Cupcake Pricing.

Business By jazzyjenni Updated 24 Mar 2008 , 5:51pm by sassycleo

jazzyjenni Posted 23 Mar 2008 , 5:57am
post #1 of 9

I live in a small town. About 2500, however we have a large surrounding population (10,000) I want to start a cupcake business but I am concerned about the custom vs. grocery issue. We have two groceries that sell cupcakes for 4$ a half dozen plus taxes. I cannot make my cupcakes for that price but I can get my costs down to about $5-6 per dozen. What would be a reasonable price to mark them up to? I'm just not sure that if I charge what they are worth that people will buy them because of the grocery prices. Also, are my cost of supplies too high and how do I go about finding a cheaper supplier in canada?

8 replies
funbun Posted 23 Mar 2008 , 6:15am
post #2 of 9

Who are your suppliers right now?
How big are your cupcakes vs. grocery store?
Are there any other bakeries in your area who offer cupcakes?

I think you could get $2.00 a cupcake, especially if they are custom with more then just a frosting swirl on top. icon_smile.gif

jazzyjenni Posted 23 Mar 2008 , 4:27pm
post #3 of 9

I have priced everything out at a wholesaler club. There aren't any other bakers within 100miles. The grocery cupcakes are regular size or mini, they are vanilla or chocolate with seasonal colors of the nastiest tasting icing... blah!

TexasSugar Posted 24 Mar 2008 , 12:22am
post #4 of 9

Why shouldn't you charge with they are worth? Would you rather do 100s of cupcakes and be annoyed as you are making them because you are not make any money off them or dozens and enjoy making them because you know you are making money to make them?

You can not compete with grocery store prices, unless you are offering the exact same item? Are you planning on offering 2 or 3 flavors with a swirl of icing on top of them? Or are you planning of having a list of flavors they can choose from? Filling in them? Decorations that go above and beyond a swirl of icing?

Yes, you are going to have people that want grocery store prices, and you know, let them go get that. If they balk at your prices, just remind them they are getting custom made cupcakes (if you bake scratch, you can add that in) that are baked fresh, decorated for them and blah blah blah. Sell them and sell yourself. And if they still want grocery store prices send them on their way!

indydebi Posted 24 Mar 2008 , 12:33am
post #5 of 9

Yeah, Texas!!

I have told people "Walmart is three minutes down the road". If they don't want to pay my price, there are people behind them who will.

Please step aside and get out of their way!

TheButterWench Posted 24 Mar 2008 , 12:26pm
post #6 of 9
Quote:
Originally Posted by jazzyjenni

I live in a small town. About 2500, however we have a large surrounding population (10,000) I want to start a cupcake business but I am concerned about the custom vs. grocery issue. We have two groceries that sell cupcakes for 4$ a half dozen plus taxes. I cannot make my cupcakes for that price but I can get my costs down to about $5-6 per dozen. What would be a reasonable price to mark them up to? I'm just not sure that if I charge what they are worth that people will buy them because of the grocery prices. Also, are my cost of supplies too high and how do I go about finding a cheaper supplier in canada?




You must live near a Publix because in my area they sell for the same price.

funbun Posted 24 Mar 2008 , 5:06pm
post #7 of 9

If you have no other bakers for 100 miles then charge what you need to charge to make money. People buy from grocery store because there is nothing else.
Please don't ask yourself "what would I pay?" Because we usually come up with a grocery price becasue we can bake. I have done cakes that have priced out to thousands of $$$ and the clients don't even blink at the cost.

Some people tell me my prices are high and I tell them "My prices are what they are because my clients love the taste and look of my baked goods and if they wanted an assembly line cake or cupcakes then they know not to come to me. But if they want something full of flavour and character they come to me." icon_biggrin.gif

I think you have found a niche that you can fill. Give it a go and see what your response will be.
icon_biggrin.gif I bet you will have alot of good feedback.

PM me if you want some prices and choices of what I do.
HTH

TexasSugar Posted 24 Mar 2008 , 5:21pm
post #8 of 9

Another thought is that you can start a little higher and see if people will go for it, and if they don't you can always go down a little. It is harder to start on the lower end then work the piece up later.

But you have to set the price you are willing to work for and not let them set what they are going to pay.

sassycleo Posted 24 Mar 2008 , 5:51pm
post #9 of 9

Charge what YOU want to charge - don't base your pricing on the local grocery store. 9/10 times those are mass produced they also have other inventory that helps them offset their pricing.

You've got a business to run - don't kill yourself doing a million cupcakes for minimal price. Grocery stores can't offer any flavor outside of the vanilla and chocolate. Yes they decorate them differently depending on the holiday, but seriously have you taken a look at those decorations? They don't had sparkles, shimmer, dragee's to them. They don't make them look high class nor do they offer any that are decorated with fondant or flowers.

Becareful of doing character cupcakes unless you have purchased a license , they are copyrighted and you don't want to get busted for that.

I personally say charge min of $3/cupcake sounds like a lot, however take the following into factor: ingredients, style, icing, decoration, cupcake liners and your $/hr for your work. Cupcakes are hard work, much more time consuming for some designs vs decorating a cake. Also keep in mind what your paying for your ingredients, my cost of eggs has gone up about $2 just in the last month or so and let's not even talk about gas prices - these are all factors as you have to go out and get your supplies.

Do not sell yourself short!! If you start out that way, it's going to take a lot of work to get you were you need to be and justification to customers who used to purchase your lower priced products.

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