On my very popular, "How to Charge for Cakes" post, I got this question today:
So why do you charge so much for delivery? Shouldn’t you just charge for cost of gas? Do you mostly just have people come pick them up at your house?
I answered the question there, but the more I thought about it, I decided to address this subject with a post of it's own!
Let me first give you a quick overview of my situation. I live way out in the country... about 10 miles from my tiny hometown. And unless you live in a tiny town, you may not have a real concept of tiny towns... it has no fast food. No chain restaurants or grocery stores or chain.... anything. We have two stoplights and one school and well... it's tiiiiiny.
Then beyond that, there are 3 larger towns about 30 miles away in different directions. These are not big cities... but bigger towns in Mississippi. One of those... Natchez, MS is where about 90% of my cakes go.
Okay - so are you still with me? I live 10 miles from a store - out in the country. Then 30 miles from that town are larger towns where most of my customers are.
Now - about my cakes. I don't deliver any cakes (birthday, baby shower, etc.) outside of my tiny town. When anyone orders from me - anything other than wedding cakes - they meet me at a drug store or gas station in my hometown. This includes the 90% of my customers that live 30 miles past my hometown.
I don't ask them to drive to my house and I don't charge them extra for that. Most of the time I can coordinate and make multiple deliveries to one or two locations.
It usually takes me less than 40 minutes to drive to my tiny town, make a few deliveries and get back home. I also don't usually drive more than 20 miles total. I can also pick up groceries or run other local errands while I'm out. For that reason, I get more "bang for my buck" on time and gas and don't feel like I have to charge for that.
Now, back to the original question:
Why do you charge so much for delivery?
When I deliver wedding cakes (except for in my hometown, which is rare), I charge a minimum $75 delivery fee on top of the cost of the cake, sales tax, etc. Why? Mostly time.
Cake friends... when you're decorating cakes - you must charge for your time. When you're making deliveries, you must charge for your time.
Repeat after me... you must charge for your time.
When you're out delivering a cake, you are working. You could be home working on another order (ie., earning money) or spending time with your family - but instead, you're working. If you're doing it for free, you're giving away your time and your work.
So here's how I come to my fee.
- Time to deliver a cake: 40 minute drive to the location + 30 minute set-up + 40 minute drive home = 2 hours. $15/hour x 2 hours of time = $30.
Let me say that $15/hour is my minimum hourly rate. For you, it may be more or less but do not shortchange yourself!!
In addition to your time, the IRS lets you write off $.54/mile for gas and wear & tear on your vehicle when you use it for business purposes. I use that number to come up with my gas/mileage fee. I'm pretty sure my tank (Ford Excursion) costs more than that, but since it's what the IRS uses, I go with it.
- Cost of gas / wear on my vehicle: 80 miles round trip x $.54/mile = $43.20
I add together the cost of my time plus gas/wear... $30 + $43.20 = $73.20. I round this up to $75 and that's my minimum delivery fee.
Having talked to several other cake decorators, I have found that for many, my fees are cheap. I know one caker who charges minimum $150 to deliver and that includes ALL distances... even a few miles from his shop. Another charges $1/mile.
You really have to figure out what works for you, but please, please, please, cake friends... do not short change yourself on your time!
I'd love to hear your thoughts - what do you charge for delivery? How do you come up with your fees?
How to Package a Cake for Delivery
Aaron
On delivery I too charge by the hour and per kilometre outside the city. I have flat rates set for specific wedding venues within town. The flat rates depend whether or not I am just dropping off a cake or if I have to set up a dessert table or 100's of cupcakes. My time is just as valuable as any other!
Rose Atwater
Exactly Aaron!!
Marva Peltier
Very useful information. I did not take delivery and set up cost into account previously.
