Hate Undercharging :-)

Business By Kitagrl Updated 15 Sep 2008 , 2:15am by sugarspice

Kitagrl Posted 23 Aug 2008 , 5:57pm
post #1 of 39

I'm really doing better pricing my things, but sometimes I undercharge if I mis-judge amount of work or etc.

Today I undercharged something I knew what the price should have been (did the math wrong I guess, last minute) and then I also was thinking the delivery was closer than it is, so undercharged delivery as well! GRRR! I'm not losing money on it, but its just annoying. Haha.

38 replies
julitre1 Posted 23 Aug 2008 , 6:22pm
post #2 of 39

I think I undercharge as well. I feel like I need to compete with Wal-Mart on just a regular cake and right now I don't charge a delivery fee. What do you charge for delivery, if you don't mind me asking?

gr8cakemaker Posted 23 Aug 2008 , 6:29pm
post #3 of 39

Yes, I think I undercharge too. I underestimate the amount of work that goes into my cakes. Because I just started I feel like I have to lower my prices to bait people and get them to try out my product to see how much better it tastes and looks than your regular wal-mart cakes. I dont charge a delivery fee either and would love to know how much you charge. Has anyone used cake boss? I have been thinking of purchasing the software to cut out the guess-timating of cake prices.

calivettie Posted 23 Aug 2008 , 6:30pm
post #4 of 39

Delivery fee?!? lol. I don't charge that! I'm with you julitre, I feel I have to compete with our local superstore or else I wouldn't get business. I also just tell myself that this is just until I get better than the prices go up!

kcjc Posted 23 Aug 2008 , 6:30pm
post #5 of 39

So glad you just put this up. Here is a cake I just got back form delivering 5-6 mi.the cake was chocolate w/red rasberry &blackberry glaze,chocolate buttercreame 2 batches,ea batch i make w 4 sticks butter ,1-1 1/2 c whipping cream,1-2c conf sugar,pur van or flav.This choc bc I added 6 oz giedeli(sp)chips to 1c heavy whipping cream both batches,the dogs were made from fondant to match pics the buyer had,the tree & baby I made from nfsc rec. I plan on freezing the rest of the nfsc batch so it's not wasted to be cost effective for this cake. I charged $40. wasn't planning on del. I felt like i undercharged for the cake because I'm just not up to par yet and these are practice cakes. Some come out better than others.What do you think I should have charged?
LL

calivettie Posted 23 Aug 2008 , 6:34pm
post #6 of 39

WOW kcjc!
That does not look like a practice cake- it is beautiful and $40 was definitely too little. For a 3 tier cake I think at the least $100 and that is with your "beginner" discount included.

gr8cakemaker Posted 23 Aug 2008 , 6:50pm
post #7 of 39

kcjc, I definitely think you should have charged more for this cake. I am a beginner at decorating cakes and I made a similar in size cake to the one you just made and charged 65$ for it. The lady was blown away by how little I charged her because the other bakeries she went to were going to charge her 200$ for the same cake. I do feel strong competition with the local supermarkets, but I have done some research and for the cake I made and charged 65$ for, the cheapest price was at wal-mart and they were going to charge 125$ for that cake. I feel like I gave her a good deal and she was very pleased with the outcome. I am a beginner and plan on heightening my prices as I become better. Here is the cake I charged 65$ for and there was no delivery fee. also here is my website with all my other cakes http://customcakecreations.org
LL

kcjc Posted 23 Aug 2008 , 7:01pm
post #8 of 39

Thanks Calevetti for your kind words.It was supposed to be a topsy turvy cake as well but the second layer was onthe disk and either that prevented it from sinking into the carved out spot or I don't know maybe one of the dowels meraculously raied itself. Either way the client really liked it..but thats what i mean about learning. It wasn't as it should have been. BTW the saying was "Just hanging around waiting for you..All the pets and the neighbors too!" (There hobby is hanging from trees.Don't ask..I don't know to much about it)i was just trying to think of something catchy and my son inlaw came up with that. 10,8 & 6x3" pans.

kcjc Posted 23 Aug 2008 , 7:10pm
post #9 of 39

gr8cakemaker, Oh my goodness look at you. your site was great.As I'm typing I'm asking did she say she was a beginner? Great cakes!Thanks for the confidence. Ater these next two cakes that I've already quoted I'm definately going to raise my prices & try to keep better cost. I tried the cke matrix but I had trouble inputting correctly.

kcjc Posted 23 Aug 2008 , 7:13pm
post #10 of 39

I'm also interested in cakeboss but thats more monthly cost..right? I read a little about it before.Guess I should really lok at it.

