Making A Price List- Help!

Decorating By SueW Updated 9 May 2008 , 3:46pm by mcelromi1

SueW Posted 28 Apr 2008 , 4:24am
post #1 of 37

OK, so I am pretty new to this cake/cookie decorating and so far pretty much do orders for friends. Lately they have passed my name on and now it is for "friends of friends". I am starting to have trouble quoting prices because..... well I have no idea where to start.

I guess my question it how on Earth do I come up with a basic price list??? All I really have done so far a cookies (NFSC with royal) and basic cakes as well as cupcake cakes. The largest cake I have made was 12inch round and I think I only charged 30$. I keep saying "how about 30 $.. 40$ ... ) whatever I think if fair in my head but this can't go on much longer.

Can anyone help me figure out how to price things for a beginner decorator ie. cookies , ccc's and up to 12' rounds without being stacked or tiered.

Thanks, sorry this is so long I am so stressed about his but realize now I NEED a list so I don't have to go through this every time I have an order icon_cry.gif

SueW

36 replies
leily Posted 29 Apr 2008 , 2:17am
post #2 of 37

I suggest add up the cost of your ingredients and about how long it will take you to make the cake (include grocery shopping, baking, cleaning, decorating, ALL of it) and then figure out an hourly rate. Add it all together and you have your price for the cake

meldancer Posted 29 Apr 2008 , 2:41am
post #3 of 37

Look into some of the competition in your area. I looked at what bakeries, Walmart and some local cake decorators were charging and tried to make mine competitive to theirs. Also make a list of cost of ingredients for a cake and time it takes to make. Create an hourly wage for timea and see what your total comes up compared to what the competition is. Is it comparable? Are you willing to eat a little get more biz or take the chance that people will still call if yours is a little pricier than the others.

indydebi Posted 29 Apr 2008 , 2:49am
post #4 of 37
Quote:
Originally Posted by SueW

whatever I think if fair in my head but this can't go on much longer.




This phrase tells me you are thinking like a customer and not like a business person.

A price that is "fair" and a price that is "profitable" are two different things. I'm not saying that a profitable price is "unfair" to the customer. I'm saying you have to stop thinking of what's "fair" and start thinking of "here's what I need to pay my expenses and make a profit".

this is not personal. this is business. And if you're not making a profit, then you're not in business, or at least you wont' be for very long.

Using your numbers above and based on the wilton wedding chart (which is what I use to determine pricing), a 12" 2-layer round serves 56. If you're selling that at $30-$40, that's less than $1/serving. WAY less.

Dont' know about you, but that doesn't sound very "fair" to YOU.

you need to find a consistent system to price your items and then stick to it. By the serving, by the number of cake mixes used, by the inch ... whatever .... find what works for you and stick to it.

stephanie214 Posted 29 Apr 2008 , 3:53pm
post #5 of 37

Please read the following on a discussion from another thread:

Quote:
Originally Posted by amie202

This is the last I will say in this forum. It does apply to you. It does not matter that you are not in direct competition. Any discussion of price could be interpreted as intent to set a standard price for the industry. All I can do is URGE people not to discuss specific prices. I have been an antitrust attorney for 10 years an I promise you the discussions of price on cc have gotten way out of control and are primed for the justice department to come down hard. especially b/c it is based on the internet. I am really just trying to protect y'all and this forum b/c I love it so much. If you would like to learn more please pm me as I will not check into this forum again b/c I don't want to stir up trouble and I don't want to have any more contact with this discussion of price.

http://library.findlaw.com/1999/Jan/1/241454.html




Thanks thumbs_up.gif

FromScratch Posted 29 Apr 2008 , 4:23pm
post #6 of 37

So we can't talk about what we charge? That's pretty crappy.. so we just let people charge next to nothing and undercut us and not say anything? We can't MAKE people charge more by suggesting they do to make sure they are making a good profit. I read about 2 paragraphs of that HUGE website summary of the laws.. Call me ADD because it was boring and helpd no interest to me I couldn't read it. I am sure there is validity to the statement.. I just find it a tad bit insane. We are not saying that everyone must charge a minimum or a maximum.. But I digress..

