This Friday I will be pitching my products to a deli that is specifically focused on kids and being eco-friendly. In store, apart from organic foodstuff, they also sell toys (learning oriented type) and they have a coffee shop. They are looking for someone to provide their coffee shop with baked goods. I have been put in touch with them by a mutual friend. Apparently, this place has used 2 bakers already and aren't getting what they want. The owner basically said to me let's meet Friday, do a tasting, talk about pricing and start immediately. So it sounds like I don't have any competition at this point, and as long as she likes my stuff and we agree on pricing, we should be good to go.
I already sent her a list of products and the sale prices I use in my bakery.
What would you think she would be looking at for a margin for themselves?
I understand I am in a different continent, but any general ideas would be great. Also, anything I should and shouldn't say to her when we meet?
Thanks in advance, really excited about this!
Since she's already gone through two bakers, the first thing i would ask is "what are you looking for from me?" IF you can't meet the standards that she expected from the other bakers then there is no need to even move forward with the arrangement.
As for pricing, it doesn't matter what she is looking for as a margin. You need to know what you need to sell them at. And at what quantity will you start giving a discount (and this has to be BIG and CONSISTENT so that you can actually purchase your ingredients in bulk and use them all on this order) What she sells them at after you sell them to her is her perogative. From the sounds of it though she knows what she wants, (which is a good thing) but at the same time you have to make sure you stick to what you want/need out of the business relationship. Know what your price is and stick to it, don't let her knock off 25% of your price so you make less money, she can increase the prices of her product if she wants to make more money.
Thank you for your reply Leily. Apparently the other 2 bakers' produce was/is not good (she doesn't know that I know any of this but I will enquire about their current provider). I know what it costs me to produce everything, I just hope she doesn't start trying to bring my pricing down too much. I would love to get their orders though, but not if it's going to cost me my sanity! However, I am not a great negotiator - I hope she doesn't expect on-the-spot numbers from me. I will need time to think things through, especially if she needs to me to produce large volumes. I am only small, but could take on staff if needed. But let's not get ahead of ourselves...!
And I agree, she should charge in their coffee shop at least what I am charging - otherwise why would people come to me if they know they can get my cupcakes etc cheaper at hers.
a deli that is specifically focused on kids and being eco-friendly
Okay, I have heard it all! I guarantee she will jack up your price sufficiently, I wouldn't give her a discount for anything in the world. If she asks for a discount, ask her how much she intends to sell them for, i bet you a dollar it is way more than what you sell them for.