gr8cakemaker Posted 23 Aug 2008 , 7:17pm
post #11 of 39

kcjc, wow thanks! That was such a confidence booster! yes, I am a beginner and completely self taught. your cake is beautiful. I haven't dared to attempt a topsy turvy cake yet, any advice? You should definitely quote some higher prices. When I first began charging people for my cakes I under priced exponentially and began to realize that I was paying to make these people cakes! Even though I still think Im undercharging I have realized that in order to run a business you have to make a profit. (not that tough of a concept lol). I have never tried the cake matrix though, I think I will give it a try.

gr8cakemaker Posted 23 Aug 2008 , 7:21pm
post #12 of 39
Quote:
Originally Posted by kcjc

I'm also interested in cakeboss but thats more monthly cost..right? I read a little about it before.Guess I should really lok at it.




I believe cake boss is a one time purchase and is 100$, however for cakecentral members its 10% off. You can explore all of its features at cakeboss.com it seems like a very good investment because you are allowed to put in all of your recipes and calculate ingredient costs, tax, and delivery fees and decide on a percentage profit. Am seriously thinking about it.

Dee0412 Posted 23 Aug 2008 , 7:58pm
post #13 of 39

Hi everyone,

I have bookmarked Wilton's servings webpage. I refer to this when quoting because it lists how many cups of batter you'll need for every size cake. Also it tells you how much icing you'll need. From that I'm better able to charge a "good" price. I used to feel that I had to compete with Walmart, Sam's or the grocery store. But you'll soon find out that there's a demand for personalized cakes, something you just can't get from those stores.

I charge delivery now because of these crazy gas prices. I divided up the county. I figured out how much gas it'd take me to drive there and charged accordingly.

These aren't words of wisdom....just experience. Good Luck to you!!! thumbs_up.gif

chutzpah Posted 23 Aug 2008 , 8:07pm
post #14 of 39

OMFG!

All y'all get your heinies on over here, line yourselves up nice and orderly and let me SLAP YOU UP!

Knowing you're undercharging, and then continuing to do so? No delivery charges? Charging 40 greens for a gorgeous cake that has cost you more than $40 to make the darned thing? Thinking that Wal-Mart is your competition and setting your prices according to what they charge?

Please. If you continue to undervalue your work then so will your customers.

C'mon.

Raise the bar for yourselves and you raise it for cake decorators everywhere.

ThreeDGirlie Posted 23 Aug 2008 , 8:34pm
post #15 of 39

I have never sold a cake before. I am OK per state/county regs to bake from home, and I have my *first* cake scheduled for next month for a friend. It will be a 12x18 sheet cake with a "3" made from cake stacked on top of it - fairly simple design and the decorations are just daisies and butterflies. I am charging $40 as my "beginner price". I will make money from this cake, but less than $20...

I got a call on Thursday from this person's friend for a last mnute cake for Tuesday. My min price for a similar cake I quoted at $50. I didn't get the business, but at the same time I'm OK with that - I have to feel like it's worth my time and effort to make it. Even for the extra experience and pictures for my portfolio, I'm not willing to shortchange myself very much...

chutzpah Posted 23 Aug 2008 , 8:36pm
post #16 of 39

Kudos to you, ThreeDGirlie! Way to go!

ThreeDGirlie Posted 23 Aug 2008 , 9:02pm
post #17 of 39

Plus, if you're charging EXTREME low prices as a "beginner", where and when do you draw the line? Is it number or cakes, a certain time frame? How long are you willing to take a loss?

And how do you get customers that have come to you for a 3 tiered cake for $65 to pay you the $150 that you want to charge now?

I know my cakes aren't near the quality of many of the people here, but I get exponentially better with every cake, and I know where I want my pricing to be in the end... And I know that I am giving myself 6-12 months from when I sell my first cake to get there, depending on volume.

kcjc Posted 23 Aug 2008 , 10:59pm
post #18 of 39

Chutzpah,
I was just laughing out loud.The loudest belly laugh.I just came from the borders blog & read your gimmie sum o dat cake seesta I'm all lined up and you won't need to slap me twice. Thanks for your great support and the reminder that we are pricing not only for ourselves but for all the homebakers trying to get a fair fee. It's like the realization that we are undercutting our other CC buddies. I getcha. I'm going to raise my prices considerably.

indydebi Posted 23 Aug 2008 , 11:28pm
post #19 of 39
Quote:
Originally Posted by chutzpah

OMFG!

All y'all get your heinies on over here, line yourselves up nice and orderly and let me SLAP YOU UP!

