Retailers must ask themselves if the products they want to offer for mail order will hold up well during shipping.
Bellows House breaks down the cost of packing, shipping and labor for each mail order to account for its impact on bakery overhead.
Sticky Fingers Bakery offers eight products for mail order, including its Sticky Cinnamon Buns, shown here.
Amy Bouchard provides radio stations with Isamax’s 5-lb. whoopie pie as a giveaway for the stations’ listeners.
Amy Bouchard recalls a telephone conversation with a woman in Alabama who had called to order Bouchard’s Wicked Whoopie Pies after having seen them featured on the Oprah Winfrey Show the previous day. Until then, Bouchard, who owns Isamax Snacks, Gardiner, Maine, had sold her whoopie pies solely to wholesale accounts and customers of her two retail stores.
"The woman said, ‘You had better run for the door’," Bouchard recalls. "She repeated this a couple more times as she placed her order. I replied that we’re fine and that everything would be okay." At that point, the bakery had received only a few calls for the pies.
"After two days, it was insane in our bakery. Hundreds of orders were coming in, and I couldn’t stop thinking about what that woman had said." Bouchard acknowledges that she tried to manage nearly every task herself. "We filled all of the orders, but we nearly went crazy doing it."
Lesson learned: Asking for help is a good thing, she says. That was in November 2003, and since then mail order sales have increased. December volume via on-line orders alone rose from $50,000 in 2005 to $100,000 in 2006.
Bouchard is among a small yet growing number of retail and specialty wholesale bakery operators who have expressed interest in offering mail order products. Much of the interest has emerged as consumers use the Internet to seek unique gifts and businesses have learned to use the Internet to market their products.
To assist bakery operators who may be considering mail order sales, Modern Baking sought ideas and suggestions from bakers with established mail order units.
Is mail order right for you?
"Most importantly, what’s your product’s sales potential? Do you have a unique product or one that will fill a market niche?" asks Tom Root, managing partner, Zingerman’s Mail Order, Ann Arbor, Mich., an affiliate business of Zingerman’s Bake House. "Will it hold up well during shipping and represent your bakery well?" Though Zingerman’s Mail Order and Bake House are related, Mail Order is a wholesale customer of Bake House, purchasing breads, cookies and pastries, and of Zingerman’s Deli.
Root suggests bakers ask themselves the following questions: How will mail order affect your bakery’s production capacity? Will you offer a product or products that you must bake in response to demand or can bake in anticipation of demand? What equipment and how much labor and space will you need, not only to produce the product but also to pack and ship the orders?
Assuming that you decide to add mail order, you "need to have a structure and procedures in place to manage your sales leads, database and order fulfillment," says Lois Ford, co-owner, Bellows House Baking Co., Walpole, N.H., a specialty wholesaler of cookies and pastries that also offers mail order gift packages. "Unless your sister or brother-in-law is a genius with computers and database management, you must go to an outside expert, such as a reliable company that specializes in Web site management and software, to fit your needs."
Bouchard’s Web master maintains her site, www.wickedwhoopies.com, including updating requirements for state sales taxes and monitoring sources for unique visitors, such as from Google and links on other Web sites. She spends about $200 a month for a sponsored link on Google, which generates about 500 hits a day.
Isamax’s site is secure, she says, which means customers may purchase with credit cards, taking comfort that their information is protected from on-line identity theft. "Still, many people are nervous about using their credit cards online. So, when they place an order by phone, we allow them to mail a check. After we receive the check, we ship the order," she adds.
Customer information must be collected accurately and orders processed on time, Ford says. "For example, if your carrier has to correct an address, it can generate extra fees. The customer may have provided the incorrect data, but who really knows? Then, you have a choice: Charge the customer, or eat the cost."
Marketing do’s and don’ts
Do not count on a Web site as your primary source to promote mail order sales. "Unless you have a very unusual product, you will not show up high on Google’s listings," Ford adds. "You will have to consider advertising elsewhere."