I'm sorry.. but to sell a 12" cake for $30 is ludicrous. You are making NOTHING and if you keep it up you will burn out FAST. I suggest you call around and see what local places (NOT Wal*Mart and grocery stores as you are not competing with them) and find out what they are charging for truely custom cakes and cookies.. not just a let me write happy birthday Joe on that for you. Find a servings chart you like and stick with it and charge per serving.. not per cake. This way all you will have to do is multiply your per serving rate by the number of servings and viola.. your basic cake price. Anything extra can be tacked on as you see fit. I hate to see bakers working their tails off and not getting anything for it.. and that's what you are doing.

meldancer Posted 29 Apr 2008 , 6:31pm
post #7 of 37

I can understand that we don't want to compare our cakes to those that Walmart or grocery stores put out. However I live in a small town where they can't justify spending more on a cake than what they could spend at those places, despite quality. But it wouldn't hurt to at least include them in your list of "competitors" so you know your price range and feel good about what you charge.

TexasSugar Posted 29 Apr 2008 , 6:59pm
post #8 of 37
Quote:
Originally Posted by meldancer

I can understand that we don't want to compare our cakes to those that Walmart or grocery stores put out. However I live in a small town where they can't justify spending more on a cake than what they could spend at those places, despite quality. But it wouldn't hurt to at least include them in your list of "competitors" so you know your price range and feel good about what you charge.




You can't complete with Walmart prices because they get everything in bulk and there for don't have the cost of ingredients the average baker does. Plus your cakes are not shipped in frozen and iced, and they are only allowed to spend a short period of time decorating them. Most of ours are baked fresh and custom decoratred, which translates in to hours out of our lives to bake, cool, ice, and dcorate. That is time away from your family and friends!

I understand living in a small town and not being able to charge $5, $6, or $10 for a serving, but you shouldn't lose money to make a cake for someone else either. Then you aren't a business you are a charity.

I'd rather not do a cake than do a awesome cake that took me hours/days to do, and only charge a walmart sheet cake price.

FromScratch Posted 29 Apr 2008 , 7:07pm
post #9 of 37

DITTO!!! TexasSugar! I completely agree. I live in a less than affluent part of my state.. we aren't piss poor, but not rollin' in the dough either. I still make cakes and I do charge $4+/serving. I'd much rather make one cake for $400 than 20 cakes for $20 each. I can't make a cake for $30 and make a profit. It cost me $30 in ingredients to make a cake the other day.. an 8" cake.

meldancer Posted 29 Apr 2008 , 7:57pm
post #10 of 37

Don't get me wrong, I do agree with TexasSugar also. I'm just adding another perspective. My community is rural, so bakeries are farther away and what everyone is used to is the grocery store stuff. I base my price on my ingredients and time, but I also keep in mind what everyone is used to paying at those other places. I do charge more than them, but I can't do the $4 or higher a slice price because I would then never get an order. I would rather do 20 cakes at $20 each and know that I made their day with a really good tasting cake than never do them. I make cakes more as a hobby and a stress reliever from 3 busy toddlers than as a biz. Again, this was just another side of it.

leah_s Posted 29 Apr 2008 , 8:25pm
post #11 of 37

Are you licensed? Can you even sell cakes/cookies legally?

FromScratch Posted 29 Apr 2008 , 8:37pm
post #12 of 37

I'd MUCH rather be making money and making people happy than just making ends meet to make people happy. If you aren't doing this to make money then it's a hobby and should probably stay that way. Not being rude at all so please don't take it that way.. it's just that no business will thrive with that mindset. I am thinking ahead for the days when I will have more overhead. It's easier to go from $4 a slice up to $6 a slice than to go to $6 a slice from $1 a slice (or less).

I would wonder the same thing that Leah asked too. Make sure that you are able to bake from your home in your state and get yourself licensed if you aren't already. Then you can get liability insurance and your home and family can be protected. It's not expensive.. usually under $500 for a year. Well worth the piece of mind. icon_smile.gif

meldancer Posted 29 Apr 2008 , 8:42pm
post #13 of 37

Wow, just offering my opinion once again and getting cornered. Nevermind. Good luck SueW with your price list.

