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Some decisions in business just don’t add up.
So, what would you do if a new manager told you to stop supplying the one product that always sold out and gave them the highest profit?
Would you try to explain the numbers to them?
Or would you give them exactly what they asked for?
In today’s story, a baker finds herself dealing with this exact situation.
Here’s what happened.
Business owner doesn’t know maths
I have been selling baked goods to a local coffee shop for over a year. The shop recently got a new owner, and they are trying to make some changes.
The new owner has already made some questionable choices, but it’s really none of my business. I just show up a few times a week and drop off various items for them to sell.
At the end of the week, I drop off an invoice, and they pay me. All is well.
For a while, I brought a cake each week. Each cake is pre-sliced, so the staff has no work to do.
Here are a couple of relevant details: One, the cakes always sell out. Two, the cakes have the highest margin for her.
I sell her a 12-serving cake for $40. She sells it for $5.25 a slice.
The owner decided she didn’t want any more cakes.
So she makes about 1.90 per serving. For most of the other items, she only makes .85-1.00 per serving.
Recently, the new owner told me to stop bringing cakes. She says they are too expensive.
So instead, I’ve been bringing cupcakes. They sell for $4.00 a piece, and I bring 12 of them, charging her $3.15 each.
Now, she only makes .85 cents a serving.
No cakes, though, so she is happy!
Wow! That makes no sense at all!
Let’s see what the fine folks over at Reddit have to say about it.
Yeah, that’s their problem.
Here’s a good explanation.
This could work.
Here’s a similar story.
Maybe she was just trying to temporarily reduce costs.
Either way, she’ll figure it out one day.
If you liked that story, check out this post about an oblivious CEO who tells a web developer to “act his wage”… and it results in 30% of the workforce being laid off.