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Selling your stuff to a storefront/business. . .

post #1 of 14
Thread Starter 
Anyone currently doing this? My SIL has a friend who owns a successful deli in my town and mentioned my decorating to her and her friend is interested in meeting me. According to my SIL she does bake but doesn't do much with decorating. I have no idea how to go about this and while I want to see what she says first, I'd like to be semi-prepared. The only thing my SIL said was to have an up to date price list. Any one do this or have any prior experience with selling to a business? Advice of any kind? icon_lol.gif
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post #2 of 14
the first thing i would do is call your health department. If you already have a licensed business to sell direct to the public that may not be enough. Some states/counties (ok most) put the selling to another business as wholesale and then you fall into other guidelines about packaging, labeling, and what is required in your kitchen to be licensed.

Also, dont' be tempted to give "wholesale" prices unless you can really buy your ingredients in bulk for a cheaper price. And by wholesale i mean A LOT of product, not just large for them, it needs to be a large amount for you.
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post #3 of 14
I do this in 3 differet locations and its great. But you have to stick to your prices.

On the first visit I did bring some samples as well as some pictures of my work.

I gave them a price list as well as ordering guide (how far in advance they need to order items)

Hope this helps.
post #4 of 14
Quote:
Originally Posted by leily

the first thing i would do is call your health department. If you already have a licensed business to sell direct to the public that may not be enough. Some states/counties (ok most) put the selling to another business as wholesale and then you fall into other guidelines about packaging, labeling, and what is required in your kitchen to be licensed.

Also, dont' be tempted to give "wholesale" prices unless you can really buy your ingredients in bulk for a cheaper price. And by wholesale i mean A LOT of product, not just large for them, it needs to be a large amount for you.


and "large" is not 4 dz cookies or cupcakes. (I've seen that too often on here.) Wholesale pricing should reflect significant (!) cost savings, such as bulk packed cookies (120 cookies, one big box); a large CONSISTENT order so you can purchase large quantities in bulk (50 lb bags of flour from Sysco vs. 5 lbs bags from walmart).

When I'd get a request for 'volume' discounts, I'd tell them, "I give a volume discount to a client that orders 300 cookies every single day. Now .... What kind of volume were you thinking of?"
post #5 of 14
I love IndyDebs answer! I'm saving that one.

And definitely I agree with Leily. I thought I read on here in NJ you cannot bake from your home. So I will assume you have a legit kitchen, license, etc. I can tell you in NY where I live (different by county to county), you can have a home processing permit. But there are very strict rules on packaging and labeling, etc. So you will need to investigate all of that first. It may be the department of Health. For whatever reason wholesale falls into the Dept of Agriculture here in NY. Either way you may have to really dig to get the right answers. I found I played a lot of phone tag and called several different departments before I got my answers.
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post #6 of 14
Quote:
Originally Posted by indydebi

and "large" is not 4 dz cookies or cupcakes. (I've seen that too often on here.) Wholesale pricing should reflect significant (!) cost savings, such as bulk packed cookies (120 cookies, one big box); a large CONSISTENT order so you can purchase large quantities in bulk (50 lb bags of flour from Sysco vs. 5 lbs bags from walmart).

When I'd get a request for 'volume' discounts, I'd tell them, "I give a volume discount to a client that orders 300 cookies every single day. Now .... What kind of volume were you thinking of?"



Case in point. I have an order from a corporate client this month and it is 20 dozen (240) cookies one day each week 3 weeks in a row. So total of 80 dozen cookies. They did not get a wholesale price because of this order. I could buy some of my ingredients in bulk, but since it was a one time trip to get them i didn't really save anything b/c of gas. Now if they were going to do it every other day or weekly they may have gotten a small discount b/c i could buy more of my ingredients in bulk in one shot, but not for this small of an order.
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post #7 of 14
Thread Starter 
Thanks for all your advice ladies!
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post #8 of 14
Quick question though...I have always heard that what I charge should be just as much as what a "retail" outlet would get. If I sell to a retailer at my normal "retail" price, won't they have to raise the price on my product? I'm confused on this one...

The advantage for me in selling to a retailer would be that it would be a consistant order in a design of *my* choosing (decorated sugar cookies) which means I could tag it onto something else I am already doing that week. Additionally, I do absolutly no marketing for my business, so getting the word out about my cookies is worth a little something to me.

How have you all handled the issue of pricing in regard to a reseller's price?

Thanks so much for your help!
post #9 of 14
Quick question though...I have always heard that what I charge should be just as much as what a "retail" outlet would get. If I sell to a retailer at my normal "retail" price, won't they have to raise the price on my product? I'm confused on this one...

The advantage for me in selling to a retailer would be that it would be a consistant order in a design of *my* choosing (decorated sugar cookies) which means I could tag it onto something else I am already doing that week. Additionally, I do absolutly no marketing for my business, so getting the word out about my cookies is worth a little something to me.

How have you all handled the issue of pricing in regard to a reseller's price?

Thanks so much for your help!
post #10 of 14
"bump"

I have the same question regarding the selling price to a retail shop. In my case it would be a small cafe/bakery. I would be making decorated cookies in their kitchen (space that I rent). Thanks.
post #11 of 14
In order to be successful and sustain your business in a long term selling wholesale, your wholesale selling price should still be enough to pay yourself a decent wage AND take a profit margin.

Ideally your wholesale price would be equal to your DTC retail price, and the retailer would apply their markup and end up with a selling price more expensive than your direct price (but people will pay for the convenience). If this is not possible and you have some room to reduce your wage/profit margin and/or can use the increased volume to improve your efficiency you can set your wholesale price below DTC retail.

You have to be ready to walk away from a wholesale deal though. We had the opportunity to sell our products at Whole Foods, but with their 45% markup we would either have had to sell at a loss or have WF set the retail price above what the market would bear.
post #12 of 14
Also, at least in my state, (NJ), you need a wholesale license, (which cost more money), you have to deal with health inspections from the state not just my local health inspections, there are all requirements regarding labeling and packaging and expect visits from weights and measures people regarding the scale that you use to weigh the product. I did it for a year with cookies and other small confections and decided not to renew my wholesale license. Not really worth it plus it cut into my custom cake business. JMHO
post #13 of 14
I have turned down several cafes that have asked me to do product for them. Here they generally want a 50% discount. The ONLY way this would work is if they ordered a lot of product at a time or I had many cafes that order product from me at the wholesale rate. Generally speaking, a cafe only wants a few dozen at a time, so no way is that beneficial for anyone but the cafe.
post #14 of 14
I have a wholesale candy account that is national. The volume, the fact that I do not retail these products, bulk cheap packaging, and the ability to purchase these ingredients in larger quantities, gave me the opportunity to sell wholesale and maintain my hourly wage and profit.

For my wholesale cupcakes in a retail location, we changed the size. I use tulip liners, she gets standard liners. The change in size allows me to have the same price per cupcake online and retail. Again, the larger overall volume, no packaging, a standing order, and easy method of volume baking instead of 12 cupcakes for an order, allows me to make the same per hour rate as my retail. This location actually has a retail bakery area for my cupcakes and desserts. She is advertising this segment as a scratch cash and carry bakery business with all clients knowing that they are my products. It works out great for both of us.

If you can't make what you want wholesale, it isn't worth doing.
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