no big deal for me to continue to delivery locally for free. I think I will go with the IRS mileage and charge round trip. If they don't want to pay it then they can just pick it up or not order. I don't have a problem staying busy with local clients anyway!

KoryAK Posted 27 May 2012 , 7:40pm
post #9 of

The IRS mileage rate pays you nothing for your time. Your time to drive miles is worth nothing to you? You couldn't be making another cake? Spending time with your family? Heck, even sleeping??

BlakesCakes Posted 27 May 2012 , 8:24pm
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by BlakesCakes

Just tell me that you don't want to deliver it and be done with it!


That's exactly what we're doing.




You know, I thought about it and I even went to the current website to see if the person who took over your business gave any hints about the scope of their delivery charges---no, they don't, so I don't know if they've continued your pattern.

Perhaps when you held the business you had the $60/hr. delivery fee clearly stated on the website?????

I doubt that I'm the only person to have such a strong gut reaction to $60/hr. for delivery and I'd bet that if that number was posted, many people considering delivery would never inquire.

To me, reading, "we can deliver for an extra charge" doesn't conjure up a fee higher than what I pay my plumber for a house call.......

I really admire businesses who have the courage to display their exact delivery charges. I prefer to be allowed to make that choice before I've committed to an order.

Rae

jason_kraft Posted 27 May 2012 , 8:41pm
Quote:
Originally Posted by BlakesCakes

Perhaps when you held the business you had the $60/hr. delivery fee clearly stated on the website?????



We did not include a specific delivery charge on the web site. There's no reason to include the formula for how we calculate delivery, just as we don't need to specify the hourly wage we use to price our products or how much the per-order overhead allocation is.

Quote:
Quote:

I prefer to be allowed to make that choice before I've committed to an order.



Of course customers are allowed to choose whether or not they want their order delivered before they commit to an order. When they contact us, we ask if they would like pickup or delivery, and if they want delivery we quote a specific delivery charge based on how far the delivery address is from our kitchen. As I said above this delivery charge is usually in the $20-40 range.

BlakesCakes Posted 27 May 2012 , 9:00pm

So you asked them about delivery and specified the likely cost BEFORE they had created an order, so that they could factor that extra cost into their planning?

Before they had even mentally committed to purchasing from you?

Or when they said, "I see that you deliver." you immediately volunteered the delivery formula before proceeding--- so that they would be making a fully informed decision about costs and not be surprised at the end run when they asked about the delivery charges and found that it now put them significantly over budget?

I'm saying that the discussion of such a significant charge--whether you want to disclose it as a courtesy to a customer, or not--needs to be transparent from the beginning and NOT added on as an expensive "afterthought".

Rae

jason_kraft Posted 28 May 2012 , 12:02am
Quote:
Originally Posted by BlakesCakes

So you asked them about delivery and specified the likely cost BEFORE they had created an order, so that they could factor that extra cost into their planning?



Yes, an order is not considered placed until all the components of the order are finalized and an invoice is created. If they contact us in advance and ask how much delivery costs to their address, we are happy to tell them.

Quote:
Quote:

Before they had even mentally committed to purchasing from you?



I'm not sure what that means. If a customer is "mentally committed" to purchasing from us and the delivery charge is over their budget, they would just pick it up.

Quote:
Quote:

Or when they said, "I see that you deliver." you immediately volunteered the delivery formula before proceeding--- so that they would be making a fully informed decision about costs and not be surprised at the end run when they asked about the delivery charges and found that it now put them significantly over budget?



We always ask whether the customer wants pickup or delivery. If they want delivery, they tell us where they want it delivered and we quote them a delivery price for their address (not the formula). There's no "end run" involved.

Sometimes customers who live far away from us are surprised at the cost of delivery. If they state this outright or attempt to negotiate I simply say that the delivery cost is based on the distance from our commercial kitchen, customers understand this and either pay the delivery cost or pick it up themselves. More often customers are surprised that we deliver in the first place, since most bakeries catering to the midrange market don't.

