Selling Cakes At A Bakery

Business By something_sweet Updated 5 Apr 2009 , 4:18pm by leah_s

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something_sweet Posted 5 Apr 2009 , 1:24pm
post #1 of 8

I currently work out of my home, but have an offer from a bakery in my town to start selling my cakes. At first I was really excited about the idea, but now that I am thinking about it, I am not so sure. In the contract, she requires that I bake all my cakes (even ones that are not being sold by the bakery) in her kitchen. For using her oven, she is going to charge me $10/hr. Then, any cakes that she sells at her bakery and I make, she is going to take a 25% commision! So I figured this out on an 8" layer cake:   
Retail Price   $32.00
Bakery Commission  -$8.00
Baking fees  -$5.00
Ingredient Costs  -$10.00
My Profit   $9.00 (?!?!)

I don't want to crazy on my (retail) prices or no one will buy the cakes, but it isn't worth my time to only make $9.

Does anyone else have this kind of set-up with another business? How does it work for you? Does this sound like a fair deal or not?


7 replies
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sweetcakes Posted 5 Apr 2009 , 1:50pm
post #2 of 8

what kind of a bakery doesn;t already sell cakes? this is a great deal for her, she doesn;t have to pay a baker, an icing maker or a decorator. Its not a good deal for you. just how many cakes do you think you can bake and decorate in one day, you will have more then a full time job if you take this on and you wont be making anything. i dont think she needs to double dip into your profits by charging a commission and an hourly fee, it should be one or the other. step away if the offer doesn;t change.

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foxymomma521 Posted 5 Apr 2009 , 1:56pm
post #3 of 8

I think you should show her your figures and tell her why that won't work for you. That is absolutely unfair that she is making more from the cake than you!

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waddayaknowjoe Posted 5 Apr 2009 , 2:57pm
post #4 of 8

Sounds like you're getting the raw end of the deal.
This deal sounds almost like a beauty salon. Where the beautician or barber pays for a booth in a salon.
I made cakes and pies for a diner a few years back and she paid me 20$ per cake and 15$ per pie. I did this twice a week while I worked a full time job in a factory. It was a good side job until she had to close her business. The most I spent on cakes were 5 or 6$, if I was making carrot or italian cream cakes, because I had most of the ingrediants around the house.
I used my own standardized house oven and there were no fees and/or commisions.
To me 25% commision is rediculous, 5 or 10% would be justified considering she's taking 10$ off the top an hour for the use of her oven. Which is a bit too high, maybe 10$ a day would be just. I agree with "sweetcakes", she's saving tons of cash by contracting you than hiring a cake baker/decorator.
You are better off doing word -of -mouth and keeping the sum to building your own home based or store business.
It's what I'm trying to do.
Good luck to you!

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bakingatthebeach Posted 5 Apr 2009 , 3:11pm
post #5 of 8

Sounds like you can open your OWN shop to make that kind of money. But at least it would be your own!

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geri4292adams Posted 5 Apr 2009 , 3:11pm
post #6 of 8

From what you've said so far about the whole ordeal.....All I can say is ...

RUN...RUN AS FAST AS YOU CAN......Remember that someone who is in business will look out for themselves first and others last.

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solascakes Posted 5 Apr 2009 , 3:17pm
post #7 of 8

Doesn't sound good to me,but you have to accept what works for you.

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leah_s Posted 5 Apr 2009 , 4:18pm
post #8 of 8

Good deal for her.

VERY bad deal for you.

What's your counter-offer?

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