Have You Ever Been Approached-Contractor Type Arrangement
Business By lilthorner Updated 2 Feb 2011 , 9:45pm by tryingcake
I have been approached by a pair of ladies that are about to open up a dessert bar and bakery in my city. I am custom orders only, operating out of a licensed rented kitchen. They were given my number by my aunt and initially they wanted to hire me, but after they found out I had a biz, they understood that I wasn't looking for a "job" so we talked and they mentioned possibly a contractor type thing, or a referral type thing.
They don't do fondant cakes, nor anything sculpted, etc. so if they were called about a type of cake they expressed interest in a few options:
1. I decorate their cake for pay. (customer wouldn't know about me) on a project basis
2. they take the order and say "we have someone that can do that"
3. they say we have someone who can do that and give them my number
of course the owner mentioned a referral percentage if 2 or 3 happened and her partner (sister) asked "why would we take a percentage if she was doing all the work?" which I completely agreed with, but the owner was basically saying they would have "given" me the business as opposed to just saying they couldn't accomodate.
I told them, I would consider some possibilities and get back to them.
I was asked one time about doing something similar. They wanted me to contract with them but I had to use their recipes and such. Why would I want to do that when I have my family recipes that are well known by anyone who knows me. Then I would get a percentage of the cost. Does she think I'm nuts? Not a chance.
3. they say we have someone who can do that and give them my number
They don't "have" someone who can do that, they "know" someone who can do that, if they're giving out your number. I think #3 is the best option if they'll refer you for free because they don't do this type of work. Especially since you aren't looking for a job, and option 2 could involve miscommunication between you and what the customer really wants. It also eliminates the need for you to deliver your cakes to them for pick ups (unless you're expected to use their kitchen instead of yours).
If I were you I would work out a wholesale arrangement where you would provide them premade baked goods on a regular basis they could sell at a markup (with your branding of course). For custom cakes, they would pass the customer to you (via web site or a flyer that ordering info for use over the phone) and you could offer pickup at their bakery as one of your delivery options.
I don't see the need to give them any cut of the custom cake sales, but they should still be happy since they will be making something on your premade items, and you will be driving more walk-in business to the store with custom cake pickups.
Number 3 should have said "they know"
I don't know what I could offer them for wholesale. I don't know what their menu is (they will be opening next week and I didn't ask to see their menu. They do offer custom cakes, but they don't offer the fondant etc.
Maybe there I nothing we can do seeing as how, if they are just giving out my number I wouldn't want to give them a percentage or even a "referral fee" because I WOULD be doing all the work. I was really trying to see a win win idea, maybe I have to think a little more, or maybe just respectfully decline.
I don't know what I could offer them for wholesale. I don't know what their menu is (they will be opening next week and I didn't ask to see their menu. They do offer custom cakes, but they don't offer the fondant etc.
Sounds like you should follow up with them and get more information about which products they will be offering.
If you are open to something like this, you should be the one laying down the ground rules.
(1) They pay your price (charge them as you would any other bride)
(2) Anything they charge over and above your price is their business and their percentage.
(3) All cakes are to be paid for in advance.
Call me jaded, cynical, whatever. But that would be my foundation. And since you have your own business, do you really need to take on someone who is going to take credit for your hard work and talent?
Just some food for thought.
Best wishes.
@jasonkraft. our conversation was specifically about custom cakes, if I decide I want to do something wholesale for them, I would surely get more information about what products they are offering..
@Eisskween- that was certainly one of the options, it would basically be how it is when I bake for a caterer that I partner with.. I sell the dessert to her, she sells it to her customer at her price, but I get my price. No I don't really need someone who would take credit for my work which is why the other options came in to play. I already told them I wasn't interested in doing work that I wouldn't be recognized for..
@CWR41 baking and decorating their cakes is too much like a job. I need to keep it known that this cake was done by sugah b confections..
Hopefully, it doesn't seem like they just threw this at me and I have no idea.. we had a quite lengthy conversation and they aren't trying to get over or me, nor am I trying to get over on them.. I was just looking for options other than the ones that pop into mind immediately (the 3 I listed). It may just be that we can't work anything out. I am fine with that also. But I owe it to myself to give it some thought.
her partner (sister) asked "why would we take a percentage if she was doing all the work?"
It's called a referral fee and very acceptable in this business as well as many other businesses.
That being said, A well known wedding venue here contracts with a friend of mine. Her cake is included in their all-inclusive pricing. The customer still meets with the baker (my friend), but is shown from a selection that includes that pricing. Anything other than that is extra.
I honestly don't see a thing wrong with this. They have weddings several times a week and my friend isn't schlepping for work. She gets her fee paid to her by the venue, so she doesn't have to worry about the bride remembering to pay on time - and the check is always good. She still gets to use her creativity. And I would love a steady gig like that!!
@tryingcake a referral fee doesn't suggest a percentage to me, I did think about an actual dollar amount as opposed to a percentage.. it's not out of the question..
but also, this isn't a venue, this is a bakery, so it could be a bit different..
A referral fee very well can be a percentage. I get 10% of whatever vendors I place at a wedding or other event. Different cakes, catering, DJs, florists whatever will have different charges for different circumstances. 10% is fair to everyone. If it's a budget affair, I'm taking a huge part of that budget by taking a set fee.
A million years ago in another state I had someone hire me out. Her fee was always $50. I thought that was way too low for some and too high for others. I like percentages better. Always consistent and fair.
makes sense.. I just never thought of it as a percentage..
And I found with percentages - my vendors trust that I got the most for them I could get - the more they make, the more I make and vice versa. There is never any question as to how hard did I try to get the best budget out of the customer. I love percentages.
3. they say we have someone who can do that and give them my number
They don't "have" someone who can do that, they "know" someone who can do that, if they're giving out your number. I think #3 is the best option if they'll refer you for free because they don't do this type of work.
I've referred people to other decorators when I was booked & they've referred customers to me... none of us ever expected to get paid for it. I would never pay someone to refer me. Who's to say that customer wouldn't eventually find you on their own if the other bakery simply said "I'm sorry we don't offer___."
@tryingcake, I went to your site, you do event planning.. you get the prices for your vendors?
@sherry_lyn, there is nothing to say the customer probably wouldn't find me on their own, however, the scenario at hand is the one I'm considering.. Maybe they are thinking more like the order would be pretty much guaranteed.. Who know's.. like I said in my first post.. I'm considering the possibilities
I've referred people to other decorators when I was booked & they've referred customers to me... none of us ever expected to get paid for it. I would never pay someone to refer me. Who's to say that customer wouldn't eventually find you on their own if the other bakery simply said "I'm sorry we don't offer___."
That is when you are just referring as a courtesy among peers- very different - I do that all the time. This is not at all what she is talking about. If you are signed up with the company to exclusively recommend your services it is not uncommon to pay for it. I offer a one stop shopping service. I'm no different than an agent to an actor who gets paid 10% of the actor's paycheck. And I have paid the same fee to other "agents" (as I described in the other post) to be listed as a preferred vendor to their clients (after being approved). There is nothing wrong with this practice. It's 100% above board and honest.
And every time you pay to advertise - you absolutely are paying for a referral. Same exact thing... just a different color.
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