Originally Posted by annabellas
I am new to this forum. I too own a GF bakery but it is part of a natural foods store. We are just beginning to sell wholesale to other stores but may have the opportunity to sell to a local restaurant chain. Would anyone have pricing suggestions? Would the wholesale prices be the same to stores and restaurants? I'm thinking bulk purchasing would deserve a discount. Plus it's easier to cost out the ingredients and labor but since the bakery is part of a larger store, utilities, etc are harder to determine. That would be for our general retail selling price.
You need to do some research to determine how similar items are priced at other retail stores/restaurants, and compare that with your costs (ingredients, labor, allocated overhead) to see how much room you have for markup, if any. Generally markups for upscale grocery stores are around the 40-50% range, so if this will push the final retail price beyond what your target market will pay then wholesale may not be workable with your current cost structure without giving up some of your profit margin. The acceptable retail price range will probably be higher at a restaurant than a grocery store.
If your product will be put in display cases you need to make sure the issue of cross-contamination is addressed in both the company's processes and training given to anyone handling GF products.
There's also the question of shelf life. As I'm sure you're aware, GF products don't last as long as non-GF products, so this needs to be addressed in terms of delivery, storage (freezing the products may help), and sell-by dates, plus your contract should specify who pays for expired product.
Regarding allocated overhead, you could go with a two tier allocation process where bakery-specific overhead (e.g. depreciation for a commercial mixer) is allocated to bakery items only and regular overhead (e.g. utilities) is spread across all products sold. Or, to simplify things you could just allocate all overhead to all products, regardless of whether or not they are bakery items.