Pamela
I understand completely what you're saying as far as being paid for your time. I have found that when I deliver a cake, especially a wedding cake (of which I do NOT do many and I'll explain why in a minute), I've often found myself getting roped into helping do a "few other little things" and as I'm often making the item for friends, family, fellow congregational members, etc., its a little more difficult to say no, or a little more political if you get my drift. Sometimes its easier to just help out a bit than deal with a big stink about it later.
One issue I deal with in the county where I live in the state of Maryland (which I understand is one of the top 5 MOST difficult places in the country to have a home food business because of the MASSIVE number of (many outrageous in my opinion) health department ordinances or guidelines. If I would want to run a "business", officially, out of my home I can NOT, under ANY circumstances use my normal, every day kitchen. I must have a COMPLETELY separate kitchen with a variety of more commercial components to it. However, I can be a "hobby" baker in my home but as such I am not SUPPOSE to deliver ANY item or baked goods. I can have people come to my home to collect the item. I'm assuming this is so it gives the customer the opportunity to observe the environment where the food was prepared. Although, considering what my kitchen has looked like a few times after I've finished (just moments before) a person has collected the item I don't know if this is such a good idea. At times it looks like a hurricane has passed through the room. (can anyone relate?) I live on my own and have no help with these things. However, there is no way on God's little green earth that I'm going to hand over a wedding cake and ask someone who has never dealt with a tiered cake before to set it up, etc. (but that's between you and me so don't tell anyone OK?). I also cannot bake any cakes, pies, etc. and take them to farmer's markets, flea markets, our local diner, absolutely NOTHING. (and this one hurts as I am rather known for my cheesecake and would LOVE to take it to some farmer's markets, etc.) Bottom line, in my state you cannot begin a baking business at home (without a major financial investment) and then let it build until you're at the point you feel financially comfortable having a retail store front. I ENVY (with great big green eyes) those of you who are able to do so.
The few times I do wedding cakes I usually work into the cost of the cake the cost of me delivering it (and usually asking someone to help me) and of course, it depends on who that person may be. I'm sure everyone reading this blog has done things for close friends, etc., and you just don't feel comfortable asking for the normal charge you have for other people. But then, I don't live so far out in the country like you do. I also live in a small town (about 3,000 people) but at least we have a grocery store (not that I like it much) etc. I'm not so isolated as you are. To me, considering how far you are from most people you would spend half your time doing nothing but delivery cakes if you delivered to everyone's home. But I am a little confused about something. I'm a cheapskate much of the time, so I would be a person whom in order to save that $75 I would offer to come and collect the cake, no matter where it is located. Now I understand why you don't ask people to come to your home. I know you said because of the distance but I would also imagine it might be an issue of safety. That would be my greater concern. What do you do if the person states they will collect the cake to save the fee? Let's assume its not that big of a cake, not a wedding or anything. I'm curious.
Rose Atwater
The thing is, I ONLY deliver wedding cakes. For any other cakes (birthday, baby showers, etc.), I require that they be willing to meet me in my hometown (and there's no fee for me to take it to my tiny town and meet them). So I don't run into the situation where someone wants to come to my house to save the $75. Only twice in 6 years have I had someone pickup wedding cakes and both were very small cakes (the size of birthday cakes). On another note, I'm so sorry the laws are so strict where you live. I'm afraid I'd give up my business if I had to deal with things like that!
Gloria
I'm just starting out and wanted to know how do you arrive at your cake prices.
Rose Atwater
I have a post about it here: http://rosebakes.com/how-to-charge-for-cakes
Evy
Thanks for this post its really help me to see that I´m given away my time when I only charge for the gas... from now I charge for my time too!
Pam
Rose, I work at a grocery store in a small town and I absolutely loathe having to deliver cakes. Yes, it's the time and having to leave the store on busy days, but it's also the gravel, bumpy, pot-holed roads, the people that slam their brakes on in front of you, snow and ice on the roads in the winter, the mental stress of delivering is more costly than the time, gas, and wear and tear in the vehicle. We only charge $25 to deliver and people here have a cow over that-so I'm with you on the $75!