CakeDiva73 Posted 29 Apr 2008 , 8:57pm
post #14 of 37
Quote:
Originally Posted by stephanie214

Please read the following on a discussion from another thread:

Quote:
Originally Posted by amie202

This is the last I will say in this forum. It does apply to you. It does not matter that you are not in direct competition. Any discussion of price could be interpreted as intent to set a standard price for the industry. All I can do is URGE people not to discuss specific prices. I have been an antitrust attorney for 10 years an I promise you the discussions of price on cc have gotten way out of control and are primed for the justice department to come down hard. especially b/c it is based on the internet. I am really just trying to protect y'all and this forum b/c I love it so much. If you would like to learn more please pm me as I will not check into this forum again b/c I don't want to stir up trouble and I don't want to have any more contact with this discussion of price.

http://library.findlaw.com/1999/Jan/1/241454.html



Thanks thumbs_up.gif




I am lost, lost, lost! Can anyone read this legallese and translate it into plain English so I understand why we are not supposed to discuss price? I'm serious.....talk to me like I'm a 5 year-old icon_smile.gif because I do not understand any of this. thanks guys icon_smile.gif

Mike1394 Posted 29 Apr 2008 , 9:01pm
post #15 of 37

amie202 wrote:
This is the last I will say in this forum. It does apply to you. It does not matter that you are not in direct competition. Any discussion of price could be interpreted as intent to set a standard price for the industry. All I can do is URGE people not to discuss specific prices. I have been an antitrust attorney for 10 years an I promise you the discussions of price on cc have gotten way out of control and are primed for the justice department to come down hard. especially b/c it is based on the internet. I am really just trying to protect y'all and this forum b/c I love it so much. If you would like to learn more please pm me as I will not check into this forum again b/c I don't want to stir up trouble and I don't want to have any more contact with this discussion of price.

http://library.findlaw.com/1999/Jan/1/241454.html

Yeah the Justice dept. is coming to ask me to stop violating antitrust laws. The great cake conspiracy of '08 some fancy price fixing going on nation wide over cake, cookies, and petit fours. Toss in canapes, and we can control the nations eating habits. LOLOLOL Sorry I couldn't help myself.

It depends on what you want to do. Do you want to control your market? What level do you want to be at in that market? Find out what competitors on your talent level are charging.

Mike

julzs71 Posted 29 Apr 2008 , 9:17pm
post #16 of 37

here is one thing I got out of this antitrust..Antitrust's capital crime is horizontal price fixing. Agreements among competitors with respect to prices for products or services are illegal per se.
You have to agree to price changes. Discussing your price is not price fixing. I would think that a lot of us banning together and then go to the same exact price.
I keep my law degree in my back pocket along with my doctor, teacher, and psychology degree. Meaning...I have none of the above. Who the heck is going to go after the cake lady? They haven't gone after the gas suppliers yet.

CakeDiva73 Posted 29 Apr 2008 , 9:43pm
post #17 of 37

Ok, I think I get it....they're saying if all the cake decorators in your area get together and agree to charge no less then $ ______ , then it's illegal because you are forcing the market? Rather then everyone charging their own prices and letting cost and demand and fair competition dictate pricing? Is it in the family of when a company controls the market, eliminating their competition and can therefore charge whatever he wants for his widget/service?

You're right about the gas thing - they are all within pennies of each other around here.

