Cost Of Cakes??

Business By indydebi Updated 4 Nov 2007 , 9:52pm by vickster

indydebi Posted 4 Nov 2007 , 7:38pm
post #1 of 3
Quote:
Originally Posted by Tomoore

Hmmmm...
I think I'm a bit confused on this one. Continuing with the eggs icon_smile.gif :
let's say I have a (1) cake order this week. and (4) orders the following week. Is the customer with the lone order this week supposed to be punished and charged more because I failed to get more orders? Or would I simply charge each one for a full dozen of eggs (inlcuding all four orders in the following week's schedule).




Your eggs will not go bad in one week. They are not going to become a scrap factor for you. You can use them.

Maybe it's because of my corporate background in purchasing, warehouse inventory control, factory scheduling, overhead budget responsibility, but it seems you guys are overthinking this. It's basic business. It's logic. It's cost control.

Either set your pricing to cover these variables or just be prepared to throw money down the drain when you have to buy 3X but will only use and charge the customer 1X.

Pricing structure is the base of any business. Variables, scrap factors, minimum buys, seasonal pricing ..... all must be factored when setting pricing. (Unless you want to have to figure from scratch the price of every single cake you do based on whatever today's pricing is and the volume/quantity you have to buy that week. Me? I just don't have that kind of time to re-create a new pricing structure with each and every cake / catering that I do.)

If you do this as a business, then you probably already know all of this. If you're doing it as a hobby, then it really doesn't matter what kind of price you charge as long as you cover your cost of ingredients.

2 replies
justme50 Posted 4 Nov 2007 , 8:21pm
post #2 of 3

I'm with Indy on this one.

If there are ingredients or equipment you have to purchase for a particular cake that are worthless to you after you finish an order, you have to charge the customer for the total cost of the items.

Eggs or a custom sized pan....it makes no difference, the customer either bears the cost or you lose money.

For example...a customer wants a particularly odd color fondant that I have to purchase and I know I will not be using it again, they're going to pay for whatever size bucket I have to buy, whether I use it all or not.

vickster Posted 4 Nov 2007 , 9:52pm
post #3 of 3

I agree, Just me, on something like an odd shaped pan, or a unique color of fondant, or some kind of unique tip that gets thrown to the back of the drawer. But to charge someone for a dozen eggs when their cake only takes three is not the same. That's a basic ingredient. It's just not ethical to charge 75 percent waste for a common ingredient because you are only in it part time. That's a cost that comes out of the part timer's profit. The full time baker is going to have a bigger profit margin because he/she won't have those kinds of waste expenses, but the full timer also has a lot more overhead. The good thing is there's not many ingredients in cakes that perish all that quickly, so I suppose this is a bit of a moot discussion.

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