Does anyone have any experience supplying your products to local shops? I was recently in a food fair where I was approached by a tea shop wanting to expand their dessert options. They're located in a popular shopping mall and it sounds like a wonderful opportunity. However they did mention repeatedly they're looking for "great prices wink wink" which to me translates as cheap. Anyway I don't even know where to start. They loved my cheesecakes for example, but I don't know how much I could lower my prices and still make enough profit. I've considered modifying recipes to lower prices and to keep products ordered directly through me as the originals but I get the feeling that could leave room for hurting my image and that of my products. For those of you who have gone the route of supplying, would you say it's worth it? How do you handle the business side of terms, conditions and negotiating? I appreciate any info! :)
Run away from them. Fast. They sound like they just want prices cheaper than Costco. Don't lower your product quality to make it cheaper. Repeatedly saying they want a "great price" in my experience working the retail return desk is the same as saying they want it severely discounted (item is 50% off, they want another 25% off because packaging is torn which they did themselves).
Also, check your laws regarding selling wholesale, in my state (FL) you must be a licensed commercial kitchen to sell wholesale, no cottage food law people (we can't sell cheesecakes under ours anyways).
IF you want to look into supplying wholesale, look at what it would cost you to buy in bulk, then pass those savings along to the customer and make sure there is a minimum order in place $$$ to make it worth your time/effort to store all that bulk plus to cover the membership fee (most bulk stores have a yearly fee to shop there).
Don't haggle your prices, you will sell yourself short!
Selling products wholesale can be a great way to grow your business but you have to be smart about it. Cheesecake is a potentially hazardous food, so if you are working under the CFL, find out if that's a product you're allowed to make; also find out if you're allowed to sell wholesale. If you have a full license, then you have no issues with either.
Price your products and give the business a discount. Typically the discount is 25% less than retail - perishable products are often discounted differently than merchandise. Not all of your products may be worthwhile for you to sell wholesale. Decide which ones you will offer and make a list. Don't let anyone pressure you into lowering your price for them.
Most people equate "wholesale" with "volume" but this is not always applicable. Wholesale is selling products to a business that resells goods. So while you may give the business a 25% discount for perhaps two dozen cookies, you make one sale and don't have to stand at the farmers' market selling one cookie to each of twenty four customers over the course of the morning. And that business is reaching a market you may not be reaching.
I began my baking career under the CFL in NY, where wholesale is allowed. I sold at the farmers' market and to several businesses. My income supported myself and young daughter. Best of luck to you!
I'm sorry for responding so late but I do appreciate and thank you for all the tips you've given me. I'll take another look at my options. Thanks again!