As the church lady would say, "How conveeeeeeeenient!" icon_smile.gif

(Yes, I am a total SNL fanatic)

FromScratch Posted 29 Apr 2008 , 10:20pm
post #18 of 37

No one is cornering anyone. Just giving my side and looking out for others. I am in no way chastising you for not being legal and having insurance.. just stating the benefits. And some people have no idea that you can't just start baking cakes from your kitchen without the proper licensing so I always try to state that and teh risks involved. icon_smile.gif

I am with Julz.. discussing pricing in general is not against the law. If we were banding together and setting a minimum and maximum price for cakes that would be another story.

edited to add the word with.. icon_redface.gif

amytracy1981 Posted 29 Apr 2008 , 11:55pm
post #19 of 37

Sue,
I know what you mean about just asking for $30 or $40 dollars for a cake. I don't sell my cakes, they are just for family members but I do ask for the cost of ingredients (I am not made of money and I have a big family). But for some reason I can never tell them anymore than $40, and sometimes my ingredients cost more than that. Once I quoted my MIL $40 for a cake, it cost me $50 to make and she only gave me $30! But I am getting frustrated with doing this, I feel like I am paying them to let me make their cakes! So I decided that for now on when I am asked to do a cake I am going to tell them that they can give me the amount that they want to spend on the cake (BEFOREHAND). And I will make a cake that costs that much and no more!
That way I will not feel like I am being taken advantage of and they get what they pay for.
I will still get to make the kind of cakes that I want to make for my 3 kids and DH.

Zombiecakes Posted 3 May 2008 , 5:32pm
post #20 of 37

I'm still at the point where making and decorating is so much fun I'm thrilled to get the chance to make a cake that doesn't go to my hips. BUT I can see how resentment would form if I had a huge family not even willing to pay for the ingredients, let alone a little something for my time.

I feel for those of you who live in communties where the only other options for cakes are Walmart and grocery stores. There literally may not be ANY market for your custom specialty cakes and if you want to get any orders at all you will make little if any money beyond your expenses. I agree that many people underprice themselves, but there's also knowing what your market will bear. Then it's a choice between getting to bake for others or making waaaay too many cakes for your immediate household to fulfill your baking jones.

I would never pay over $50 for a cake but I'm lucky enough to live in an area where people think nothing of spending 5X that on a child's birthday cake, or $4 per cupcake.

indydebi Posted 3 May 2008 , 10:20pm
post #21 of 37
Quote:
Originally Posted by Zombiecakes

I feel for those of you who live in communties where the only other options for cakes are Walmart and grocery stores. There literally may not be ANY market for your custom specialty cakes ...




See, I think you're looking at it all wrong this way.

I see people saying, "People won't pay $XX for a cake because they only buy Walmart cakes." My question is, are they only buying walmart cakes because that's all there is??? Do they have any other choice, and if they DID have choice, would they pay a quality price for quality product.

I say that if walmart is their only choice, then you have a WIDE OPEN market, not "no market" for what you do. I say there are people out there who WANT what they see on the food channel and walmart can't provide that.

Market yourself properly and educate the public on what's available.

A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties. - Harry
Truman

The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed. - Henry Ford

There's no scarcity of opportunity to make a living at what you love. There is only a scarcity of resolve to make it happen.
â Wayne Dyer

Salesmanship is limitless. Our very living is selling. We are all salespeople. - James Cash Penney

FromScratch Posted 3 May 2008 , 11:19pm
post #22 of 37

True dat Debi.. you are only as good as your marketing. I see an area without custom cake decorators as a gold mine waiting to be tapped.

DoniB Posted 3 May 2008 , 11:59pm
post #23 of 37
Quote:
Originally Posted by jkalman

True dat Debi.. you are only as good as your marketing. I see an area without custom cake decorators as a gold mine waiting to be tapped.




no kidding! The area my parents live in is becoming rather high-priced real-estate, but there's not a single real bakery (with custom cakes, not just sheet cakes with pre-made toppers/accessories) within about an hour's driving distance in any direction, that I know of. All those wealthy folks, all that money and all the parties (red hat, garden parties, golf teas lol, country club get-togethers... endless possibilities!)... and no one taking advantage of it, that I've been able to find out. I"m sure there are some folks around who do it on the sly, and possibly some who are legal but they don't advertise very much. The only places that do cakes are Bi-Lo and Food Lion. I think that says it all. icon_razz.gif

lutie Posted 4 May 2008 , 1:03am
post #24 of 37

It is my opinion that some of you are acting like Chicken Little... the legal system is not working for us; it has turned us into pawns to make themselves a huge living, where they do not have to bake cakes for a living! I would not worry myself about the price-fixing allegation... this is a forum of cake bakers, not security investors.