The Web site designer for Sticky Fingers Bakery, a Washington, D.C. vegan retail bakery, ensured that the site’s information included "words important to get Sticky Fingers to appear high on search engines’ lists," says Kirsten Rosenberg, co-owner of Sticky Fingers. She also uses the site (www.stickyfingersbakery.com) to distribute a newsletter and to announce product specials.
If you have a retail store, prominently display that you offer mail order shipping. Also, contact local radio stations, and provide product for on-air prizes to listeners, Bouchard says. "We have provided our 5-lb. whoopie pies to stations to give away to listeners who call in response to on-air contests. When discussing whoopie pies, the DJs also mention that the pies are available for shipping. Though we provide a $20 item, we get a lot more in publicity."
She suggests sending e-mail inquiries to online gourmet magazines, asking whether you can forward product samples and be included in their product listings.
In addition to compiling names of Web site visitors, a retail bakery, of course, should collect store customers’ names to develop its mail order list.
Telephone orders offer ample opportunities to generate add-on sales. At Zingerman’s Mail Order, most deli orders are gift boxes and nearly all include at least one Zingerman’s Bake House product, Root says. To help maintain this level, telephone sales reps pursue suggestive selling, such as recommending that a loaf of Paesano bread accompany the gourmet olive oil. The corporate web site (www.zingermans.com) states that Paesano bread is Zingerman’s best bread for "ripping and dipping into a great olive oil."
Managing mail order requests
Bellows House (www.bellowshouse.com) programs mail orders each day into its production schedule and into its pick system for packing. Finished product is shipped or sent to the bakery’s freezer for later shipment. To account for mail order’s impact on each day’s overhead, the bakery establishes the costs for packing and shipping materials and labor to assemble each type of package.
A call center at Zingerman’s Mail Order enters telephone orders into a software program for future shipment. At the appropriate date, the system produces a packing slip for packing and shipping. The system enables the company to offer club programs, in which customers receive products, such as two different loaves of bread, each month for a year.
Because December sales can account for as much as one-half of annual mail order sales, companies often begin planning no later than October. "We must carefully coordinate our efforts with the Bake House to ensure that demand does not outstrip production capacity," Root says.
Sticky Finger’s Rosenberg notes that pressure increases after the bakery is featured in a local newspaper article or on national television, such as the Food Network. "That exposure can generate about 400 orders within two weeks," she says. "It can mean paying overtime and a premium for packaging ordered on short notice."
To help ensure production and order fulfillment efficiency and keep errors to a minimum, Isamax’s Bouchard suggests keeping the number of different products offered to a minimum initially. "You don’t want to become overwhelmed and make mistakes or find that you cannot fill orders."
Isamax first sold only classic whoopie pies; currently, it offers 20 versions. Packaged pies are frozen at 0˚F until shipping. Thawed pies have a 12-day shelf life. Packaging does not require ice packs or dry ice because the pies contain no dairy products, Bouchard explains.
Freezing product also enables the bakery to maintain sufficient inventory to handle spikes in orders. "This is especially helpful when we know our bakery or whoopie pies will be featured in a magazine article or on a television program," she adds. "We plan a week in advance for the anticipated increase in orders."
Zingerman’s Bake House bakes and freezes sour cream coffeecakes, its best-selling mail order item, in November for December shipments, according to Frank Carollo, Bake House managing partner. Nearly all bread shipped is sourdough based. "We ship few French baguettes, Italian bread, challah or other yeast breads because they lose their freshness so quickly," he says. December shipping volume balloons to as many as 2,000 coffeecakes and 5,000 bread loaves a day. During the year, the Bake House’s production volume increases 30 percent to 60 percent on days that Mail Order ships product, Carollo adds.