Quote:
Quote:

I'm saying that the discussion of such a significant charge--whether you want to disclose it as a courtesy to a customer, or not--needs to be transparent from the beginning and NOT added on as an expensive "afterthought".



I disagree both that the delivery charge is significant (it is usually relatively small, and delivery itself is a nice-to-have and can be skipped) and that 100% transparency is necessary in this regard. We also don't include prices for every potential upcharge for premium flavors or custom designs, since it will vary from order to order.

As you can personally attest to, seeing a formula of $60/hour or $1/minute can be upsetting to some people, but in congested metro areas charging based on time is more fair than by distance. In some areas it can take 20 minutes to travel 5 miles, and charging $4/mile wouldn't be fair to people living in less congested areas.

KoryAK Posted 28 May 2012 , 12:19am

I charge $175 to drive to the next main town, which is about 50 miles from my bakery. Total delivery time round trip is around 2 hours, so $87.50/hour. Yes this is posted on my website. Don't want to pay that? Don't have your cake delivered.

I think people like to rail against Jason just because he's Jason.

BlakesCakes Posted 28 May 2012 , 12:42am

Oh, Jason, you work so damn hard to not understand anything I say........

If, as the customer, I take the time to find your business, peruse your offerings, decide on what I want to order (mentally commit), and consider delivery as a real option, I don't want to go thru any part of the process with you only to find out that the cost of delivery is way beyond what I consider reasonable. That's a waste of my time.

You may not be able to anticipate every "extra" that someone may request, although many reputable bakeries will note $ ranges for certain common things, but if you know what you charge for delivery, I really do think that should be disclosed on the website or at the outset of an order inquiry.

Basically, to get my business, tell me everything you can at the OUTSET of the process that will allow me to make an informed decision about how I'll be spending my money.

Rae

crushed Posted 28 May 2012 , 12:46am
Quote:
Quote:

I think people like to rail against Jason just because he's Jason.




I was thinking the same thing.

jason_kraft Posted 28 May 2012 , 12:55am
Quote:
Originally Posted by BlakesCakes

If, as the customer, I take the time to find your business, peruse your offerings, decide on what I want to order (mentally commit), and consider delivery as a real option, I don't want to go thru any part of the process with you only to find out that the cost of delivery is way beyond what I consider reasonable. That's a waste of my time.



Agreed...and as you said, delivery is an option. Pickup is always available as a cheaper alternative. Just like with any other premium option, if the customer really wants delivery and needs to stay within a certain budget we work with the customer to reduce the cost of the cake or make the delivery to a closer location.

Quote:
Quote:

I really do think that should be disclosed on the website or at the outset of an order inquiry.



The amount is disclosed as soon as the customer inquires about the order (or before if they ask specifically about delivery costs).

Your posts in this thread exemplify why we don't specifically say on our web site that we charge $60/hour or $1/minute for deliveries: for some customers, the focus would shift to the delivery charge and why it is so high instead of staying on the cake. It really is not that different from charging $1/mile...in some areas $1/minute would actually be cheaper than $1/mile.

BlakesCakes Posted 28 May 2012 , 1:45am

Thanks for validating my personal policy to NEVER deal with any business that doesn't disclose delivery charges up front and in writing--without my having to ask.

You say that you see my point, but a few paragraphs down, you justify NOT putting the delivery charges on the website because "....the focus would shift to the delivery charge and why it is so high instead of staying on the cake".

What that says to me is you're willing to get me significantly invested in the cake that I've envisioned and then when I ask about delivery, force me to grapple with choices about $ & locations-----that's the "waste" of time I'm talking about.

Personally, I walk away from those scenarios with no regrets and a loud mouth about why I'm not using that business:
"Well, we got all the way through the ordering process and when I asked about delivery, it added so much to the price that I had to say no thanks. Fifteen minutes on the phone for nothing.........The next place I call will have the delivery charges on the website, or I WON'T call !"