Some of us are trying to get a feel for what our services are worth... each field of expertise has those who give "base pricing" (i.e., what the insurance company or Medicare will cover versus the pricing of the physician on your bill for your latest procedure; the advertisements of attorneys who will "help" you through bankruptcy and divorce for only $299; what the housing market is in California versus West Virginia, etc.).

Do not let others scare you regarding what we, as friends and colleagues, are discussing. We are not a cartel... we are not conspiring to set artificially high prices... in fact, I have more concern that Wal-Mart is price fixing, in order to put the "little baker" out of business. (Remember when they advertised they would only sell "American-made" products? Since when did China become part of the USA?) How many of you live in towns where they have blighted an area after keeping their original building vacant and going elsewhere in town? They do not care and are "above regulation". How many "Mom & Pop" businesses have dissolved after they have moved into town? I refuse to let them do that to me, and will go out of my way to support my neighbors and friends who own small businesses.


I saw this on a legal site: "Bill Gates, of golf equipment maker Ping, says, 'Not every consumer is a bargain shopper. Some consumers are looking for quality, innovation, personalization and customer service when they shop.'" That is what we have to offer... if you are afraid of the size of Wal-Mart's, then you will always be complaining. If you ignore those who want you to be the same price as the Wal-Mart's charge, you will always have more business than you can handle. After all, who wants to buy their wedding cake at the same store that sells hemorrhoid cream, car batteries, and pet food two aisles over from where their cake is being "made"? That is just plain nasty.

We are here to help each other; not to determine what everyone charges for a slice of cake. A slice of cake in Oregon is not the same as one in Tennessee... different tastes; different regions. I heard on Food Network today on their wedding cake program that once you win a contest, you can charge $10 to $15 a slice... gee, will they think that we are all a conspiracy? ... will they go after Food Network first or me? I am not losing any sleep over it. Bring on more discussions! Woohoo!

Zombiecakes Posted 4 May 2008 , 4:11pm
post #25 of 37
Quote:
Originally Posted by indydebi

Quote:
Originally Posted by Zombiecakes

I feel for those of you who live in communties where the only other options for cakes are Walmart and grocery stores. There literally may not be ANY market for your custom specialty cakes ...



See, I think you're looking at it all wrong this way.

I see people saying, "People won't pay $XX for a cake because they only buy Walmart cakes." My question is, are they only buying walmart cakes because that's all there is??? Do they have any other choice, and if they DID have choice, would they pay a quality price for quality product.




I get what you're saying and in some areas that is certainly true. People with money in their pockets and no where to spend it.

I'm looking at this more from a perspective of what people can afford, not what they may desire. If a family has $100 total to spend on Billy's birthday party, they aren't spending $90 of it on a cake, no matter how delicious and gorgeous it may be. That's not being cheap, it's being smart. Yes, that's not the client a custom baker is looking for, but in some towns that describes everyone.

There is a Bentley dealership in my town (because some people here can spend half a million on a car), not out in the middle of a wheat farming village. That's not pessimism, it's smart business.

CakeDiva73 Posted 4 May 2008 , 4:16pm
post #26 of 37

All good points....but ya know what frosts my hide? People who act like they can't spare the money for the 3 tiered fondant cake, and then I (lacking backbone icon_sad.gif ) reduce my price and then am so sorry when I find out they are giving $20 gift bags and renting a hall for $500.

icon_mad.gif

Zombiecakes Posted 4 May 2008 , 8:00pm
post #27 of 37

Absolutely! That's the bridal magazines telling them to haggle for the cake. No one is trying to talk down the price of the gown, but somehow cake (flowers and catering too) are open for negotiation.

