Delivery charges?

[LotusCakeStudio]

I'm trying to develop a formula for what to charge for wedding cake deliveries. None of the cakes I've done so far are local and I need a better system of calculating charges. I live in Philadelphia and I deliver cakes to Maryland and DC, as well as New Jersey and New York. Most people charge per mile, I’ve seen it anywhere between $.60 - $2/mile, but that won't work out for me. If I deliver to say Scranton, PA which is 110 miles north of me and charge $1/mile, that's $110. It would take me 2 hours (each way) and the tolls are like $4 total or something in that ballpark. However, if I deliver to Newark, NJ, that's only 80 miles ($80) and it would take 2 hours or more each b/c the traffic is much worse. The tolls are also WAY higher. So as you can see, delivering to some places I end up losing money if I do this per mile system because in some areas, tolls are higher and traffic is worse.

So my new idea is to charge 3 separate fees to make it fair for everyone. A toll fee (if any), a time fee ($X/hour each way; I’m still working out this amount, but probably something like $12/hour...?), and a gas/mileage fee. It's just the last part that has me stumped. I also like this way of doing it b/c when gas prices go up and down, all I have to do is change that one part to get my delivery price. Right now gas is pretty cheap (compared to how it was all summer) at $1.59-ish for premium. My car gets about 20 miles to the gallon and I can drive about 4 hours on a full tank of gas. So based on that, can anyone toss some fair ideas out? Thanks.

[momoreg]

I think rather than confuse the issue, you should charge more than what it costs in time and gas. That way when you DO get stuck in traffic, the cost will be balanced out by the times when you didn't.

[W.DeBord]

Wow, I find this more than a bit suprising that you have such a large delivery area....


I tend to think you need to look at your long rang plan. For instance when you've developed enough business where you don't have the time to deliver what will it cost you to hire this out? Remember everytime you have to put on another business hat it takes your attention away from your primary focus and slows down your production. Time equals money.....

I know of a pastry shop that uses a independent service to deliver all their product. They deliver wedding cakes and everything. One time, I got really mad because this guy delivers us a wedding cake and tells me I'm supposed to set it up (with no instructions or supports). Well, long story made short..... sure enough the bakery had the florist or the party consultant ready to assemble the cake at the club and no one from the bakery came. (granted this would depend on the difficulty of the cake)


There are also florists that do this. Example, all the flowers for the club I worked at came from one florist, but the florist used a flower delivery service to deliver instead of doing it them-selfs. I know they included the delivery fee in their billing for the flowers and that deliverer didn't charge seperately, plus the deliverer handed us the florists bill and waited for the check (which she then returned to the florist). I was freinds with the lady who was the delivery driver/owner. She works for several places and loved her job being independent. These were adult professional delivery persons running their own businesses.

I think it's rather brilliant if you can arrange for someone else to do this. I'd look in the yellow pages and ask around at local businesses if they have any leads.

I know the natural tendency is to do everything your-self....thinking your saving every penny, (I've been there done that) but you have remember each time you place effort in another dirrection you loose effort you could have placed in making your business more successful.

I bet the professional delivery service can deliver cheaper than you can.

My two cents.....

[KyleW]

I'm not in the business. That said, I agree with Wendy. If you calculate your delivery charge based on your transportation costs alone you will lose money. Every minute you spend in the car is a minute not spent creating cakes. You need to be compensated for the opportunity cost of delivering the cakes. My guess is that you cakes have a higher margin than your deliveries I would investigate the subcontractor angle.

[LotusCakeStudio]

I cover this range because I only do lacto-vegetarian (eggless) and also vegan (no eggs, no dairy) cakes. Not many people do them, and if they do, they aren't very good. Either it's dry and flavorless, or too health food tasting (whole wheat flour sweetened with brown rice syrup type of stuff! *gag!*) I'm also Hindu so people from our temples are sometimes willing to pay for me to drive from Philly to New York so their wedding cake can be "made by a Hindu". There's one Hindu lady in NY who does cakes, but her work is sloppy as she's very amateur. And all she can do is copy ideas from the Wilton Yearbooks. So when they want a real cake and Hindu made, it's me or nothing.

