6 ms·

There's a high end bakery in the mission called Tartine where people queue up every day to buy $13 loaves of bread. I could never justify the expense but from t

by rgbrgb 13y ago

There's a high end bakery in the mission called Tartine where people queue up every day to buy $13 loaves of bread. I could never justify the expense but from the line outside I'd say there are definitely a lot of people in SF who can. You might have a hard time scaling this outside of really posh areas, but I'd bet that if you can make a profit delivering 5$ loaves in SF that you could do it for cheaper with the same margins in less wealthy areas. Good luck to the OP!

dangrossman 13y ago
I'm skeptical there's any profit selling $5 loaves in SF. How many can one driver really deliver per hour, 3-4 trips? $20 per hour in gross revenue is barely enough to employ the driver and his fuel, let alone the bread, bakers, managers, facilities, taxes, health licenses, marketing, customer service, payment processing, etc. unless people tip very generously.
- jwheeler79 13y ago
  solution looking for a problem
  - ballard 13y ago
    Yup. Gotta find a problem and a solution and make money at it. Otherwise, it's not survivable.
- johnpowell 13y ago
  A decent loaf of mass produced bread here (Eugene, Or) is four bucks at Safeway. I do wish them the best of luck. If it was available here I would order a loaf every day. Our household tears through a loaf of bread in a day and sourdough is my favorite.
- lostlogin 13y ago
  Scooter with a basket front and back would raise delivery rate a fair bit, but I'd be surprised if it was by more than 1 or 2 loafs.
deleted 13y ago
[deleted]
spartango 13y ago
While you may be right that there exists a price point at which posh people will pay for this type of delivery service, the example of Tartine is a poor one. Tartine has been regarded as one of the best bakeries in SF for a number of years, having cultivated its reputation and following for over 10 years. It commands high prices not just because of quality, but also by its brand. This is relevant not merely to pick apart your example, but more as a sort of chicken-and-egg challenge that faces many food service businesses. By default, bakeries are a low margin businesses, making it difficult to survive the long years you need to build the reputation that enables higher margins. The businesses that have circumvented this struggle have done so by such means as owner/chef fame. With that said, I'm confident there are other ways of quickly achieving high-margin status. OP's company will have to be clever in doing so. It's unclear to me that delivery is a sufficient vehicle in this respect, except in bulk where ACME dominates.
001sky 13y ago
"if you can make a profit delivering 5$ loaves" Most delivery places require $10/min tickets. A 20 min delivery is a 40 min round-trip. @$9/hour for the delivery guy, that is $6 in costs. In other-words, -$1. This is before you've paid for the actual product. That doesn't even get to the question of "cross-town" traffic in SF. Without some sort of multi-point distribution getting accross town in 20 min would be "interesting". Mission + SOMA of course NBD. Of course the improbability drives the PR value. Somewhere between "too good to be true" and "will it break, in an interesting way?".
- kalleboo 13y ago
  In Sweden there's a popular food delivery service that simply ties together restaurants and taxi drivers. This eliminates the need for round trips, since the taxi driver can just find some other fare for the return. This works fine in Sweden which has a deregulated taxi market (=no shortage of available taxi drivers), but it wouldn't work in SF which has such an artificially constrained supply.
  - ballard 13y ago
    I like that. That's clever.
- larrys 13y ago
  You are right of course but there is also the possibility of loss leaders. And many times in business things don't make sense on the surface but play out differently. Perhaps they will have add on items that will generate more profit. Perhaps the amount of people who only order bread alone will be small. If they get funding they have the staying power to test the market and potentially find profitability. That's the big big advantage of using "OPM" when starting a business. Not guaranteed but not a non starter either. One big benefit of starting at a low price below costs (if you can) is that it keeps others out who think "we can't make money doing this".
- Pacabel 13y ago
  Any moderately busy pizzeria will queue up a few delivery orders that end up being ready at around the same time, and will have one driver deliver them all within a single trip. The trip may take marginally longer than if just one order were being delivered, but it ends up fulfilling five or six orders with one trip. The cost per order ends up being decreased to a reasonable level.

by rgbrgb 13y ago

dangrossman 13y ago

I'm skeptical there's any profit selling $5 loaves in SF. How many can one driver really deliver per hour, 3-4 trips? $20 per hour in gross revenue is barely enough to employ the driver and his fuel, let alone the bread, bakers, managers, facilities, taxes, health licenses, marketing, customer service, payment processing, etc. unless people tip very generously.

jwheeler79 13y ago
solution looking for a problem
- ballard 13y ago
  Yup. Gotta find a problem and a solution and make money at it. Otherwise, it's not survivable.
johnpowell 13y ago
A decent loaf of mass produced bread here (Eugene, Or) is four bucks at Safeway. I do wish them the best of luck. If it was available here I would order a loaf every day. Our household tears through a loaf of bread in a day and sourdough is my favorite.
lostlogin 13y ago
Scooter with a basket front and back would raise delivery rate a fair bit, but I'd be surprised if it was by more than 1 or 2 loafs.

deleted 13y ago

[deleted]

spartango 13y ago

While you may be right that there exists a price point at which posh people will pay for this type of delivery service, the example of Tartine is a poor one. Tartine has been regarded as one of the best bakeries in SF for a number of years, having cultivated its reputation and following for over 10 years. It commands high prices not just because of quality, but also by its brand. This is relevant not merely to pick apart your example, but more as a sort of chicken-and-egg challenge that faces many food service businesses. By default, bakeries are a low margin businesses, making it difficult to survive the long years you need to build the reputation that enables higher margins. The businesses that have circumvented this struggle have done so by such means as owner/chef fame. With that said, I'm confident there are other ways of quickly achieving high-margin status. OP's company will have to be clever in doing so. It's unclear to me that delivery is a sufficient vehicle in this respect, except in bulk where ACME dominates.

001sky 13y ago

"if you can make a profit delivering 5$ loaves" Most delivery places require $10/min tickets. A 20 min delivery is a 40 min round-trip. @$9/hour for the delivery guy, that is $6 in costs. In other-words, -$1. This is before you've paid for the actual product. That doesn't even get to the question of "cross-town" traffic in SF. Without some sort of multi-point distribution getting accross town in 20 min would be "interesting". Mission + SOMA of course NBD. Of course the improbability drives the PR value. Somewhere between "too good to be true" and "will it break, in an interesting way?".

kalleboo 13y ago
In Sweden there's a popular food delivery service that simply ties together restaurants and taxi drivers. This eliminates the need for round trips, since the taxi driver can just find some other fare for the return. This works fine in Sweden which has a deregulated taxi market (=no shortage of available taxi drivers), but it wouldn't work in SF which has such an artificially constrained supply.
- ballard 13y ago
  I like that. That's clever.
larrys 13y ago
You are right of course but there is also the possibility of loss leaders. And many times in business things don't make sense on the surface but play out differently. Perhaps they will have add on items that will generate more profit. Perhaps the amount of people who only order bread alone will be small. If they get funding they have the staying power to test the market and potentially find profitability. That's the big big advantage of using "OPM" when starting a business. Not guaranteed but not a non starter either. One big benefit of starting at a low price below costs (if you can) is that it keeps others out who think "we can't make money doing this".
Pacabel 13y ago
Any moderately busy pizzeria will queue up a few delivery orders that end up being ready at around the same time, and will have one driver deliver them all within a single trip. The trip may take marginally longer than if just one order were being delivered, but it ends up fulfilling five or six orders with one trip. The cost per order ends up being decreased to a reasonable level.