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El_Cadejo's avatar

What would be a reasonable percentage to ask for?

Asked by El_Cadejo (34218 points ) May 21st, 2010

I’ve always had a talent for making ice cream. As of late ive been poor, so it got me thinking selling my ice cream would be a great way to make some extra cash.

My problem is I really have no clue how the hell do even go about doing that.

My one idea is to go to a newly opened ice cream place down the street and propose the idea of doing like a flavor of the week for them. So I’d just come in once a week and make a big batch of whatever flavor for that week.

I would think asking for a percentage of sales off of said flavor would work out best for both parties.

Thing is, I am horrible at haggling so id rather just cut straight to it. What would be a reasonable percentage to ask?

I hate saying it cause i sound like i bragging about it, but to give everyone an idea, the last batch of ice cream I made was pineapple ice cream with caramelized pineapple/syrup swirled in.

The syrup the pineapples were cooked in was honey,butter, brown sugar, cinnamon, nutmeg, cloves, and vanilla.

Only thing i have to change is next time add graham crackers. mmmmmm

Adversely if anyone has any other ideas that would work for me, im all ears :)

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16 Answers

MissA's avatar

A percentage is a difficult thing to arrive at for several reasons.

The owner’s overhead, including but not limited to, other product, location, insurance, advertising, employee expenses, equipment.

You are coming in with a flavor of the week. You will have to ‘haggle’...even though you might not want to…simply because of the nature of the proposition. Of what are you entitled to make a percentage? Only on the ice cream of the week? Is the owner prepared to keep track of it?

I’d be interested in the follow up, should you decide to do this. And, I wouldn’t post your recipes…just not a good business move. Good luck.

El_Cadejo's avatar

@MissA there is plenty more in the ice cream ;) i just list basics.

I agree with what you’re saying though.

And yes, i would only be asking for percent of whats made on that flavor. Maybe asking for a flat rate would be easier, but i still have no clue how to even arrive that such a number for that.

YARNLADY's avatar

Power Home Biz has an excellent article. I direct your attention to the Government Regulations section near the bottom of the page.

There are several other sites that can help. Search for starting a home food business

MissA's avatar

@YARNLADY that’s a great idea.
@uberbatman Would you be providing the ingredients or would the owner have those costs as well?

El_Cadejo's avatar

Id prefer the owner since those ingredients will all be on site anyway. Id obviously expect that to be factored in as well, which is why i said percent from the profit.

@YARNLADY good article, thanks for that. Another reason i want to be able to do this in the ice cream place

RedPowerLady's avatar

Wait, wait. Can I have some ice cream? After I taste it I’ll tell you what percentage to charge. But I must taste say 10 flavors, for free, and a gallon each :P

Serious question. How much does it cost you to make the ice cream? Or how much would you expect it to cost the business owner?

Jeruba's avatar

The owner would expect to pay for the product and sell it at a markup. I can’t imagine your getting any percentage other than the percentage represented by what you charge. That’s a better deal for you anyway, right?—because you get paid whether they sell it or not.

El_Cadejo's avatar

@RedPowerLady Its hard to say, because it varies based on flavor, but id have to say I can make just over a quart for under 5 bucks. I would imagine this number would drop if i were buying ingredients in bulk rather than just buying say a pint of heavy cream at a time.

@Jeruba Well the reason I was thinking of going the other route is, its less a risk for him. I dont know if he’d be willing to just pay me out flat rate. At least with the percentage thing, if it doesnt sell, its nothing really lost on his part. The other thing is, if i do decide to just say ok, ill charge him x for a batch of ice cream, i have absolutely no clue wtf to say to charge at that point either. I mean if i knew maybe what his mark up percentage on other ice cream he sells there was i could possibly base my price off that so we both make out, but im pretty clueless.

Buttonstc's avatar

Why not call the local SCORE office and request a consultation?

The acronym stands for Service Corps Of Retired Executives.

These are all experienced people volunteering their services for free. They do their best to match you up with someone in the field you are pursuing.

I’m sure they could also give you plenty of helpful info you never even thought to as about.

I’m sure there’s an office in Philly. Let us know how this turns out. After all, this isn’t too dissimilar to how Ben and Jerry got their start.

You might also give a call to The Restaurant School in West Philly as they’re familiar with food and price markups.

For something like you’re thinking of, some of this is location specific as to what the market will bear.

Have you approached an ice cream shop owner yet? Or do you have a specific one in mind as a potential?

roundsquare's avatar

A heads up – I think you are going to have to sell the first few batches at a low rate, to show how good it is (unless the owner already knows).

john65pennington's avatar

Good idea, but remember you must follow your town and states health codes for making any product consumable by humans. in other words, your ice cream has to meet the health codes in your kitchen and will require a license. call you local health department and ask about health code requirements. good luck.

El_Cadejo's avatar

@john65pennington Yea, i know about all the codes and what not, thats why i want to make it at his ice cream shop.

i went to culinary school so we covered all that stuff

RedPowerLady's avatar

@uberbatman So is a quart the amount you think you would sell? Or more like a gallon?

El_Cadejo's avatar

@RedPowerLady gallon would obviously make most sense, i was just saying quart cause well, thats what ive been makin for my consumption :)

RedPowerLady's avatar

So about 20$ to make it then which would serve how many people do you think? I read that there are 16 half cup servings in half a gallon of ice cream. So for a gallon that would make 32 half cup servings. But i’m assuming a serving is more equivalent to a cup. So if you make one gallon for 20$ then you would be able to feed 16 people. So to cut even you would need to charge at least 2$ per cone. So probably 3$ per cone to make a profit for you and the lender which is average price for a small cone of ice cream. So if you are talking profit you are talking 1$ profit per cone. How much of that 1$ do you want? I mean if you only serve 16 people that is 16$ split in half, 8$ profit. Am I doing this right?

augustlan's avatar

I know this doesn’t answer your price question, but wanted to suggest another outlet for sales. I’d consider hitting up local independent restaurants, and offering to make “homemade” gourmet ice creams for their desserts. Many indy restaurants buy pastries from local bakeries, so why not ice cream from you? You might get more than one client that way. You could still specify that you use their facilities. Take samples in, and talk to owners. If you don’t know what to charge at first, be honest about that. They can help you, and you can always raise your prices if it turns out not to be enough. Good luck, and keep us posted!

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