Spectra Posted 6 Aug 2013 , 7:46pm
post #1 of

AHey everyone, I've been approached by a shop who wants to sell my cookies, as I currently don't have a store front. Of course they expect a discounted price, and I can put my business info on each cookie bag, but I have no idea how much of a discount I should give them. I am hoping someone here could offer their expertise, please?

22 replies
nyclightskin Posted 6 Aug 2013 , 7:58pm
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Have you considered offering the store at an wholesale rate.. there is a formula that you can use to determine your cost.. ---


http://www.ehow.com/how_8641400_determine-wholesale-prices-bakery-products.html
 

BatterUpCake Posted 6 Aug 2013 , 8:23pm
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Great article!

nyclightskin Posted 6 Aug 2013 , 8:35pm
post #4 of

I was looking on line for one of my friends who works in the resturant business.. He make it alot simplier.. cause the resturant that he worked at was going to put my baileys cupcakes on their menu.. (My focus has been more so to get into wholesale.. Myself)..

 

So, good luck NO NOT undersell yourself.. either allow them to buy it from you.  If your product sells quickly and there is a demand they will ask for more.. WHOLEsaling is awesome. and you don't have to loose quality.. cause of quanity!

scrumdiddlycakes Posted 6 Aug 2013 , 9:00pm
post #5 of

I sell wholesale cupcakes to coffee shops, I sell at double the break even cost, just like the article states, and the coffee shops sell at about 3 times.

I am allowed to brand them, so they get me most of my business as well.

 

It does depend on the quantities they want to order though, f the order isn't large enough or regular enough, it's not worth it, imo.

MimiFix Posted 6 Aug 2013 , 9:36pm
post #6 of

For home-based food businesses, wholesale is an excellent way to create an income. It's standard practice in the baking industry to price most bakery items (excluding labor-intensive products such as wedding cakes) at 3x cost of ingredients for wholesale and 4x ingredient cost for retail.

 

Overhead, including labor and vehicle expenses, are figured into the percent mark-up. That figure will give you a place to start. I, and many colleagues, have used this method throughout our commercial baking careers and found it to be simple and efficient. (For decorated cakes, it's still necessary to calculate and add labor separately.)  

ellavanilla Posted 6 Aug 2013 , 10:19pm
post #7 of

don't forget to add the cost of your packaging and overhead.

ReneeFLL Posted 6 Aug 2013 , 11:51pm
post #8 of
Quote:
Originally Posted by MimiFix 

For home-based food businesses, wholesale is an excellent way to create an income. It's standard practice in the baking industry to price most bakery items (excluding labor-intensive products such as wedding cakes) at 3x cost of ingredients for wholesale and 4x ingredient cost for retail.

 

Overhead, including labor and vehicle expenses, are figured into the percent mark-up. That figure will give you a place to start. I, and many colleagues, have used this method throughout our commercial baking careers and found it to be simple and efficient. (For decorated cakes, it's still necessary to calculate and add labor separately.)  

I wished I could sell wholesale. Under the Florida Cottage Food Law we must sell directly to the consumer. No wholesale, mail orders or internet sales. I think there might be other states like this. Florida seems to be a little strict but at least they passed the law.

BatterUpCake Posted 6 Aug 2013 , 11:54pm
post #9 of

I thought I read Va was like that too Renee. Not sure though about cottage laws.

scrumdiddlycakes Posted 7 Aug 2013 , 1:52am

WA is like that as well, I *think* all the state's cottage food laws have that stipulation.

Stitches Posted 7 Aug 2013 , 2:06am

On top of pricing according to costs, you should consider the going rate for a similar product in your area. That's what your potential retailer probably is expecting to sell at.

 

Mimifix did state it correctly that retail is typically x4 your ingredient costs, but that factor isn't applicable to you figuring out your price unless you were doing the retailing yourself. The potential retailer will most likely take your wholesale price and double that, to establish the retail price.

 

What kind of cookies and what size are they?

