Long Time Customer Discount?

Business By Snuggums Updated 23 Aug 2014 , 11:35pm by AZCouture

Snuggums Posted 21 Aug 2014 , 12:41am
post #1 of 15

AI had someone call me today interested in having me deliver and create 6 cupcakes and 12 cake pops about 4 times a month for many years to come. I can do any style and flavor I choose as long as it's with the theme. I was also asked to package and wrap them with a bow, ie. make it presentable. This will be good for my business as well as his. Should I give him a discount since this is a guarantee, free choice and help me or still just charge what I charge? Thanks. Or if you have price idea I'd appreciate it, I have some idea just curious

14 replies
AAtKT Posted 21 Aug 2014 , 1:12am
post #2 of 15

6 cupcakes and 12 cake pops per month aren't really all that much... if you discount, how much profit will you still be making?

 

Also think about things such as getting a contract for such a long term arrangement with all the details hashed out... including your annual price increases... or just make it for 1 year...

Snuggums Posted 21 Aug 2014 , 1:46am
post #3 of 15

AAatkt....It would be 4 to 6 times a month, each month, I was thinking of taking about $10 off of delivery price, not really the prices of the actual cupcakes and cake pops, it still takes the same amount of time to decorate and make

AAtKT Posted 21 Aug 2014 , 1:49am
post #4 of 15

I must have miss-read... I do that sometimes... 

 

A discount is still up to you... but I would still get a contract for such a thing...

Snuggums Posted 21 Aug 2014 , 1:53am
post #5 of 15

ANo worries it's okay, thanks for the advice, I'll make sure we discuss that when it he agrees on my prices, thanks so much!

cakesbycathy Posted 21 Aug 2014 , 2:33pm
post #6 of 15

I'd give him free delivery, unless it's significantly out of your way to deliver or will take more than an hour.  Make it a year long contract and let him know that you'll have to re-evaluate pricing after a year to be in line with pricing increases in your ingredients.  I'm pretty sure milk is going to be more expensive in a year :wink:

MimiFix Posted 21 Aug 2014 , 8:25pm
post #7 of 15

A contract? Like when we sign up for cell phone service or cable? :wink: I can see a customer committing to cell phone service for two years, but cupcakes and cake pops?

 

Maybe I'm old-school, but we sell food in a competitive, over-saturated market. I'd be more concerned with proper pricing.

Dayti Posted 21 Aug 2014 , 8:45pm
post #8 of 15

Quote:

Originally Posted by Snuggums 

Aatkt....It would be 4 to 6 times a month, each month, I was thinking of taking about $10 off of delivery price, not really the prices of the actual cupcakes and cake pops, it still takes the same amount of time to decorate and make

Actually, that would be true if the cupcakes were always the same. As it stands, it sounds like he wants different designs every week, so it takes you longer since you have to rack your brain thinking of new things he's never seen before. At least if the cupcakes were all the same, with a logo or something, you could do a whole months worth at once. Then you could pass on the time-saving discount.

 

And there's no savings to be had by delivering to the same place on the same day every week or 5 days. If he wants delivery he should pay your normal prices for that, or come and collect or send a courier if he doesn't. Or, look at it this way - discounting $10 per delivery means you lose $40-$60 dollars from this client per month.

 

The only one who can really decide if it's worth your while discounting the cupcakes and cake pops, is you. 24-36 cupcakes and 48-72 cake pops per month is not worth a discount in my opinion. I wouldn't discount that whole order if it was for 1 wedding or birthday, let alone splitting the amount into 4 or 6. I sell wholesale to a couple of places, but they order a lot more than that so it IS worth my while discounting to get their business. 

 

And I don't have contracts either. And when my prices go up, clients like it or lump it. A bit like when the supermarket or the gas bill or my wholesaler's prices go up...I stay with that company or I don't. I do send a new pricing sheet to them though, for courtesy's sake. 

 

Good luck to you with what you decide!

JRMcCakeBake Posted 21 Aug 2014 , 8:47pm
post #9 of 15

How about after every 10th order (or whatever number you decide) he gets 6 free cupcakes or 12 free cake pops?   

DeliciousEmma Posted 22 Aug 2014 , 1:46am
post #10 of 15

Okay, so 4-6 times a month would make it at least once a week.

 

I suspect the reason why the idea of a contract was brought up is to protect against the situation in which he could get his discounted product for a few months and then gradually not order as regularly but still want to get this regular customer discount. I don't see him signing a contract as he can't guarantee how often he will order even though he thinks it will be 4-6 times a month. Snuggums still has to protect herself somehow but a contract might not be feasible. Snuggums should give him the discount after he has established himself as a regular customer eg. full price for 11 months and discounted/free delivery/product/whatever during the 12 month to reward him for doing business with you for a year.

 

Snuggums is right in my opinion not to discount the price of her product. It still takes the same amount of time to make and decorate as she says. I read the OP again and I may be wrong, but it doesn't sound like he's asked for a discount so I probably wouldn't offer one straight away.

TheItalianBaker Posted 23 Aug 2014 , 1:35pm
post #11 of 15

I agree, your goal is to have him ordering your product. So I would say, every 10 orders you get this $X amount off, or free delivery.. something like that!

Norasmom Posted 23 Aug 2014 , 1:46pm
post #12 of 15

Do you think the customer will ask for a discount?   I am rue you wont't, but…don't offer unless it is brought up.  

-K8memphis Posted 23 Aug 2014 , 2:07pm
post #13 of 15

great selection of ideas already-- i would wait till they become a long time customer then decide -- got the cart before the horse -- i'd just give them worry free awesome products for the regular prices you charge plus delivery--

 

that small a repeating order plus delivery is a pia big deal as far as your time and gas, insurance, vehicle wear & tear, stress in traffic, time, rain snow heat -- i'm tired already --

 

he needs to be tipping you rather than you discounting him before it even begins -- i tip my pizza peeps --

 

i vote no discount

MimiFix Posted 23 Aug 2014 , 11:16pm
post #14 of 15

Why do we continually undermine our baking businesses? Please, stop already with the discounts. 

AZCouture Posted 23 Aug 2014 , 11:35pm
post #15 of 15

AYep.

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