We're a farm equipment business. we have a vending license & BUSINESS LISENCE. I want to start selling this friend of mines homemade cakes. What should I pay her for making them? (Pound cakes)
What's a fair price? AND IS IT LEGAL TO SELL HER CAKES AT OUR BUSINESS
AIn the UK I understand that she must demonstrate that she is food hygiene registered with all responsibilities as a supplier satisfied such as ingredient labelling, allergy notifications, use by dates etc. You are both at risk if you don't ensure this. Your local environmental health should be able to advise over the phone.
As for price it's not as simple as telling you how much you should charge: generally, assuming satisfying your orders doesn’t take away from her personal business she would accept less money than she would get from an individual customer in return for your consistent order/exposure of her product etc, this allows you to make your required margin; since many people can buy market value cakes from local bakeries if you price too much higher than them you'll not sell anything; a few farm sellers near us instead sell by the slice in their cafe making the equivalent of around 5 times market value per whole cake but turnover needs to be high or cakes go stale after being cut and you get wastage.