Shop wants my cupcakes :-)

MsCupcake

Hiya!
I make cupcakes. Hence the name. Well a local shop wants them to sell, but what do i do next. Iam new to this side of the business as i make them at home and deliver them locally to homes and I set up for wedding also. So what iam asking is what do i have to do with the Shop manager...like negotiate price? How deliveries work? and how often i would get paid...monthly...weekly? Sorry question may seem stupid but I am new to this side.
Thanks.

WIZE

I love cake

Do you Deliver to Celbridge , Kildare

I dont have advice but good luck with your Business

Boom Boom

Hiya Ms Cupcake,

like negotiate price? Yes
Make sure your price covers all your outlay associated with producing them i.e. the flour, eggs etc but also the gas used in the oven your time and anything else you can think off

How deliveries work? [COLOR="rgb(65, 105, 225)"] I imagine the shop will want them delivered direct to the store by you[/COLOR]

how often i would get paid...monthly...weekly? [COLOR="rgb(65, 105, 225)"] to start off with maybe bill him weekly to keep a tight control of cashflow and billings and if it goes well maybe push it out to fortnightly [/COLOR]

Have a look at the thread about the mobile chip van some tips in there about setting up a food business i.e. Food safety authority and such things
http://www.boards.ie/vbulletin/showthread.php?t=2055807106

Hope this helps.

91011

as cupcakes is a manufacturing business you may find that there are grants available from your local enterprise board. There would certainly be loads of help available - if they sell well, you may have a nice business that could end up as an employer of others.

mmm... I'm hungry now.

MsCupcake

Most Haunted.....I am afraid Celbridge is a bit too far unless it was for a wedding supply of cupcakes or something that would make it worthwhile.

Boom Boom.... Thanks for your help. I have costed the ingredients but having trouble putting a figure on ESB but i think of something also my time. Not sure what bakers get on a hourly rate but when i love doing it it hard to put a price on it. I am registered with the EHO as home baking is low risk and once your careful and clean and not to cook home meals a the same time its all ok.

91011....I haveny gone down the route yet of the enterprise board as i am still currently working part time. I don't expect that to last much longer (construction industry).

Thanks for all the comments.

91011

retail price in USA seems to be about $3

nice site - http://www.gigiscupcakesusa.com/

The shop will have to add vat to your cakes - possibly 13.5% but could be 21%.

I'd say a retail price of €2 - €2.50 which allowing for vat and 25% profit for the store would suggest your selling price of about €1.20 - €1.50

Obviuslky as you are under the vat threshold, you don't need to charge vat, but the store has to add it to their price.

Bandara

91011 wrote: »

retail price in USA seems to be about $3

nice site - http://www.gigiscupcakesusa.com/

The shop will have to add vat to your cakes - possibly 13.5% but could be 21%.

I'd say a retail price of €2 - €2.50 which allowing for vat and 25% profit for the store would suggest your selling price of about €1.20 - €1.60

Obviuslky as you are under the vat threshold, you don't need to charge vat, but the store has to add it to their price.

That's insane pricing imo, shops have had to completely redo their bakery offerings as the demand for 1.50-2.50 impulse buy cakes has just vanished.

We are now offering 70c-1.50 as the vast majority of the offerings. People are simply not going to spend 4.50 or more on a takeaway coffee and cupcake (which bear in mind is a smallish sized cake)

I'd personally advise selling to the store at 1 euro with an rrp for them of 1.59 which gives them a margin of just over 35%, this should be enough to keep them happy, I'm presuming your producing each one for 10 or 15 cent each ?

Also I'd put in place a minimum order quantity of 20 units, and I'd be asking for a good chest high shelf location beside the coffee machine and also maybe in a basket (that you could provide) on top of the deli counter. You can also suggest the store does a half price with a coffee deal to get the cakes up and running initially, you can agree to share the cost with them (they most likely won't go for it but it's worth a shot)

Another thing worth keepig in mind is that it's a big thing for you to get into the first store as you can then name drop them when you approach other stores which in turn will win you more clients

Best of luck with it.

HT

antoinolachtnai

VAT is almost certainly 21 percent!

Price is always going to be an issue. It is just expensive to make confectionery to a high level of quality and shops and cafes are always desperate for markup. All I can say is don't compromise too much. It has to be worthwhile.

You are right to think about payments. You need to have sales orders (when they order from you), delivery notes (which they sign when you deliver to them) and invoices (which they pay you on foot of).

I would just ask for COD for starters, and make clear you can supply an invoice too.

Think about VAT too. I think you should stay out of VAT as long as you can. But others might differ.

You should get the pallas or crossgar catalogue and it might give you some idea on price and what markups cafes expect to make.

I would say that you should come up with some little brand or squiggle or something which would make your product somehow distinctive.

Thoie

MsCupcake wrote: »

I have costed the ingredients but having trouble putting a figure on ESB but i think of something also my time.