Rae

KoryAK Posted 28 May 2012 , 2:10am

So I (or Jason) should answer the phone "Superstar Pastry Design delivery is $20 within Anchorage or $3.50 per mile calculated one-way outside of town unless of course you don't need delivery, how may I help you?"

Come on. Delivery isn't requested or discussed for 90% of my non-wedding cake orders and I'm pretty sure that's the same for most of us. For wedding cakes it is discussed during the consultation. I'm not gonna get into options customers don't need until they need them. It shouldn't be on the front page of the website either because Jason is right, customers may focus of the less important factors before the more important ones. Now, if your business was 90% delivery then yes that is a valid thing to discuss immediately.

jason_kraft Posted 28 May 2012 , 2:22am
Quote:
Originally Posted by BlakesCakes

Thanks for validating my personal policy to NEVER deal with any business that doesn't disclose delivery charges up front and in writing--without my having to ask.



We do disclose delivery charges up front, either in writing (via email) or over the phone, and customers do not have to ask to receive this information, assuming they want delivery in the first place. In all cases the delivery charge appears on the invoice which is emailed to the customer once the order is finalized. The customer is free to change their mind about delivery at any time during the process.

Quote:
Quote:

What that says to me is you're willing to get me significantly invested in the cake that I've envisioned and then when I ask about delivery, force me to grapple with choices about $ & locations-----that's the "waste" of time I'm talking about.



Yes, the decision to pay for delivery or pick up a cake is indeed monumental. The choices are: pick up the cake, pay for delivery to your desired location, or pay a smaller amount for delivery to a closer location.

Quote:
Quote:

"Well, we got all the way through the ordering process and when I asked about delivery, it added so much to the price that I had to say no thanks.



We have never had a customer cancel an order because of the delivery charge. As I said above, if delivery is too much the customer picks up the cake, and if delivery is a must but the order is over budget we work with the customer to reduce the cost of the cake.

Quote:
Quote:

Fifteen minutes on the phone for nothing.........



The first thing I ask (on the phone or in an email) is where the customer is located and whether they want pickup or delivery.

If you would really get so upset over a delivery charge that you would just cancel the order outright instead of picking it up or modifying the order to stay within budget, then I probably wouldn't want you as a customer in the first place.

KoryAK Posted 28 May 2012 , 2:28am

[quote="jason_kraft"}

If you would really get that upset over a delivery charge that you would just cancel the order outright instead of picking it up or modifying the order to stay within budget, then I probably wouldn't want you as a customer in the first place.[/quote]

thumbs_up.gif

BlakesCakes Posted 28 May 2012 , 2:44am
Quote:
Originally Posted by KoryAK

Now, if your business was 90% delivery then yes that is a valid thing to discuss immediately.




100% due to zoning.

It's on your website and easily located--perfect. The circumstance of delivering in the Anchorage area is , to say the least, exceptional.

I consider an informed customer the best customer.

"If you would really get that upset over a delivery charge that you would just cancel the order outright instead of picking it up or modifying the order to stay within budget, then I probably wouldn't want you as a customer in the first place."

You, sir, are correct in that assumption. Every deal has a deal-breaker. Clearly, you have discovered mine.

Rae

jason_kraft Posted 28 May 2012 , 4:00am
Quote:
Originally Posted by BlakesCakes

Every deal has a deal-breaker. Clearly, you have discovered mine.



I'm a little confused here...you stated earlier that your personal policy is "to NEVER deal with any business that doesn't disclose delivery charges up front and in writing--without my having to ask". Since we do disclose delivery charges up front, I'm not sure what the issue is.

Here's what a typical order inquiry would sound like:
Customer: "I'd like to order a cake."
Business: "Would you like to pick up your cake or have it delivered?"
Customer: "Delivered."
Business: "Where is the delivery address?"
<customer states address>
<business looks up address in Google Maps, address is 15 minutes from kitchen>
Business: "Your quote for delivering this order is $30, or you can pick it up from <kitchen address> at no extra charge."

