Returns: The Wholesale Bakery Tax

Jump to section

• Overview & contents
• i. Important Notice
• 1. Executive Summary
• 2. A Note on the Name
• 3. The Market and Why Scale Is the Enemy
• 4. The Product Strategy
• 5. SWOT and Competitive Position
• 6. Route to Market
• 7. Unit Economics and Prime Cost
• 8. Returns: The Wholesale Bakery Tax
• 9. Energy
• 10. The Five-Year Build and Its Gates
• 11. Funding
• 12. People and Production
• 13. Food Safety and Compliance
• 14. Financial Projections
• 15. Break-Even
• 16. Sensitivity and Scenarios
• 17. Risk Management
• 18. Implementation Timeline
• 19. Returns
• 20. Key Performance Indicators
• 21. Key Assumptions
• 22. Conclusion
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Capital Schedules
• C. Appendix C: Funding and Debt Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

Bread and confectionery are sold to small retailers on a sale-or-return basis. What does not sell comes back, and the bakery absorbs it. This is the cost line that most first-time bakery plans omit entirely.

8.1 How returns are controlled

• An order book per shop, not per route. Recorded offtake by line, by shop, by day of week. A spaza shop near a school takes different volumes on a Wednesday than on a Saturday, and the drop should reflect that.
• Drop quantities adjusted weekly. Against actual sales rather than against the previous order. A shop that returned six pies for three consecutive days should receive fewer pies, and that adjustment should be automatic rather than negotiated.
• Returns reported by route and by shop. An aggregate returns percentage hides the two or three shops that account for most of it. Those are either overloaded or badly matched to the range.
• The route salesman measured on net sales after returns. Not on gross delivery. This is the incentive that determines whether the other three disciplines are actually applied.
• Returned product handled once and disposed of properly. Never re-delivered. A stale pie returned to a different shop is a food safety incident waiting to become a reputational one.
• Shorter-life lines restricted on marginal drops. Cream and custard products should go only to shops with demonstrated offtake, because they are the lines that come back.