One minute they're trying to look poor to the vendors, but then trying to look as rich as possible to the guests. sigh.

indydebi Posted 5 May 2008 , 1:52am
post #28 of 37
Quote:
Originally Posted by CakeDiva73

All good points....but ya know what frosts my hide? People who act like they can't spare the money for the 3 tiered fondant cake, and then I (lacking backbone icon_sad.gif ) reduce my price and then am so sorry when I find out they are giving $20 gift bags and renting a hall for $500.

icon_mad.gif




oh yeah. had a venue call me. Venue is VERY expensive. They had a couple who was "on a budget" (big sigh!) and wanted to know if they booked now, could they hold my current pricing. Yes they can, so they made an appt for a sampling right then and there. Venue guy reminds me they are a nice couple but tight on money. No problem.

They come for the sampling and I'm expecting a 75-100 person wedding for these poor kids who are "on a budget". So when I get to the headcount question and they tell me 250 people ......! icon_surprised.gif Well, I pull out my philsophy of "Don't play the poverty card with me when you're planning a party for 250 people!!!!" My initial inclination to work with them on pricing went right out the window!

He then asked if I gave a discount if he paid the whole bill (which btw came to over $4500) now? I said no. He said the venue did because venue guy could have access and use of the cash now. I said, "Well he only has to pay the rent and then he's done. I, on the other hand, have to pay the rent and then months from now, when it's time for your wedding, have to have the money to buy your food supplies."

Plus I'm locking in current pricing for them and that's going up 20% in just a few weeks, so I've pretty much just given them a 20% discount anyway.

On a budget .... with 250 guests. Kiss my -----! icon_mad.gif

trumpetmidget Posted 5 May 2008 , 8:54pm
post #29 of 37

Okay, I don't know why, but I just have to add on to this crazy post! icon_smile.gif I, too, am constantly wondering about my prices. I am getting to the point that I need to charge my family - which I have said that if it is for a party, the cake is my gift. Well, no more. The time can be my gift, but I am going into the poor house spending 50-100 dollars on ingredients and supplies. I don't see how we can get in trouble talking about prices. I am constantly wondering what prices are. I walked into a local bakery trying to get an idea of what the prices in the area are and they were comparable to walmart. I did not get that. Then, I saw their cakes and understand a little (nothing special). How is giving prices going to get someone in trouble? I am not saying you have to use my prices and me yours. I'm just quoting you a price. So, why don't we have a thread that is just for pricing because the question comes up alllllll the time. And, no one truly answers the question. Why? I guess because everyone's prices are different depending on their area of living. Did you know Duff's minimum price for a cake is $500? And here I am, not doing a cake for less than $30. I charge $75 for a 12x18 sheet cake, $50 for an 11x15 and $45 for 9x13. Other than that, $3 a slice with extra for fondant, flowers, figures, etc. Carved cakes are different, also. I guess I am in trouble now for giving away my secrets. I think that I am terribly low. Someday, I shall, too, charge $500 minimum. I do not, ever, ever, ever, back down on my prices. I say a price, that is it. I often will give discounts because I am friends with someone or I am doing something new (I have only been in business for 6 months). But, once I say a price, that's it. If they can't afford it, I apologize, tell them Giant can make them a cake for such and such a price, but it will be generic and send them on their way. I am getting more and more business, not less and less.
I could say more, but I know this has been a very long post already. Continue this crazy post, it's been fun. icon_smile.gif

chocomama Posted 6 May 2008 , 1:28am
post #30 of 37
Quote:
Originally Posted by indydebi

Quote:
Originally Posted by SueW

whatever I think if fair in my head but this can't go on much longer.



Using your numbers above and based on the wilton wedding chart (which is what I use to determine pricing), a 12" 2-layer round serves 56. If you're selling that at $30-$40, that's less than $1/serving. WAY less.




I try to use the Wilton chart when pricing for weddings, but when pricing for birthday cakes and such I can't. I just made a 2 tiered cake for a 2 year old's birthday last weekend and was also a guest. Each tier was 2 layers and I used 9in and 6 in pans. That cake should have fed A LOT of people, but even with just 30 guests, most of them kids, the cake was gone before I knew it. Most people don't cut itty bitty slices, kwim? In that case, what do you do?

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