Cupcake Pricing...unreal

Baking By blueangel174 Updated 20 May 2009 , 11:16pm by DreamCakesOnline

blueangel174 Posted 30 Apr 2009 , 8:39pm
post #1 of 26

I thought I would share this....I was asked if I could make 150 cupcakes for a graduation. After talking to the person for a while, she shared that she thought that the price her graduation committee got from Sam's was high - 30 cupcakes for $12.48. That is $.42 per cupcake. I've never done a cupcake order before, but after checking with some of the pricing cc members have suggested on here - it ranges from $1.75 - $3.00 per cupcake depending on if they are filled or not filled. I offered to do them for $.75 each because I have known her for a while, but she thought the group that is ordering them wouldn't want to pay that much. Simply crazy....

25 replies
__Jamie__ Posted 30 Apr 2009 , 8:44pm
post #2 of 26

Simply crazy is right. Most folks have a hard enough time understanding the skill, effort and sheer amount of labor making a cake is, and they really think that cupcakes are just those simple little things in plastic clamshells at Walmart. I don't offer cuppies ever, because I don't want the hassle of it. I love a pretty cupcake too...I just don't want the headache that comes along with pricing. icon_smile.gif

linda2006 Posted 30 Apr 2009 , 8:47pm
post #3 of 26

I think the fact is that customer don't realize that when we do them we put more work and better decoration then the store bought cupcakes and beside big department store like that always sell cheaper if she went to a bakery store she would not get a simple cupcake with just icing on top for .45

brannendeville Posted 30 Apr 2009 , 8:51pm
post #4 of 26

Crazy? Thsi morning I had some one ask me if I could make 5 yes FIVE 6 inch rounds for $25 dollars!!

Her response was I only want them decorated with buttercream and flowers!!

I told her I could do a dozem cupcakes for that and that that was about it!

SOME PEOPLE!

Pebbles1727 Posted 1 May 2009 , 4:13am
post #5 of 26

Me, me, me (raising her hand)... I have one to share, happened to me tonight. This lady has asked me if I can do 100 petit fours for a party and if I can beat the price she's been quoted by a home baker: $8.00 a dozen and they need to be about 3x3 inches instead of those smallish ones. Well, I just told her that since that lady apparently does it as a business, it will be better if she contributes to her bottom line. For me it's just a hobbie but I would not think that $8 per dozen of small cakes (not petit fours, IMHO) will even cover the expenses much less the trouble. But more power to whoever can do it this cheap,
P

Kiddiekakes Posted 3 May 2009 , 1:51pm
post #6 of 26

We have to break people of the cycle that cakes,cupcakes etc are cheap to make thus why as we charging so much...I don't mean to be nasty or rude but but offering to do the cupcakes for 75 cents each....you are doing the cake decoraters who do charge what they do (and deserve it) a dis-service.It is very difficult to break the habit if we keep allowing customers to determine our prices by what they feel it is worth.

Not meant to be mean!icon_smile.gifthumbs_up.gif

DDiva Posted 3 May 2009 , 2:35pm
post #7 of 26

I am seriously considering to try to get cake providers in my area to create a guild. The goal: to set pricing amongst us. If we all charge the same thing for sheet cakes, cupcakes, petit fours, etc....we all win, and make money. The decision for the customer then becomes about who they want to go with. For wedding cakes there would be a range; with a minimum per serving charge. All other offerings would be at the cake artists' discretion.

One of the other benefits is creating a network of help for each other. I swear, for a group of folks in the feel good business we can be incredibly selfish with each other. No one person can do all the cakes that will potentially be ordered. So why not help each other succeed.

This insane pricing has to stop. We hurt each other. I was just told of a local wedding cake provider who did an 11 (that's right, 11) tier cake for $300!!! At my estimate of servings ---455. That came to about 7 cents per serving!! What was she thinking????

