"Cupcakery" (credit, retail business, wholesale, sales)

[AsymptoticFaery]

Thinking about finally doing something with my cupcake recipes and selling cupcakes to the public. I will have to take a test in order to get a food handlers permit and I know I'll need rental time in a certified commercial kitchen to prepare my comestible goods.

However, I am in Los Angeles and I am aware of how the whole cupcake trend explosion has dramatically had an effect here on new shops that have opened up in the last several years. Cupcakes are THE thing now...in most big cities.

There are so many places that offer cupcakes in so many varieties that I am wondering if this market is too saturated in my area to be a good place to sell my goods on the side.

Anyone have any tips or advice in this area of business especially in my location?

I am looking to sell my goods to stores so that they carry my baked items in hopes of making a profit and getting my recipes known to buyers. I am also looking to eventually sell directly to the public Not sure if this is going to be through an online storefront or attending food pavilions and events where I can rent a booth to showcase my goods to passerbys.

[sunsprit]

Getting food product(s) into retailers is a very competitive business, and you're up against some real powerhouses.

Consider that ... even if you have the absolutely best product of it's type in the area, without any peer for taste or creativity or visual appeal ... you have no established track record as a business or supplier.

Now, look at that from the standpoint of a retailer. Will this supplier be able to meet my demand consistently in a timely manner? Are they able to stock my inventory on the shelf? Can they remove stale merchandise and credit me for it? Will they have a consistent product quality that matches or exceeds what I can get from other suppliers? Is their wholesale price point set so I can make a profit on my space comparable to what I get from other product lines? How's the "eye appeal", packaging, and ingredient list? Nutritional values? Advertising subsidy?

IMO, you'd be better off to focus on product sales through Farmer's Markets or Local Harvest type sales. Scale up your production to meet those demands, and then when you have a steady local trade built up ... then you'll have something to approach a local retailer with in terms of proven demand and local market acceptance.

Another avenue to approach would be executive chefs in restaurants that might use your product as an outside supplied item on their menu. Here again, you're competing with a lot of pro's, not to mention the restaurant itself (if they have a baker in-house). A very tough way to go for you ... there will be a lot of "cold calls" with sample product, if you can even get the appointment.

Finally, there's always the possibility of just jumping into the retail business yourself. Perhaps if you expand your product line-up to a full service "panaderia" type retail outlet with breads, sweetbreads, and your specialty items ... you might have a real business on your hands. Of course, this takes a significant cash outlay up front and the dedication of many hours of work upon your part ... so it may or may not be worth it. There's a reason why franchise donut shops or cinnabon type shops are a success story in the trade ...

[desertsun41]

Maybe it's not as competitive as you think. Whatever the case may be, in this economic depression tell me who is buying cup cakes for $2.50 each? maybe in your little niche in Southern Cal where everyone is a millionaire.

I know personally the success of your idea. Yours truely has the contract to build the showroom cabinetry for The Cupcakery in Las Vegas. The Cupcakeryâ„¢ which is long since compete and open for business. They now have 2 stores and will be franchising to Southern Cal this year or next depending on how many more millions of people continue to lose their jobs.

If you can strategically precisionly place this store in a shopping mall where people already do stop at specialty stores you have a good chance of success. Next to a grocery store you will lose. If you can strategically precisionly place your store in a heavy walking traffic main street with walkers and snack nibblers you have a good chance of success, like an "old town village" kinda place.

Further you can expand into offering a few fancy drinks like mocha and coffee. As long as you blow the doors off Starbucks prices you will win. What's wrong with charging just $2 for the same drink that Starbucks charges $5 for? It cost about 20 cents to make it. What you lose in single sale profit you will more then make up for in volume.

Good luck.................!

[desertsun41]

I forgot to add. As you said there is a new fad for gormet cup cakes. There is also a new fad for bunt cakes. There are several special stores just selling bunt cakes.

Be carefull though. The bakery as we know it is dead. People go to grocery stores for bakery goods unlike in the old days when we made special trips to a bakery for real home made baked goods. What is sold in grocery stores is just crap.

[AsymptoticFaery]

Thanks you guys for the tips and advice. We've already been working on recipes...testing stage. We will definitely focus on becoming and growing as a catering business for the time being and hopefully see a chance to gain a storefront shop in the future.