## What Do You Charge?

By Leahmaria7981 Updated 19 Feb 2009 , 1:43am by indydebi

Leahmaria7981 Posted 18 Feb 2009 , 5:48pm
post #1 of 5

I have no idea how to price cakes. How much would you charge for a double layer 11x15? It's a camo cake that'll be done in BC. Thanks!

4 replies
cakesbykitty Posted 18 Feb 2009 , 10:52pm
post #2 of 5

the general rule of thumb on here tends to be... add up all your costs and triple it. That is a good starting place.

indydebi Posted 19 Feb 2009 , 12:37am
post #3 of 5

The "triple it" is a very general thing. I would go under if I did the Times-Three method. I'd be selling wedding cakes for about 1.25/serving.

Your costs are much more than just flour and eggs.

When I worked in manufacturing, my job was to establish pricing. I'd not only have to factor in the cost of raw materials, the packing costs, the transportation cost (from factory to warehouse ... from warehouse to customer) but also the labor charge, a factor for overhead, a misc cost factor, then do the ratio conversion to establish the selling price which would cover all of these expenses and a profit.

Example: To make a 2-layer 8" round cake cost me about \$7-\$8 in materials. Under the Times-Three theory, this cake should sell for \$24, I(which according to the wilton chart, is \$1/serving), giving you a \$16 profit. Out of that profit, you pay for gas to go buy your supplies (transportation costs), your electricity for baking, mixing, water heater for clean up (overhead), the cake box and foil to cover the cardboard (packaging costs), paper towels, soap, (misc costs), your time for let's say 3 hours decorating time.

You'd be money ahead to turn the order down if you're going to do Times-Three.

cakesbykitty Posted 19 Feb 2009 , 1:13am
post #4 of 5

so, then, how do we figure it out?

indydebi Posted 19 Feb 2009 , 1:43am
post #5 of 5

-How much do you spend in raw materials per cake?
-How much time do you spend running to get materials? put a dollar value on that time (rate per hour times the time it takes).
- How much are you spending on the box, board, foil?
- How mch are you spending on misc supplies?
- Utilities .... to get a GENERAL idea, take your monthly electric bill and divide it by 30, giving you a cost-per-day of electrical use. Divide that by 24 to get a cost-per-hour of electrical use. How many hours did you use the oven, refrigerator, mixer to make this cake? I know this is not a real accurate method but it will at least give you an idea.
- Soaps: At home, I have a 28 ounce bottle of Dawn dishwashing soap. One ounce = 1/2 Tbsp, so there are 56 Tablespoons in a bottle of Dawn. Divide this by the cost of the bottle to determine the cost per Tbsp of soap (assuming a Tbsp per sink full of dishwater). If you use a dishwasher ..... the Cascade soaps I buy come 20 to a packet for about \$5 a pack (\$0.25 each dishwasher load). How many sinks of water or how many dishwasher loads do you use to make a cake?
- Misc stuff like paper towels: I'd just assign a dollar value to "crippy-crap" stuff like this. \$2 or \$4 dollars or something.
- How much time do you spend IN TOTAL on this cake? you have to look at it like a business .... if you were paying a person to do EVERYTHING involved in making this cake (talking to the client, driving to get supplies, putting them away, cleaning up afterward, etc .... NOT just baking and decorating time), when would they clock in and when would they clock out? How much are you paying yourself (or them) per hour?

Add all of this up. This is what it costs you to make a cake. With this information, you can determine what you need to sell the cake for. Once you have that price, divide the price by the number of servings the cake is designed to serve to get a per-serving price, if you plan to go that route (and most do, at least for a base price).