Knowing you're undercharging, and then continuing to do so? No delivery charges? Charging 40 greens for a gorgeous cake that has cost you more than $40 to make the darned thing? Thinking that Wal-Mart is your competition and setting your prices according to what they charge?

Please. If you continue to undervalue your work then so will your customers.

C'mon.

Raise the bar for yourselves and you raise it for cake decorators everywhere.




icon_lol.gificon_lol.gif Geesh, I just love you!!!!

But yeah, guys! Anyone can figure a cake wrong the first time .... I've done it. But once you make that cake and you know the cost, there is no excuse for making that same cake in the future at a price that puts you in the red.

Delivery? It would cost the customer gas and time to come and get it. They either pay for delivery by picking it up themselves, or they pay for delivery by having you bring it to them at a premium price (not JUST the cost of gas!!!! Cost of wear-n-tear on the car/van, cost of insurance for your car, cost of payroll for your or your employee's time to deliver).

There is a quote I have hanging on my bulletin board above my desk that goes something like, "If you do not put a true value on your talents, the world will not raise your price for you."

Which means ..... if you want to sell it cheap, then everyone will let you.

littlecake Posted 24 Aug 2008 , 12:38am
post #20 of 39
Quote:
Originally Posted by chutzpah

OMFG!

All y'all get your heinies on over here, line yourselves up nice and orderly and let me SLAP YOU UP!

Knowing you're undercharging, and then continuing to do so? No delivery charges? Charging 40 greens for a gorgeous cake that has cost you more than $40 to make the darned thing? Thinking that Wal-Mart is your competition and setting your prices according to what they charge?

Please. If you continue to undervalue your work then so will your customers.

C'mon.

Raise the bar for yourselves and you raise it for cake decorators everywhere.




CRUD!...I WANTED TO SPANK EM!

shoulda known you'd get there first.

i must admit i've done my share of underpricing in the beginning too.

ya'll cakes are really cute, worth so much more than you are charging.

DerrellC Posted 24 Aug 2008 , 3:07am
post #21 of 39

another way to think about it is "If you have a freind in the business,make sure you pay them enough to STAY in business" I think we all have undercharged when we got started,but as our talents and and financal commitments increased I hope that out pricing reflected those factors. I don't try to compete with Wally-World ! quoting someone else in this website" good cakes are not cheap,and cheap cakes are not good"

gr8cakemaker Posted 24 Aug 2008 , 4:58pm
post #22 of 39

icon_eek.gif wow, I completely get what you guys are saying! I put alot of time and effort into those cakes, not to mention being on my feet for hours and hours. Putting my son in part-time daycare so I will have time to make my cakes (stay at home mom) AND delivering them! Thats alot of work for a little money. I will definitely start charging more for my cakes. Like someone said "If you do not put a true value on your talents, the world will not raise the price for you". That is now my new motto for my business. Its not just an injustice to myself, but an injustice to all cake decorators.

THANKS CCM! thumbs_up.gif

mommy_of_3_DDs Posted 24 Aug 2008 , 5:21pm
post #23 of 39

I am starting to venture into the world of charging a decent rate for cakes... my problem is people ask me at my day job all the time for my rate and I can't figure it out on the spot... so I usually end up making a half assed guess and and then kicking myself later...

Mind sharing the Wilton link so maybe I can print it to refer to when I get asked on the spot.

I recently did a baby shower cake in my pics (it was 4, 6 inch square blocks each diff flavors and covered in MMF and I charged $85, she ended up paying $100, I wanted to charge $125, but I "thought" that would be too much, I guess I need to stop "thinking")

I currently charge $25 for a 8in double layer with only a basic shell border and a message, should I up that one too?

chutzpah Posted 24 Aug 2008 , 5:28pm
post #24 of 39

Mommy, don't ever be afraid to tell someone you need to get back to them about the price of a cake.

MikeRowesHunny Posted 24 Aug 2008 , 5:33pm
post #25 of 39
Quote:
Originally Posted by mommy_of_3_DDs


I currently charge $25 for a 8in double layer with only a basic shell border and a message, should I up that one too?




IMO, abso-bl**dy-lutely you should charge more than $25 for ANY cake! Think about it, does it take you much longer to mix, bake, ice, decorate a 10in in comparison to a 6in? It takes me maybe 15mins longer, and then the extra ingredients cost, which is why I have a minimum charge of 60 euros for ANY cake, because, all considered, I don't spend less than 4 - 5 hours on any cake I make (with the average being 6 hours, and highly modelled cakes often take me 12 hours or more!) I don't care if the cake only serves 10, instead of 30, it's my TIME & TALENT you are paying me for. If people don't like it. they can go elsewhere!

