Order for Two Thousand - HELP with Pricing!

Hi, NOMI, Congrats on making your first post. I look forward to many more to come!

@NOMI Just an FYI - You originally posted this question to our blog. Our blog is only for fully developed tutorials and articles and is moderated; our forums are the place for one-off questions to membership like this, and they are not moderated (so questions there post immediately). Anyway, I moved this question from the blog to the forums. Please read our "About" and "Site FAQ" sections for more information about where certain content goes on this site; this will help it land in the right place next time and hopefully get posted faster.

Yes! Thank you so much!  Still learning 😄😄😄

I wouldn’t take the order, too much work and stress.  I wouldn’t discount since you will probably have to hire help.  

Regarding the actual question, discounting only makes financial sense when there are economies of scale in a certain business, meaning that the producer realizes some savings too by making things in bulk. You might have small savings in making  a lot of dough or icing, but only if you have very large mixers that allow you to do large batches. I rather doubt you can speed up the most labor-intensive (and therefore costly) part, which is the decorating. You may, in fact, have added decorating costs if you need to hire people to help you. One might justify discounting the order, just to get his/her foot in the door, especially if s/he felt this would be a large recurring order. But I personally wouldn't do this unless I knew I had priced the order profitably to begin with and that I could handle the volume and sustain that pricing over time, as once you've quoted a lower price to a customer, there is typically no going back.

That all said, the best way to price any order, be it small or very big like this, is to go back to the fundamentals of figuring out how much it's going to cost you to produce the order; then price to ensure you cover those costs, pay yourself and any employees a decent wage, AND also leave profit to go in the bank or to fuel investments in your business. The "Business of Cookies" section of our blog has some excellent articles about how to do cost-based pricing, and pricing in general, so you might want to check it out.

Let us know what you decide to do and how it goes. Best of luck!

I'm assuming they're not selling your cookies, that it's a promotional give away?  Maybe they just admire and respect your work and want to support local small business.  If that's the case, they're not expecting you to discount. 

If you want to build a relationship with them, think ahead to the next time and what you're setting yourself up for.  If you're thinking you'll get a lot of exposure so it's worth discounting for the advertising, we've all been there too.  How much business will you lose  because you have to pass on baby and wedding showers and birthday parties full of your specific target customers because you're busy making free cookies for people who would never, ever pay $3 for a cookie? 

It's a wonderful compliment to have been invited to bid and regardless of what you decide or whether you win the job, you can pat yourself on the back and enjoy the validation .

Hi @NOMI, 

I have a similar situation, although not quite as large order (500 cookies, round, white base and company logo). I’m just wondering what happened in your situation? Did you accept the project? If yes, how did you go about pricing, cost-based? Would love to hear more and learn from your experience.

Thanks!