Okay, this is Damian from Online Food Marketing. So, in this video, I'll show you how co-packers charge you in three different methods. And if you're curious about how much co-packers charge for food enterprises, you'll like watching the rest of this film. I'll go over the three methods they use.
I'll give you some price options. That's what we're going to do right now. As I indicated in the beginning, this video will go through three different ways that co-packers for your food business would charge you in order to help expand your business, create the product for you, and even ship it to the locations where you need it to go. So, before we do that, let's have a look at this question. As is customary, this is the first video you'll see online that promotes food. Damian Roberti is the owner and founder of Marketing Food Online. I'm a business owner. Over a decade ago, my wife and I launched our e-commerce food enterprises. That's what prompted me to create a YouTube channel to share everything I've learnt over the previous 12 years with you.
So, first and foremost, let's get started. So, depending on your demands, the services that co-packers can really supply you, and the time it takes to create your product, co-packers charge in three distinct ways. Before we get into those three, let's talk about when you should utilize a co-packer. This is a question I receive frequently through our Marketing Food Online Yahoo email. When should I utilize someone like Damian as a co-packer? So, if you're manufacturing a food product at home and doing so under the cottage food legislation, and you've had a lot of success doing so, you're generating money. And, while you're certainly remaining within the constraints of cottage food legislation, you'd like to venture out and expand.
Bakery Co - Packers Baking Business Co Packer List .
Barbara's Bakery, Marlboro, MA, 800-343-0590, www.barbaras.com
Snacks, Cereals
Bellows House Bakery, North Walpole, NH, 800-358-6302. www.bellowshouse.com
Cookies, Brownies, Baked Desserts
Better 4 U Foods LLC, Delray Beach, FL, 561-314-9642, www.better4ufoods.com
Pizza Crusts, Organic, Gluten Free
You've already built a local client base, but now you want it to be accessible on a website, perhaps in a retail shop, or even at local cafes, but you've reached the limit of your capacity to manufacture the numbers required to expand your business. That is an excellent beginning point for approaching a co-packer. When you initially start a firm, approaching a co-packer is absolutely not a good idea. You have a concept, you've designed packaging, you've established a label, a logo, and a brand, but you don't yet have any proof of sale. You have no evidence of concept or proof of notion. As a result, no one is aware of your product. You don't want to go up to a co-packer and say, "Hey, can you make five, six, or 7,000 units of this product?"
Because I'd like to sell it at that point. The objective is to generate some local buzz or go online with your offering. Start selling on Amazon, eBay, and Etsy if you don't have access to a business area and can transport the product over the internet. What you want to do is to be able to create extra sales, grow it, and perhaps even get it into retail stores or a national supermarket chain. That's an excellent point. You should call a co-packer right away since they can make a product for you in a short amount of time. However, make more than you could reasonably accomplish on your own. This is because a per-unit fee is the first form of charge a co-packer will levy in order to make the product.
Now, this may be specific to the sort of product you manufacture, but we contacted 16 different co-packers. In order for them to make the product on an individual basis, we received a range of pricing ranges, ranging from $0.30 to $0.60 per unit. So, for example, let's say I called the co-packer and said them, "Look, I'm going to acquire approximately 5,000 or a thousand units of your stuff." I'd want you to create it for me. The co-packer will give you a price per unit. So, dependent on the quantity of an order, that range between 20 and 20, anything between 0.20 and $0.60 per unit, will be the range per unit. Then you'll receive an estimate and know how much it will cost. Okay, As a result, the first category is a per-unit fee. Okay, so an hourly rate is the second way a co-packer will bill you for their services.
Bakery Co - Packers Baking Business Co Packer List .
Now, this is a bit more of an expensive venture in certain circumstances, because the range that we discovered was between $20 and $70 per hour. Again, depending on the type of product you make, for example, if you hire a company to make trail mix for you, the idea of mixing a trail mix together, putting it in a bag, and labeling it is obviously very different than if you have a spaghetti sauce or a saucer, or a much more labor-intensive product that has to be chopped, measured, cooked, cooled, and then put into a canning, jarring, or some other process.
This is likely to vary a lot. So, don't misunderstand me. Depending on the price per unit for the sort of product you're manufacturing and how it'll be created, some of these may be affordable. Then there will be others that are considerably more labor-intensive, which will be a little more on the expensive side. As a result, you must include in the cost that the co-packers will utilize when calculating your wholesale pricing; either per unit or by hour. And you need to make sure you're paying that cost when you pass that price point on to your retail business as a wholesale pricing point or if you sell it to someone who will resell it. They're planning to purchase it for a wholesale rate. You want to make sure you account for those expenses as well, right?
Bakery Co - Packers Baking Business Co Packer List .
Third method: If you're looking for the typical co-packer markup pricing point, you'll use the third method. Okay, the third option is a fixed day charge. So if they're going to charge you, a fixed day rate works. You will be charged a fixed fee for the full day by the co-packer. Normally, such time span is in the range of eight to ten hours. We discovered a handful of co-packers that did spices and worked between eight and ten hours every day. They'll charge you a specified sum of money. This is a rather creative way to go about it. And, because it's not per unit, one approach to make the most of your workday is to produce as much as possible. It is not divided into hours. You've had them for the entire day. So, if you can create a particular quantity within that day, this may be the most advantageous option in terms of your investment. For the whole day, the price range was between $500 and $1,000.
This, once again, relates to what I said only a few moments before. Because your product, such as dry spice rubs, nut blends, or trail mixes, requires special processing, you'll want to be cautious. Things that don't need to be cooked, cooled, and measured to the point where you have ingredients and a whole bunch of stuff going into it are going to be a lot cheaper, and they'll take a lot less time to create. When you utilize a co-packer, the more complicated and complex the product, the more probable you will have a propensity to have a little bit more on the upper end in terms of cost. So, that'll be the summary of the three primary methods that co-packers will charge you, so you can figure out how much they charge. You'll want to make sure you take a look at it. I'll be releasing a video soon.
This will provide you with a list of true hidden expenditures that many individuals overlook when working with co-packers. Not only may they charge you in these three methods, but they can also charge you in a variety of additional ways that you may not be aware of. Also, I'm working on my next film, which I'll make and distribute to the co-packers. I'll go through the many costs and considerations that you should be aware of, as well as the questions you should ask your co-packer. So, as usual, if that was useful, please let me know in the comments section below.
These are the three distinct methods through which you can be charged. And, as I previously stated, I believe the latter one is very useful, particularly when you're a small organization looking to develop or scale. It could be more cost-effective to hire a co-packer for the full day at a fixed charge. So, if you have any questions or thoughts regarding this, please leave them in the comments section below, and I'll see you guys in our next video.
Thank you for taking the time to watch Marketing Food Online. And if you want to launch a food truck, a home-based food business under the cottage food legislation, a franchise, a packaged food business, private label your own food items, sell on Amazon, get your own online shop, or sell food online, Take precautions. Remember to subscribe and watch these videos for much more information.