I'm Having A Real Pricing Dilemma...help?!

Decorating By MrsMom Updated 26 Apr 2008 , 3:00am by HerBoudoir

MrsMom Posted 25 Apr 2008 , 7:20pm
post #1 of 24

OK, so I've only sold 1 cake before. This week I got an email from my SIL saying one of her friends saw pictures of some of the cakes I did for my SIL for her DD's bdays and that she gave her my email address. The friend emailed and is interested in a cake for her DD's 3rd bday and one for a baby shower. According to my SIL she also has her mom's surprise bday party coming up in June but she didn't want to overload me with cakes at once.

Now my dilemma. What do I charge? The one cake I sold, I got $60 for 50 cupcakes. I had originally quoted a lower price for less cake but once the lady found out "how cheap" I was she added more cake on and spit out the $60 price which I agreed to.

Anyway.....the lady that is inquiring now wants a cake for 40-50 people and when I asked her if she had a budget in mind she said $40. Now, I know I am just starting to sell, but that seems a bit low. On the other hand it would be nice to get the experience...it sounds like I could get quite a bit of business from her...2-3 cakes at least.

Sorry to make this so long, but would you do it for $40 if you were just starting? Do you start cheap to get people interested and slowly raise prices or ask for a bit more to start? How much?

I called the bakery she usually gets her cakes from (my SIL gave me the inside info where she gets them...SIL said her friend said they were cheap there but she didn't like the taste) and an 11x13 (about 35 servings) is $40.

23 replies
tiggy2 Posted 25 Apr 2008 , 7:37pm
post #2 of 24

That's a $1.00 or less per serving! I'd show her the twinkie aisle at walmart.

MrsMom Posted 25 Apr 2008 , 7:45pm
post #3 of 24

Yeah, I know. icon_sad.gif I was thinking $1.25-1.50 would be fair since I haven't done a *ton* of cakes yet, but then she came back with that price and I'm a little bummed about it. I don't know if she was low-balling so there would be some negotiating room or what....

crisc23 Posted 25 Apr 2008 , 7:54pm
post #4 of 24

I understand your concern about getting experience and just starting out, I remember being at that same spot. But you can't let anyone expect a specialty cake for less than she would pay at the bakery where she doesn't like the taste.

I learned the hard way, when I first started I was selling for very cheap prices and after doing that, it's extremely difficult to raise your prices since the customers are used to paying the low prices.

I have also learned that my prices dictate the type of customers I get. When I got confident and my prices went up, my clientel also changed and I got bigger, more profitable orders. I guess that crowd figures they get what they pay for and grocery store prices weren't tempting them.

Another thing to think about is the fact that this woman is a friend of your sister. Has your sister told her she would get a "friend" discount or do you feel like you would give her a discount for being your sister's friend? If so, then quote her the real price and then tell her but since she is your sisters friend you will be happy to try and work within her budget this time.

The price all depends on the detalis of the cake.... if it is stacked or has a lot of detail it will cost more. Obviously a sheet cake would be cheaper than a stacked cake, etc. Once you get the details of what she has in mind, you can come up with a design and quote her a price.

Remember, just because you wouldnt pay a lot for a cake doesn't mean others wont. You have to cover the cost of the ingredients and also the time you spend decorating.

Good luck!

MrsMom Posted 25 Apr 2008 , 8:06pm
post #5 of 24

I don't think my SIL made her think she'd get a discount because she is my SIL's friend. However, I do think that maybe she made it sound like I would be cheap because I'm just starting. I called SIL to tell her I got the email from S (her friend) since she had given me the heads-up and she said something to the effect of "I told her you were looking to build your portfolio."

Ugh....it's such a sticky subject.

MrsMom Posted 25 Apr 2008 , 8:55pm
post #6 of 24

Oh, and crisc23...I know you are right. I can't give the cakes away. icon_sad.gif

The customer is pretty open to anything, as long as it is snail-themed. I just really want to do something custom and not a plain sheet cake. I want to show her what I can do but get a bit of $ to make it worth it at the same time.

evaruggiero Posted 25 Apr 2008 , 9:19pm
post #7 of 24

I just started taking cake orders and i honestly tell you set your price right from the start. What i've been doing is charging $1.50 for buttercream and $2.00 for fondant, bows or fondat toppers priced separetly. At first I felt weird about pricing but as everyone else says here on CC you have to chardge for you time, this is art!!!

springlakecake Posted 25 Apr 2008 , 9:21pm
post #8 of 24

If you WANT to do it, then do it. But I would tell her that you are doing it for a deep discount for the experience. The next cakes are going to cost more.

poshcakedesigns Posted 25 Apr 2008 , 9:25pm
post #9 of 24

Don't sell yourself short. You are already at the 'advantage' point because she doesn't like the way the other bakery makes their cakes.