Incidentally, I wandered onto a Dutch forum very similar to this one to find the 'oldies' advising the 'newbies' (who did very nice work), that charging much more than 2 euros per serving for a wedding cake was too much - WTF icon_eek.gificon_surprised.gificon_evil.gif ???!!! After pissing my pants at that ludicrous advice (I charge a minimum of 4,50 euros for wedding cakes, with the average design chosen being 6-8 euros pp), it made me mad as hell to read that.

yankeegal Posted 24 Aug 2008 , 10:11pm
post #26 of 39
Quote:
Originally Posted by chutzpah

Mommy, don't ever be afraid to tell someone you need to get back to them about the price of a cake.




This is excellent advice....most businesses will tell you they will get back to you with a quote.

margaretb Posted 25 Aug 2008 , 6:47am
post #27 of 39

I am a hobby baker, so I have never charged for a cake. I get asked to make cakes for family events etc. I was just talking to a cousin of mine and I told her that I saw that superstore sells a half sheet (12 by 1icon_cool.gif cake for $27. Now, unless I really spread the icing thin, I can't make one for that cheap, not to mention the time involved. So I told her I'm tempted to bring one of those next time someone asks me to bring a cake. She was SHOCKED. But your cakes are SO much better, she said. Yeah, I replied, but it would be cheaper for me to buy the grocery store cake than to make one, and it would save me a minimum 6 hours (if you include baking and cleaning up). Bless her dear little heart, she said, you could probably SELL your cake for FIFTY DOLLARS! I laughed and I told her that I would only be making a dollar or two an hour at that price, so what's the point? I am starting to talk up the time and cost involved a bit so that people realize what they are asking. I think they honestly have the mindset that if it is homemade, then it must be cheaper than storebought, so cake equals maybe 5 or 10 bucks plus an hour or two. I can see how they would think that, but it is just totally wrong.

Anyway, my point is that many people have no clue about the costs and time involved. I can understand feeling uncomfortable charging the big bucks for a cake if you lack confidence/experience. However, if I were doing a cake just for cost, I think I would try to mention that I am doing it so cheap because I consider it a learning experience, and if I were charging a business rate, it would be $xxx. That way you have set it up for a huge price increase. I always get comments about how I should sell cakes, and thanks to all the experienced decorators on this site wanting to slap all the rest of us, I am going to figure out a serious price on cakes, and when someone says that, I will say sure, but if I were selling, I would charge at least $xxx. Let's face it, if we the decorators are surprised at how much a cake costs, how will anyone else have a fair idea of the value?

julitre1 Posted 3 Sep 2008 , 3:26am
post #28 of 39

LOL, I love this topic. Here's my situation, I want to hear what everyone thinks. For a regular cake (1/4 sheet) I charge $20, I also use this price for any cake that I know will take the same amount of work or use the same amount of ingredients, so sometimes they look like more, but they really weren't. On ANY tiered or stacked cake, I charge $1 per serving. This is just barely under any bakery in my area. The next cheapest is $1.50. I justify this b/c right now, I'm still working out of my house so I don't have the lease/rent, electric and such that an extra bakery costs.

I was aked to start baking cakes for a local family fun place that has just opened, he asked what I charge for my cakes. I told him I would get a price list together. Come to find out, I charge $3 more than the supermarket he chose and he said it was because he needed someone 7 days a week and he didn't want to INCONVENIENCE me by needing a cake on a Sunday. icon_mad.gif My hubby and I are youth pastors, so what could I say?

I don't charge a devlivery fee b/c I haven't delivered any cakes outside my neighboring town. I don't think I've traveled more than 20 miles round trip for a delivery. Usually it's to the church people and I just take it to church with me on Sunday.

Basically I know I do better cakes than the supermarkets, they taste better, I always get rave reviews, but I just don't know how to get the word out. Everyone who sees my cakes are amazed and love the prices, but I'm still not getting regular orders.

Jasmine33 Posted 3 Sep 2008 , 4:35am
post #29 of 39

Julitre that must be so frustrating!!!

Margaret I am the same way as in I MYSELF am in shock how long things take. I have one batter that takes 50 minutes to prep! Another 60 in the oven. Then cool down and decorating time it was 4 hours!

SO I have started explaining things like the fact that I use real butter, bake from scratch, this cake took us x amount of hours etc.

poshcakedesigns Posted 4 Sep 2008 , 12:54pm
post #30 of 39

Beautiful cakes!! Just remember you are also trying to build up clientel. It's harder to 'raise' prices when you get regular customers because they are always going to expect to pay around the same price each time they order. Sure they will expect a few cents to go up here and there but if you jump from $50 for a 3 tier cake to over $100 your customers are going to be upset. JMO

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