Maybe as part of a guild (not a cake club) dessert providers will see their worth and stop letting customers determine pricing. The last time I went to Wendy's no one asked me what I wanted to pay for the burger.

ahuvas Posted 4 May 2009 , 11:06am
post #8 of 26

Even my local bakery which sells these basic vanilla cupcake with a sort of glaze icing and sprinkles on top charges over 2 dollars per cupcake. Seriously - tell her if she can find cupcakes for that little price she should probably get it icon_smile.gif

MomLittr Posted 4 May 2009 , 5:28pm
post #9 of 26

I was just asked to do a cupcake cake for a business school graduate, for 60 people............will tell her $2 per serving unfilled, or $2.25 each filled.... or would just one price (to include board, etc) be better than just saying per cupcake?

deb

kelleym Posted 4 May 2009 , 5:40pm
post #10 of 26
Quote:
Originally Posted by DDiva

I am seriously considering to try to get cake providers in my area to create a guild. The goal: to set pricing amongst us. If we all charge the same thing for sheet cakes, cupcakes, petit fours, etc....we all win, and make money. The decision for the customer then becomes about who they want to go with. For wedding cakes there would be a range; with a minimum per serving charge. All other offerings would be at the cake artists' discretion.

One of the other benefits is creating a network of help for each other. I swear, for a group of folks in the feel good business we can be incredibly selfish with each other. No one person can do all the cakes that will potentially be ordered. So why not help each other succeed.

This insane pricing has to stop. We hurt each other. I was just told of a local wedding cake provider who did an 11 (that's right, 11) tier cake for $300!!! At my estimate of servings ---455. That came to about 7 cents per serving!! What was she thinking????

Maybe as part of a guild (not a cake club) dessert providers will see their worth and stop letting customers determine pricing. The last time I went to Wendy's no one asked me what I wanted to pay for the burger.




I'm not sure if this comes dangerously close to the line of price fixing or not. You may want to consult with an attorney before doing something like this. I appreciate the sentiment behind it, but the Feds may not. icon_confused.gif

Bottom line is, a rising tide raises all boats. Let's price ourselves fairly and help EVERYONE in the industry. Duff's "$1,000 minimum" is actually a godsend for all of us who do custom cakes.

Ruth0209 Posted 4 May 2009 , 5:42pm
post #11 of 26
Quote:
Originally Posted by DDiva

I am seriously considering to try to get cake providers in my area to create a guild. The goal: to set pricing amongst us. If we all charge the same thing for sheet cakes, cupcakes, petit fours, etc....we all win, and make money. The decision for the customer then becomes about who they want to go with. For wedding cakes there would be a range; with a minimum per serving charge. All other offerings would be at the cake artists' discretion.

One of the other benefits is creating a network of help for each other. I swear, for a group of folks in the feel good business we can be incredibly selfish with each other. No one person can do all the cakes that will potentially be ordered. So why not help each other succeed.

This insane pricing has to stop. We hurt each other. I was just told of a local wedding cake provider who did an 11 (that's right, 11) tier cake for $300!!! At my estimate of servings ---455. That came to about 7 cents per serving!! What was she thinking????

Maybe as part of a guild (not a cake club) dessert providers will see their worth and stop letting customers determine pricing. The last time I went to Wendy's no one asked me what I wanted to pay for the burger.




Before you form a group that collectively sets prices, you need to read up on the federal laws that have to do with price fixing. What you're suggesting is against the law.

In the United States, price fixing can be prosecuted as a criminal felony offense under section 1 of the Sherman Antitrust Act. Prosecutions may be handled by the U.S. Department of Justice or by the Federal Trade Commission.

Good, healthy competition is one thing. Everyone agreeing to charge the same prices is another.

Lisaa1996 Posted 4 May 2009 , 5:42pm
post #12 of 26

I agree with pricing to low hurting custom bakers. I am just starting out and my biggest stress has been my pricing. I live in an area of Massachusetts where everyone buys cakes from the grocery store or BJ's. They are all used to paying such low prices that they are shell-shocked when faced with the reality of a "good" cake for a change icon_smile.gif . I want to charge enough to make it worth my while but since I do not have very many orders at a time yet, I don't want to lose anyone either. I am trying to charge 2x my ingrediant cost right now and looking to raise prices by about 5.00-10.00 per cake at the end of summer if business is good. I have read that 3x the ingrediant cost is a good standard price for birthday cakes, etc... but I really don't think I could sell anything for that much right now icon_sad.gif. It is a very hard thing to figure out.
I do agree that the cupcakes should be sold for at least 2.00/cake.
Oh, one more note...I sold two cakes this weekend and the customer actually paid me 5-10 MORE than I was asking when they actually saw the cakes! Maybe there is hope out there afterall!