MimiFix Posted 7 Aug 2013 , 2:27am

Each state has its own peculiar regulations. But there are quite a few states that allow for wholesale, I'm positive that New York does since that's where I live. I'm fairly sure of these - Ohio, North Carolina, Iowa, Pennsylvania, Maine, Massachusetts, Oregon, Oklahoma, plus a few others. The best thing is to check with your regulating agency.   

scrumdiddlycakes Posted 7 Aug 2013 , 2:58am
Quote:
Originally Posted by MimiFix 

Each state has its own peculiar regulations. But there are quite a few states that allow for wholesale, I'm positive that New York does since that's where I live. I'm fairly sure of these - Ohio, North Carolina, Iowa, Pennsylvania, Maine, Massachusetts, Oregon, Oklahoma, plus a few others. The best thing is to check with your regulating agency.   


Oh, geez, I was way off base then :) I thought that was one of the only rules that every state had the same.

Spectra Posted 7 Aug 2013 , 3:17am

AThanks for all the replies! We do hand decorated cookies, and size can range between 2" and 4". We sell them for the $1/inch usually. I live in a small city of 55,000 in Atlantic Canada and we are the only ones who make these type of cookies, but the community we live in is big on local businesses. We rent a kitchen, but no storefront, so this would be a great opportunity to get our name out there more. I like the formula, gives me an idea of a straight percentage to aim for since not every cookie costs the same. Thanks again! :)

Stitches Posted 7 Aug 2013 , 1:36pm
Quote:
Originally Posted by Spectra 

Thanks for all the replies! We do hand decorated cookies, and size can range between 2" and 4". We sell them for the $1/inch usually. I live in a small city of 55,000 in Atlantic Canada and we are the only ones who make these type of cookies, but the community we live in is big on local businesses. We rent a kitchen, but no storefront, so this would be a great opportunity to get our name out there more. I like the formula, gives me an idea of a straight percentage to aim for since not every cookie costs the same. Thanks again! icon_smile.gif

If a 2" cookie sells for $2.00.......your probably not making any money unless you have a machine making them. You couldn't possibly sell a 2" decorated cookie for any less than $2.00 and make a profit, so I don't know how you can afford to sell them wholesale to anyone. Your wholesale price must be at least $2.00 per cookie to make this worth your time. Which means your retail price should be $4.00 per cookie.

 

You need to work out all your real costs including labor and overhead/kitchen rental. It's possible/probable that selling larger cookies are the only way to be profitable for you. The materials and labor aren't that much more for a larger cookie but your profit is compared to a smaller version.

 

I don't think you can make a business of this at your current pricing..........not to mention the strain on your body hand piping everything. You need to look at all your costs and profits for each cookie, there will be designs and sizes that don't make a profit for you, and some that do.

liz at sugar Posted 7 Aug 2013 , 5:06pm

AI agree with Stitches . . . you have all the ingredient cost and labor, and if you sell a cookie for $2 that the retailer will sell for $4, you are getting the short end of the stick. It will be very hard to raise your prices later, so set your price where it needs to be now to make a profit.

Love all your cookies - your damask stencilled wedding cake cookie was particularly pretty.

Good luck!

Liz

nyclightskin Posted 8 Aug 2013 , 8:54pm
Quote:
Originally Posted by Stitches 

If a 2" cookie sells for $2.00.......your probably not making any money unless you have a machine making them. You couldn't possibly sell a 2" decorated cookie for any less than $2.00 and make a profit, so I don't know how you can afford to sell them wholesale to anyone. Your wholesale price must be at least $2.00 per cookie to make this worth your time. Which means your retail price should be $4.00 per cookie.

 

 

yeah, i don't know.. about you actually covering your cost or a profit.. NOTE when you sell an item at wholesale. YOU can set a min order.. So, lets say you put 50 dozen down at min to obtain the wholesale rate. .YOU can then cover some of the cost..

If this was a small store front. I've done this.. given the items to the store.. Allow them to sell them.. and I come and collect a percentage of the sales.) that way the store doesn't take a hit.. and we are still marketing..