I have learned just because someone says their budget is one amount doesn't mean they aren't willing to pay more if it's something they really want.

I would draw up some ideas and present them to her. Show her several design options to choose from and tell her the price for each one (you can vary the prices). If she see's one she likes she will more than likely come up with the extra cash to get it.

I agree with the others it's hard to raise your price on a customer after they already got one deal. They will expect it each and every time.

indydebi Posted 25 Apr 2008 , 9:32pm
post #10 of 24
Quote:
Originally Posted by tiggy2

That's a $1.00 or less per serving! I'd show her the twinkie aisle at walmart.




What I call a "Twinkie Budget Bride" mentality!

nothing wrong with saying, "Oh gosh, for that kind of money, your best bet would be walmart. Thanks for checking with me!"

abw2005 Posted 25 Apr 2008 , 9:36pm
post #11 of 24

Whether you are just starting out or not, you are still a decorator and should charge accordingly. I am 'just starting out' as well and doing my first wedding cake for 300 people at $800 - and that's for MY friend! I personally wouldn't go much less than $2/serving, your time and effort is worth more than $40 for 50 servings!!!

fiddlesticks Posted 25 Apr 2008 , 9:37pm
post #12 of 24

If I have someone ask about a cake style and they want some ideas, I email them different cakes and add the price next to it, that way they know what they can get for what amount of money! and they also have some choices of design that they probably have not thought about ! even if you dont have many to send out yet you can find some pic,s anywhere and say they are just samples and wont look just like that! You will make it your own design but its good for ideas ! and prices to ! Works for me anyway !

gr8yf Posted 25 Apr 2008 , 9:49pm
post #13 of 24

Less then $1. is not a business it's a charity.

FromScratch Posted 25 Apr 2008 , 9:55pm
post #14 of 24
Quote:
Originally Posted by abw2005

Whether you are just starting out or not, you are still a decorator and should charge accordingly. I am 'just starting out' as well and doing my first wedding cake for 300 people at $800 - and that's for MY friend! I personally wouldn't go much less than $2/serving, your time and effort is worth more than $40 for 50 servings!!!




thumbs_up.gif Ditto 100%

Doing cakes for less than $2/serving you won't make enought money to make it worth all the time and effort. It takes time to shop for ingredients, bake, level, fill, decorate, clean up.. you get the picture. It wuld cost me $40 to make a cake for 50 ppl in ingredients alone.

pjmw Posted 25 Apr 2008 , 9:58pm
post #15 of 24

Supply prices are going up across the board. Make sure you are making what you need to make. Even new decorators need to be paid for their time and skill. It's a weakness of mine too to want to undercharge, but have learned that I just have to be compensated for my ability and time. If that is not in their budget, then they will have to eat overprocessed icky icing from a chain bakery.

SugarBakerz Posted 25 Apr 2008 , 10:10pm
post #16 of 24

mrsmom, I agree with indydebi, tell her that she can get the sheet for $40 at the other place or walmart for that matter. You need to figure your costs and x that by 3.... or you could say I will be charging xx for this cake in May, but right now I will give you 10 or 20% off or whatever... I have done the show them ideas with prices... say I did the cake 3 different ways, small medium and large and put a price on all 3.... they choose what they want, basic sheet, tiered or something over the top... always go for over the top... if they see it they will want it and not care about the price... say she chooses over the top, then say I will be willing to knock 10% off of this order for you.... just a thought, HTH.

valerie01 Posted 25 Apr 2008 , 10:35pm
post #17 of 24

I agree that you should decide what you want to be paid based on materials, time, and talent and set your prices accordingly from the very beginning. I didn't, and now I field questions about why my prices have risen. It's a headache and business buster sometimes! If you do decide to make cakes for cheaper, I would make it very clear to customers that they are getting a discount.

costumeczar Posted 25 Apr 2008 , 11:42pm
post #18 of 24
Quote:
Quote:

Yeah, I know. I was thinking $1.25-1.50 would be fair since I haven't done a *ton* of cakes yet, but then she came back with that price and I'm a little bummed about it. I don't know if she was low-balling so there would be some negotiating room or what....




