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 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?