Last November, the Bake House hired 30 temporary workers to augment the 100 year-round employees. "They helped prepare bundt pans for the sour cream coffeecakes and other bakeware, scooped batters and packed pastries, for example," he explains. For bread, they prepared ingredients, staged flour, cleaned proofing baskets, performed basic shaping and assisted in loading and unloading ovens. "It’s important work, but the type that people can learn quickly. We benefited as this past December was the most civilized ever at the bakery," Carollo adds.
Importance of packaging
The bakers cite the importance of selecting appropriate packaging that is sufficiently durable to withstand the rigors of shipping, while allowing attractive presentation, label placement and cost containment. For example, Isamax wraps whoopie pies individually because they are messy to eat. Each pie is placed in a plastic bag, which is twist-tied. This allows bagging uneaten portions to keep them fresh.
Three bagged pies are placed in a plastic sleeve; four sleeves are placed in bubble wrap packing and wrapped in decorative cellophane, which is tied with a large ribbon. The wrapped pies go into a corrugated shipping box and a company label with an ingredient list is placed on the box.
Bouchard advises operators give their products a "wow" factor to make them stand out from competitors’ products. Isamax employees read each order to learn why the pies were ordered—birthday, Christmas or Chanukah, for example. "Our ‘wow’ factor is a bow, which ties colorful cellophane that specifically marks the event, and a hand-written gift card," she says. "Hand-writing the card, instead of using a computer, separates us from our competitors."
Mail order food products are required to have ingredient and nutrition cards or labels, frequently placed within each packaged product or affixed to its package. Bellows House’s Ford notes that several software programs are available to help calculate a product’s nutrition information.
The bakery posts photos of assembling gifts, arranging a product in its container, the finished container, location of the nutrition label, steps to tie the ribbon, placement of padding in the shipping box and so on. In addition, a spread sheet with photos of the finished gift explains what’s needed to prepare them and their shipping packages.
Each operator recommends testing shippers by shipping your product to yourself and to contacts in a couple of out-of-state locations. Most importantly, you will learn how well your product ships. They also recommend meeting with different shipping companies at your facility to discuss your shipping needs. Then, ask for their costs. Later, as your volume increases, negotiate for reduced shipping costs.
Most operators use two-day shipping because products are perishable. They note that shipping two-day air limits shipments to Monday through Wednesday. Otherwise, Saturday delivery increases costs, or a package could remain in a warehouse or on a doorstep where environmental conditions could damage the bakery foods.
Ford says hidden shipping costs can be burdensome. "Because we have perishable products, we don’t want shipments returned. Our shipper is instructed to abandon shipments that cannot be delivered," she explains. "But the shipper almost always returns packages, ships them overnight and charges us for the shipment. We have to accumulate the returns, contact our account rep and seek credits for the shipments, which means more time and paper work."
Zingerman’s Mail Order requires a signature release. "Leaving a package may expose it to the elements, including animals as well as foul weather," Root says. "We offer a 100 percent guarantee if a shipment is damaged or lost, which means we will forward another shipment. We do this two to three times a week, and it’s expensive."
Despite the added packaging and labor costs and logistics issues, mail order sales can enhance your bakery’s brand and broaden your market reach.
"For the Bake House, retail sales are limited to the store, and wholesale product exposure is limited to about within an hour’s drive of the bakery," Root observes. "Zingerman’s Mail Order has the capacity to deliver the Zingerman’s experience without geographic limits. Thus, many additional people get to participate in the Zingerman’s experience than would without Mail Order." Mail Order’s 2006 sales, which increased 15 percent from 2005 volume, were slower than in previous years, which experienced 30 percent to 40 percent growth, he says.
Operators agree that mail order pricing, often 80 percent to 100 percent more than store retail pricing, makes the effort worthwhile. Consumers readily pay premium prices for the convenience of buying high-quality bakery foods, presented in first-class packaging.
Mail order sales also enable bakery operators to address another way for consumers to view bakery foods. As Root observes, "Food is central to what Zingerman’s does. Yet, Mail Order is about gift giving, not necessarily the food business. Eight of ten orders are for gifts. We help two people communicate by way of a gift. That’s how we view our work."