I've got a food related/ retail store. I'm looking at diversifying (times are tight, everywhere) and think we've got a great market for a fresh baked cupcake line. I've been researching for about 6 months- even developed a basic and delicious line of cupcakes. But, I don't really want to get into the cupcake baking business. I've tried to identify someone who would be interested in leasing space and having dedicated space in the store to sell cupcakes. No takers at this point, but a lot of folks interested in kitchen space for rent. I consider hiring someone to do the baking but don't have the money, time or knowledge to oversee their work.
My last resort is to find someone interested in providing them essentially wholesale / for resale.
My research seems to show cost of goods (food costs only) of about .25-.35 per cake. This doesn't change much regardless of whether you use mix or bake from scratch.
Does that "cost per cupcake" (food / ingredient costs) seem right to folks?
In my store we'd typically mark up our food items x 3 - x 4 to keep it inline with the rest of our operating costs (rent, utilities, labor, etc). The consumer market here will obviously support paying more than $1 /cupcake.
My thinking is that I should be looking for someone who can provide cupcakes around (or under, really) that price point ($1). Given that I still have to package (which can be as expensive as the cupcake itself), and staff the sales of the cupcakes, it isn't exactly a land mine of profit. Again, I'm looking for an alternative that complements what we already offer and serves an unmet need in our area.
Is that an unrealistic price point for a well made / decorate cupcake?
Do most bakeries aim for 30% food costs? More or less?
I've read hundreds of posts here in the last few days and can't seem to get my head around this clearly.
Any thoughts or ideas folks have would be appreciated. Please be gentle.