What negotiating room? Does she go to the bakery she usually gets her sheet cakes from and negotiate? I don't think so...Her comment about you trying to build your portfolio tells me that she could think that she's doing you a favor for ordering a cake from you, but don't let her push you around. If you want to start with a low price because you're new at this don't go lower than $2 a serving. And remember that it's your LOW price, which you will certainly raise very soon icon_twisted.gif ! Her usual bakery will churn out a sheet cake for the same amount she wanted to pay you, but it isn't the same work. With that mentality I could go to Saks Fifth Avenue and try to argue that I should get that Prada bag for the same amount as the one at Walmart, because they're both purses, right?

MrsMom Posted 25 Apr 2008 , 11:55pm
post #19 of 24

If that is not in their budget, then they will have to eat overprocessed icky icing from a chain bakery.

The sad thing is that the bakery I called isn't a chain bakery...it's a small mom and pop shop. icon_sad.gif However, their prices are still higher than she's asking I think. They want $40 for an 11x15, which according to my charts only serves 35.

I haven't done many cakes, so I don't really have much for sample pics I could show her. She saw the cakes I did for my SIL, though.

Her comment about you trying to build your portfolio tells me that she could think that she's doing you a favor for ordering a cake from you, but don't let her push you around.

Actually, it was my SIL who said that to *her* (the potential customer)! icon_mad.gif

I wish I could, but I think as a "non-professional" there's no way I could get $2 per slice. We live in a very rural and rather economically challenged area.

leah_s Posted 26 Apr 2008 , 12:15am
post #20 of 24

Honestly, at less than $2 per serving, you're hurting every other cake maker out here. One person tells another who tells another and our whole profession gets undervalued. I'm really not trying to be harsh, but please, think of those who have gone before you, dragging this profession up from nothing. I won't even get into the "are you licensed" question, as that has been debated on here soooo much recently.

indydebi Posted 26 Apr 2008 , 12:37am
post #21 of 24
Quote:
Originally Posted by MrsMom

We live in a very rural and rather economically challenged area.




(big sigh!) Attention America! The entire country is "economically challenged"!!! I don't know of any town, city or state that is sending out a big broadcast saying, "Everything's ok over here!"

The economy may be bad, but people are still getting married and they're still having birthdays. They may cut down on the venue or they may have a buffet instead of a plated dinner, but they're still going to have a wedding cake. Little Johnnie may not have pony rides and a bouncy castle at his birthday, but he's still going to have a birthday cake.

Please, people, if you use the "they ain't got no money!" excuse, then you'll lean on that and use that as a reason not to excel. Don't fall for it.

As my hero, KansasLaura, said: "Yeah, I heard there was a recession. I just refused to participate."

Me, too. thumbs_up.gif

KathysCC Posted 26 Apr 2008 , 1:47am
post #22 of 24

Be prepared though. I changed my prices and lost a lot of customers who were used to getting a cake from me for the price they can get one at Walmart. Don't get your feelings hurt if you tell her the price and she goes elsewhere.

I agree with merissa...if you really want to do these cakes and don't mind not getting paid much then just tell her that you are doing it at a deep discount. Sometimes it's just fun to make a cake. icon_biggrin.gif

FromScratch Posted 26 Apr 2008 , 2:01am
post #23 of 24

Can you legally bake from your home where you are? I would seriously look into that BEFORE you start baking cakes for others. If it's not legal you can get burned. And not being legal and licensed and insured, you put you and your family at risk should someone get sick from your cakes. They can and will sue you.

Where are you? It doesn't say in your info.. we can let you know if it's legal where you live. icon_smile.gif

HerBoudoir Posted 26 Apr 2008 , 3:00am
post #24 of 24

When I want to try out methods and practice things, I just go ahead and make the cake I feel like making. Then it gets shared out to friends and to work, and I've enjoyed myself making it.

I can be very very generous with friends, making them goodies and such, when it fits into my schedule and it's what I want to make.

But honestly - I would find it insulting for someone to expect me to make a decorated cake that large for that little amount of money.

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