To clarify, is this the point where you would become irate and make it your mission to destroy my business?

If so -- for my own curiosity -- what would need to be added to the web site to abate your fury? And how do you have it worded on your bakery's web site?

Evoir Posted 28 May 2012 , 4:32am

Hmmm. I'm not sure why this is such an issue.

I was charging $2 per kilometer (or $1/km each way). I also use google maps. I like Jason's formula. I have planning on increasing my delivery charges because it is a service I provide (mostly for wedding cake clients) that does not make me any money, and eats up a whole lot of my weekend with my family. So, my new calculation I'm working on will be based on kilometers travelled, plus time spent x number of delivery people required. Because my husband delivers the cakes with me in 99% of cases, it is only fair to be paying him for his time also.

I am upfront about delivery charges, and yes, clients do factor it into their decisions on whether they will get someone to pick up the cake for them, or ask me to do it. I have never lost a potential client due to my delivery fees. As I said, I really prefer NOT spending three hours on a Saturday delivering cakes! I <3 pickups!

BlakesCakes Posted 28 May 2012 , 4:51am

Well, I have used the term "in writing" several times, generally meaning that it's stated clearly on the website--as it is on Kory's under FAQs............

I do an internet search for probably 90%+ of my transactions with new businesses these days, looking for reviews (by the way, Yelp shows your ex-business as CLOSED, so the new proprietor might want to look into that.....it likely stops potential customers in their tracks unless they take the time to go to the page, anyway, and see the disclaimer about under new management), and any other information that may help me to hit a bulls eye the first time I call, rather than spinning my wheels only to find out about things like unexpected delivery fees, etc.

I prefer to refer back to things in print, should there be a problem.

The way I handle things would have little relevance to a brick & mortar business because I don't have a bakery or website for orders. I operate under cottage laws out of my home and I generally deal with people who find me by word of mouth. When I have an inquiry--by phone, in person, or by e-mail--the first thing I verify my availability for the date requested. I respond via e-mail, citing my policies (including delivery information) and requesting a response to hold the date. Communication continues via e-mail to keep up the printed record.

Kudos for making sure that delivery IS virtually the first thing discussed when someone calls about a cake.............Personally, when I have been the customer, I've found that it is generally the last thing mentioned during the process.

What you would see as a "mission to destroy your business", I would see as a reasonable comment about why I chose to not use a particular business:
"Did the cake come from XYZ? No, I needed it delivered and they're delivery charges were way too high, so I did some more research and went with ABC. That'll teach me not to call before I've checked the website for some basic info."

Rae

mcaulir Posted 28 May 2012 , 5:35am
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by BlakesCakes

Every deal has a deal-breaker. Clearly, you have discovered mine.


I'm a little confused here...you stated earlier that your personal policy is "to NEVER deal with any business that doesn't disclose delivery charges up front and in writing--without my having to ask". Since we do disclose delivery charges up front, I'm not sure what the issue is.

Here's what a typical order inquiry would sound like:
Customer: "I'd like to order a cake."
Business: "Would you like to pick up your cake or have it delivered?"
Customer: "Delivered."
Business: "Where is the delivery address?"
<customer states address>
<business looks up address in Google Maps, address is 15 minutes from kitchen>
Business: "Your quote for delivering this order is $30, or you can pick it up from <kitchen address> at no extra charge."

To clarify, is this the point where you would become irate and make it your mission to destroy my business?

If so -- for my own curiosity -- what would need to be added to the web site to abate your fury? And how do you have it worded on your bakery's web site?




You've never made me laugh out loud before. Well done, sir.

ladyonzlake Posted 29 May 2012 , 3:23pm

I charged $35.00 for the first 10 miles and $1.50 per mile after that (based on oneway mileage). I have it posted on my website, in the contract and on their invoice. Brides expect to pay for delivery and set-up and it's a very common practice here.

Quote by @%username% on %date%

%body%