I was thinking about hiring people to deliver the cakes, but thought I didn't need that service yet b/c I don't do cakes all that often. The way I look at it, I may as well make $12 an hour for driving down to Maryland since I wouldn't make that money anyway. I obviously make more money when I am actually doing the cake, but I figure to charge people that amount for delivery is kinda high. And at $12, I'm still making more than the average delivery guy (UPS is like $8-$9) and mine is tax-free. Then it gives me an excuse to visit with friends I wouldn't visit with otherwise as I have friends in all those states. So it works out for now. I know if I get busy enough where I had 3 cakes in one weekend- 1 to NY, 1 to NJ and 1 to Baltimore, it wouldn't be possible, of course I'd have to get someone else to deliver it. But I'm far from that stage. I don't even have the facility to do that many cakes at one time as I do this all at home, but I am looking into renting a commercial kitchen *IF* I can find one. I won't have a commercial kitchen of my own until we buy a house and have one built in the basement or something. And that's not for another 2 years. But when it finally happens.... HEE HEE HEE! MY OWN KITCHEN!!! momoreg will have to come down and play in it! Oh yeah, momo, I had been using the method you mentioned for my delivery fees and the reason why I want to use this new one is b/c that one was driving me nuts. I just like how everything is fair and broken down and I know exactly what costs what. I talked to 2 people and they get paid $.30 and $.325 per mile for their gas and mileage for work related trips. Seems about right to me so I'm going to play around with those numbers.

*Edited b/c I can't seem to spell!*

[ August 23, 2001: Message edited by: LotusCakeStudio ]

[momoreg]

Yes, I guess when you're talking about long distances like that, it pays to check out the numbers. Please keep us informed of what you decide. This is an interesting topic.

[panini]

Wow, it looks like you have found your nitche. I would calculate the charges as you would anything else. Get an average hourly rate. Calculate the actual charge by the hour then mark it up. If it's a 2 hr. trip at a cost of 20. charge 100.
Please calculate flight charges, for we get a lot of requests for this type of cake. I would be happy to refer your services.
The market for this Item is probably not as big as yours but I know from experience it's very wealthy.
Just my 2 cents
We only deliver in a 12 square mile radius and the charge is 75.-100.

[LotusCakeStudio]

Ok, I'm going to SCREAM. Last night, I wrote a long response and posted it here. Now I'm back and it's gone. *pulls out hair*

I'll try to remember everything I typed and post it again.

[momoreg]

I just informed Nicko of that problem. I know Wendy had a couple of instances where that happened too.

[LotusCakeStudio]

Thanks for looking into it!

The post just got deleted. I saw it here last night, then came back today and it was gone.

[W.DeBord]

In my case where I lost what I was writing, it happened when I kept using the back button to re-read a quote from someone else. I'd hit forward and my message would be gone and I couldn't figure out how to find it.

I probably should take a course on computors and the internet...theres alot I don't really know how to do. So it's my screw-up.

[momoreg]

With that sort of thing, you can just click on "FILE", then "COPY". When you click back to your post, you can paste what you wrote back in the empty space, by clicking "FILE" and "PASTE".

That's about the extent of my computer knowledge.

[momoreg]

Nicko is checking into the problem.

Were the posts deleted or did they not show up?

He told me that when you have a long post, save it on your computer with notepad or some text editor and then post just in case something gets lost.

[ August 24, 2001: Message edited by: momoreg ]

[KyleW]

Another way to avoid the problem might be to open another browser window. That way you just switch from one browser to another and don't use the back or forward buttons. There are 2 ways to open another browser. In Internet Explorer you can drop down the file menu and click on new and then window. You can also just click on the IE icon on your desktop again. I'm pretty sure the same is true for Netscape. You're on your own with AOL

[LotusCakeStudio]

I think I finally have it down!

For the sake of simpicity, I will charge the delivery fee based on a one way trip plus all tolls. Using Scranton, PA as an example:

110 miles x $.50 = $55.00
2 hours travel time x $25 = $50.00
tolls = $4
Total: $109.00

If gas prices go soaring up again, I can just raise the $.50 fee accordingly.

When I compare that to what Ann Amernick charges, it's like I am delivering for free! She charges $150 to deliver something an hour away and that's with no tolls. Then again, if you can afford her $6 cupcakes, you can afford to have them dropped off at your doorstep.