Have you been thinking about adding wholesale accounts to your bakery but have unanswered questions?
Are you worried that you will not make enough money if you have to lower your prices for wholesale?
I’m going to show you how to create more profit for your bakery business by adding wholesale. You will learn how to find new wholesale customers by seeing a need, and solving the problem. We will talk about networking, sending out samples, and following up to offer a high level of service. I will show you exactly how to price your items so that you make a profit. After reading this article, you will be able to expand your business reach by adding wholesale and still being profitable.
The first bakery that I opened was a French Bakery and Cafe, serving both retail and wholesale customers. The shop was small, about 1100 square feet. On a busy day, we would serve about 35-50 lunch customers and sell approximately 100 assorted pastries, cakes, tarts, croissants, muffins, and cookies. In addition to the retail business, we offered wholesale and delivered our baked goods daily to twenty different Starbucks and multiple local restaurants and cafes. While the storefront was always bustling, over two-thirds of our business came from the wholesale accounts.
What is a wholesale bakery?
Wholesale means that you are selling products business to business. Retail, on the other hand, is when you sell as a business to a consumer. In the bakery sense, it means that you are selling your baked goods to someone else who will then sell them to a consumer.
How to get wholesale bakery customers
So you’ve decided to add wholesale, but aren’t sure how to go about getting your first wholesale account? Here is what I did to grow my wholesale bakery account list.
Identify a need in your niche.
I read somewhere that the most successful new businesses are run by people who knew the industry well and saw a need. Think of your wholesale business as a fix for something missing in your niche and offer a solution.
- Are there lots of sandwich shops but no good bread bakeries?
- Does an independently owned restaurant need a custom dessert?
- Do you have a strong brand that your customers would buy elsewhere if other merchants would carry it?
- Your favorite coffee shop has great coffee but never has a quick grab and go option? Show them how you can provide jars of individually wrapped breakfast cookies in fun flavors.
Network with your community
Networking may sound a little uncomfortable but it’s just another way to say “talking about your business” with other people. Some of my biggest wholesale accounts were people that I met at the gym, other parents at my kid’s school, and restaurants where I liked to eat.
Cold Calling other businesses
Cold Calling is when you are speaking to a business that you have had no previous contact with yet. You introduce yourself in person, by phone or email and tell them what you sell and how you can work together.
The key to successful networking is offering solutions to problems
When you are cold calling or networking, really listen to what their struggles are and then emphasize what you offer that could solve their problem.
A restaurant isn’t satisfied with frozen bread they are using? Show them what you can offer that is fresh-baked daily.
A busy office building needs weekly meetings catered? Emphasize how easy it is to have your company deliver dessert platters with different assortments each week.
Put all your wholesale bakery information in print
After you introduce your business and let them know how you can work together, the next step is to share the details of how you operate.
Here are some of the things people will want to know about your business:
- Your wholesale menu
- What are your delivery days and times
- What are your prices
- How do you handle payments ( C.O.D or invoices)
- Is there a minimum for delivery
- Do you require an agreement or a contract ( I would only recommend this if you are purchasing custom ingredients)
- What is the preferred way for them to place their orders (text, email, voice mail, etc)
- Packaging ( will items be individually packaged for resale or bulk packaged in boxes)
Follow up with bakery samples
After you have networked or cold-called customers and provided your menu and pricing information you need to follow up and see if you can answer any questions they have.
One of my favorite ways to do this is to drop off samples. Put together some treats that you think they will possibly order, and a few extra copies of your menu and prices as well as a business card.
How to price bakery items for wholesale
There are several steps you need to go through to price your items for wholesale. I’ve linked to some of my other articles that go more in-depth on each step.
Your food and supplies cost
The first step for your resale and wholesale pricing is to know what it costs you to make something. I’ve got a full article dedicated to this with links to great costing resources. check that out here.
Your direct labor is how long it takes to make a recipe. I don’t usually include oven time. Calculate this at the wage of the person making it. If it’s yourself and you don’t know, make your best guess at what you would pay someone like yourself to do that job.
Be sure to include the cost of disposable items involved in creating the sale. Parchment baking paper, cupcake liners, or disposable pastry bags should all be reflected in the recipe cost.
Your overhead is all of the monthly operating expenses involved in running your business. It includes your rent or lease payment, phone, internet, gas, electricity, etc. To calculate the overhead cost per item, you will need to know how many items you sell each month. If you divide your overhead expenses by the total number of items, you can add it to the price so that you are sure to cover your expenses.
Calculate this in the same way as overhead. Add up all the expenses associated with delivery. Gas, driver wages, and auto maintenance. Divide this by the number of products that get delivered each month. Add that amount to the cost of your wholesale items to make sure you are covering the cost of wholesale.
After all of your costs are covered you would be breaking even. Since you’re not in business to break even you need to mark up your products to make a profit.
Each business and industry is different, but I like to mark up bakery wholesale by 20% and retail by 40%. By doing this you are making a profit on wholesale, while still allowing your clients to have room for a mark up themselves.
In conclusion: you can expand your business reach by adding wholesale while still being profitable.
Adding wholesale is a good way to create more profit for your bakery business. Now you know how to find new wholesale customers, see a need, and solve the problem. Sending out samples and following up with your new future customers shows them you offer a high level of service. Most importantly, take the time to price your items so that you make a profit. You can add wholesale without worrying that you will lose money by lowering your prices.
Let me know in the comments what type of products you are adding to wholesale. I pick a different reader each week to highlight in my emails, it could be you!
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