I've done that a couple of times..

Spectra Posted 9 Aug 2013 , 3:42pm

AWell for a $2.00 cookie my actual cost, overhead, ingredients, etc, is around $0.50 per cookie. My time depends on the type of cookies, but more elaborate the higher the cost. $2 cookie usually is talking me 5-6 hours from start to finish on average. So I do make a profit, but I agree that it wouldn't be worth doing wholesale for a dozen cookies or something. But it would be nice to see my name get out there more. I could never sell a 2" cookie for $4.00 anyway. No one would ever buy them. The ones I've done for weddings people always ask for the cheapest possible. Now if I lived in Toronto that would be another story! :)

Stitches Posted 9 Aug 2013 , 6:13pm

Hum....the mass produced hard as a rock, tasteless cookies individually wrapped and sold at grocery stores, bakeries, Starbucks and other coffee shops retail for $4.00 or more everywhere in the US. $2.00 per cookie is a non-decorated frozen dough baked off cookie price sold in convenience stores.

 

You wrote, " $2 cookie usually is talking me 5-6 hours from start to finish on average." what does that mean....you work for 5 to 6 hours on 1, $2.00 cookie?

Stitches Posted 9 Aug 2013 , 6:18pm
Quote:
Originally Posted by Spectra  The ones I've done for weddings people always ask for the cheapest possible.

That's standard, everyone wants something for free or as cheap as they can get it!!

 

But if you work for those kinds of clients and you compete against cheap mass produced products you can't make a business of that! What's the point of working if you don't make a profit or you make less than a minimum wage job? You'd be far better off (mentally, physically and emotionally) working at almost any other job...

Spectra Posted 10 Aug 2013 , 4:03am

ALol, Stitches, no, sorry, I meant for a double batch, 60 cookies, average. Though usually we are making the 3" cookies. Definitely bringing in more than min wage. I've seen the decorated cookies at Christmas time at Starbucks, 3" snowman this past year, and they were selling them for $2.50 not bagged. I've seen the big 4" cookies go or $6, but I hardly ever make that size due to the price. Some of my 3" cookies would go for $3.75 due to lots of detail. I definitely agree with what you are saying about about those type of clients. I need clients who are not afraid to spend money on good things! Hehe. But darn its hard to reach them!

Spectra Posted 10 Aug 2013 , 4:11am

A

Original message sent by liz at sugar

I agree with Stitches . . . you have all the ingredient cost and labor, and if you sell a cookie for $2 that the retailer will sell for $4, you are getting the short end of the stick. It will be very hard to raise your prices later, so set your price where it needs to be now to make a profit.

Love all your cookies - your damask stencilled wedding cake cookie was particularly pretty.

Good luck!

Liz

Thank you Liz! I love playing with stencils. When I started my prices were a bit higher, but nobody seemed to want to bite. It's hard when I have nothing to compare to in this city except Starbucks :/

nyclightskin Posted 12 Aug 2013 , 11:15pm
Quote:
Originally Posted by Spectra 

Well for a $2.00 cookie my actual cost, overhead, ingredients, etc, is around $0.50 per cookie. My time depends on the type of cookies, but more elaborate the higher the cost. $2 cookie usually is talking me 5-6 hours from start to finish on average. So I do make a profit, but I agree that it wouldn't be worth doing wholesale for a dozen cookies or something. But it would be nice to see my name get out there more. I could never sell a 2" cookie for $4.00 anyway. No one would ever buy them. The ones I've done for weddings people always ask for the cheapest possible. Now if I lived in Toronto that would be another story! icon_smile.gif

Sounds like you have some options.. YOU Can sell it to them for 1.00 since the cost is .50.. But, the order would have be set at an min. So, 5-10 dozen.. You have to be able to bring your profit. .I definately wouldn't do al those details for 1.00 but you can always do an wholesale verision that doesnt' have so much detail but taste just as good. !

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