A standard domestic oven is usually around 3,000 watts, so one hour of having the oven on high would cost approx 50cents. I'm no good at baking, so don't worry too much about the intricacies, but if cupcakes take 30 minutes (including preheating the oven) to cook, and you can fit 25 in the oven at a time, that means your electricity costs per cupcake is about 1cent

Minimum wage is about €8.65 an hour, I'd pay myself at least a tenner an hour if I was you. When calculating the hours for a batch of cupcakes, take into account shopping time (for the ingredients), preparation and cleaning up time, and time taken for delivering and taking orders.

So, at a tenner an hour, preparing just 25 cupcakes, if it takes me an hour to prepare, cook and clean, and another hour to deliver and take the order, that's 80 cents per cupcake for my time - obviously if you can make 50 cupcakes in the same period then you can charge less for your time.

DoMyBooks

antoinolachtnai wrote: »

VAT is almost certainly 21 percent!

Price is always going to be an issue. It is just expensive to make confectionery to a high level of quality and shops and cafes are always desperate for markup. All I can say is don't compromise too much. It has to be worthwhile.

You are right to think about payments. You need to have sales orders (when they order from you), delivery notes (which they sign when you deliver to them) and invoices (which they pay you on foot of).

I would just ask for COD for starters, and make clear you can supply an invoice too.

Think about VAT too. I think you should stay out of VAT as long as you can. But others might differ.

You should get the pallas or crossgar catalogue and it might give you some idea on price and what markups cafes expect to make.

I would say that you should come up with some little brand or squiggle or something which would make your product somehow distinctive.

Did you just pluck the VAT figure out of the air or is there some reason you believe its 21%?
VAT on Cakes is reduced rate of 13.5%

Bandara

Vat on cakes is 13.5%

antoinolachtnai

Depends. If you serve a cake as part of a substantial meal, rate is 13.5. If not, 21. At least that was what the guide said when I read it two years ago.

antoinolachtnai

Here it is http://www.revenue.ie/en/tax/vat/leaflets/food-and-drink.html

a cake sold on its own or with a coffee attracts the standard rate. You could argue that for some people coffee and a cake is a substantial meal, but good luck with that.

DoMyBooks

antoinolachtnai wrote: »

Here it is http://www.revenue.ie/en/tax/vat/leaflets/food-and-drink.html

a cake sold on its own or with a coffee attracts the standard rate. You could argue that for some people coffee and a cake is a substantial meal, but good luck with that.

I only see reduced rate for cakes on that link?

Goldenquick

Cupcakes are very popular in Ireland at the moment, so take advantage of it. They sell in our town at 1.80, area's population 4,272 approx. I believe they sell in Dublin at 2.50. So I would think about the area you live in when pricing them, you don't want to overprice them. The retailer has overheads which you won't have as much of, staff, rates, etc.

Do you put the little decorations on the top of them? If not I can get you the address to order them from U.K. I'd advise also to make the bases not just cake, but to do a mixture of carrot/walnut ect. What kind of toppings do you have on them. Do you use buttercream or different ones? I can also give you a link to someone on Facebook who does it for a living where you may get some good ideas. Get the edge on any competition before anyone else sets up as well. The very best of luck with it.

MsCupcake

Thanks for all the great replies. They are very helpful. i will let ye know how ye get on. I sell them to friends and family for batch of 12 for 15euro but wedding ones are a bit dearer as there is more involved. They do cost me about .20 cent to make 1 basic vanilla thats without the icing which is another .17 cent and the cases are .03 cent for your plain white ones and then you have to add sprinkles. So there is alot involved before you add my time in making them and the esb.

golden quick i would love that website. Iam finding it hard to find bulk supply of these items. I do make basic vanilla, carrot, chocolate with buttercream icing or cream cheese icing for the carrot ones. PM me the facebook page to check out. thank you.

Ive a very busy weekend ahead of me so will let ye know how it goes with the shop.

Goldenquick

I'll get you the website/suppliers later this evening. My friend is at the moment working, (bakery lol). Mmmm they do sound yummy! Will pm you the FB page now.

MsCupcake

Well called to my shop manager this week and got a great spot in their shop near the coffee machine.
They already had a deal with coffee & muffin 2euro so couldn't take that spot but I am happy they are just in there.
Well down to the financial side. I gave a price of 12 cupcakes for 15euro to the manager and she said no problem so I am getting 1.25 per cupcake.
Its great as they have a few shops in the town and she said if they well there that i can supply the other two shops. Yipee.
I do think that is a good result for a beginner. I believe all my costs are included in that and the bonus would be to get more business from there for parties and weddings.
Thanks for all your information it was great.

A cupcake a day is OK.

irishabi

Congrats! Thats brilliant, I hope it all goes well for you.

Lunaarli

Hi OP,

Just wondering how your cupcake business is going?!

Axwell

A pm would probably work better seen as the thread is over a year old.