Rose
Oh you poor thing - I cannot imagine having to deliver all the time. I only deliver wedding cakes and don't do a lot of them so my deliveries are few and far between!
Oonagh
Thanks for this post. It has given me confidence to charge what I charge without feeling guilty or maybe too expensive as its very easy to doubt yourself when working from home. I break my delivery down into mileage/ distance of venue, petrol and set up.
Rose
That's great Oonagh!
brigitte oger
Thank you for your blog posts Rose. They have been very insightful and helpful in determining my costs. Especially appreciate how you emphasize how precious our time is and the need to charge accordingly for it. Keep up the great work. And your cakes are beautiful!
Rose
Thanks so much Brigitte!
Victoria
This is the first post I have read from you, and I have to say, I will be back. I am in the same situation, living out of town with one town 15 miles and the other 30 miles. Plus, I drive an Excursion, so I can relate. 🙂 I am just starting out though, so I haven't decided if I should build up some kind of customer base, before I make someone drive 30 miles. It might shoot me in the foot, but I need to start somewhere.
tanya
I agree! You must charge. Honestly, I like the $1/mile idea, only because I don't have a buisness license, so I don't claim what I make, meaning I dont really have the access to compute what the IRS would have charge per mile. So, the $1 per mile sounds about right. Also, charge for the drive and the drive back. Lastly, delivery is one thing, but if you are deliverying a cake that needs to be stacked at the location or be "set up", please fellow bakers CHARGE for that. ANDD! the mental breakdowns of horrible roads, potholes, and bumps! And then the cake possibley getting messed up. Good Lord. Make it worth your time!
It took my a year to really stay to that. I am a full time student, getting my doctorate, with another job, and working my practicum (which I dont get paid for), and doing this baking gig almost everyday. So my time is VALUEABLE to me.
Kate
Thank you for the post! I 've read the other comments as well and really all I can add is that if someone wants your goods enough they don't care about delivery. I always make it upfront when I respond to any inquire regarding charges for delivery, especially since wedding cakes are what I mainly do. I will drive up to two hours to deliver a cake, BUT I will charge you for it! If the customer doesn't like it, they find someone to pick up! I was so nervous to charge too much, but I realized most people don't even think twice if you act confident and make it "standard proceedure".
Funmi
Thanks for this. I love it. Love you Rose
Ker
I really like reading your blog and all the cake business into you share on it.
Rose
Thank you!
Random
I like to have high delivery prices because we make a lot on delivery due to lazy customers not wanting to pick up items. LOL.
Lana Mcintire
Thank you this has helped me because I have such a hard time determining delivery charges especially since I’m in a small town too. I have a wedding cake coming up and I’ve done there engagement cake and did a free delivery since it was down the street from me but this one is only 5 miles a way a popular wedding venue here and I’m not sure how to charge because I feel like j always give discounts because I want the business but now I’ve come to learn I don’t want to be known for that. This cake won’t require much set up prolly 30 min plus 30 min drive so that would only be $20 which is my hourly. Is that too little for a wedding delivery?
Lovelyn
Hello Goodevening from Ghana.Anyways please I wanted to ask that do you have any tips on getting customers if you decide to work from home apart from advertising on Social Media Platforms
Lindsey Metzker
Thank you so much for this! I’ve just started being asked to deliver and my initial thought was at least $15 for the hour it’ll take me (especially on a Sat. Morning!… love my saturdays with my kids). I also thought about gas/mileage but wasn’t calculating enough. I’m glad to know I was headed in (what I agree is) the “right” direction. Thanks again for the insight!
Rose
You're very welcome!!
jmorneau
Thank you for this blog post. I've been baking for a good long time, but mostly for friends and family. I'm just starting to make it a business and the TIME is not something I ever thought to factor in. Wake up call. Thank you!
Rose Atwater
Absolutely - I wish you the best for your new business!