DDiva Posted 5 May 2009 , 12:04am
post #13 of 26

Ruth and KellyM,
I think you misunderstand. I'm not suggesting 'fixing' prices; just an understanding of pricing. There's a difference. If you think about it, it's all around us everyday. It's not a coincidence that Wendy's, Hardees, McDonald's and Burger King all charge about the same price for their offerings.

Go have your car repaired at any dealership and compare prices with another dealership. You'll find they are very similar. Check the prices at your area hospitals and see if they aren't about the same for the same services. It's already a part of our lives.

When I discussed this with my friend, an attorney with our county DA's office, he informed me that the formation of the guild will allow its members to create a standardized pricing system for our unique industry. No one is bound to have to use it, but it is not illegal to determine fair pricing....for any industry. Hence the phrase: 'suggested retail price'. He also advised that anytime you accept money for a service, regardless of the reason (pay for the ingredients only, for example) you are in business. Folks that keep saying that they do this as hobby and only charge for the ingredients....guess what? You're in business.

The challenge for dessert providers is that most of us work alone. There is no organization such as Retail Bakers Association; etc. for us. The other challenge is that most providers are women. And we tend to undervalue what we do. The end result is doing an 11 tier cake for 7 cents a serving.

My suggestion with a guild (check the history of guilds--they preceded trade unions) is that it will provide an opportunity to talk about fair pricing for our industry. I aslo teach a business class for those thinking of starting a cake business....where we also discuss pricing.

Everytime someone does a cake for 'the cost of the ingredients'; every time someone is intimidated into a lower price; every time someone does a special occasion cake for $2 or less per serving...we all suffer.

I guess bottom line my point is this: if you don't know what a fair price for your service is how can you charge one?

Just like most of you I love what I do. But I have been in business since day one...this was never a hobby for me. Business is my background. I don't understand the concept of allowing your customers to dictate your price. If the amount of conversation that occurs on this board occured amongst the dessert providers and caterers in the areas in which we all lived, a lot of the problems that are discussed here would be solved. We don't talk to each other. It's almost like we're a secret society. And I really don't get that.

Ruth0209 Posted 5 May 2009 , 12:24am
post #14 of 26

DDiva, sorry, but when you said your goal is to try to get cake providers in your area to set pricing among you...that you'd all charge the same thing for sheet cakes, cupcakes...and that other offerings would be at the cake artist's discretion, that sounds like a group that's fixing prices.

All the fast food restaurants you mentioned don't get together and decide what to charge for a burger. They compare their prices with their competitors and know that they need to have a similar price to be competitive. Any cake decorators who care should be doing the same. I know that I "shop" my competitors.

I agree that a lot of people who sell cakes don't charge enough, and I think a cake club or whatever you want to call it to talk about the cake business is a great idea. I think it's a good idea to discuss what cakes are worth, and to encourage people to charge enough for their talent. But when you start talking about, "let's agree to this and such minimum price for this product", I'm making for the door.

DDiva Posted 5 May 2009 , 12:37am
post #15 of 26

Price 'fixing' is not illegal; price 'gouging' is.

If you are a franchisee of one of the burger places, you have to sell for the 'suggested retail price' or will lose your franchise. Is that price fixing?

Don't know if you have any IGA member grocery stores in your area. These are usually small neighborhood grocers who are members of the Grocers Association. In addition to co-oping the price of wholesale groceries; they also charge the same price for those items purchased in the co-op format. Yes, they 'fix' the price of the celery, eggs, etc. if purchased as a part of the co-op. Every IGA store will charge the same for those items. They charge what they want for items purchased directly from manufacturers or wholesale distributors.

Price 'fixing' is part of our lives....everyday. Wilton sets a 'suggested retail price' for a pan. As a retailer I am not allowed to sell that pan for more than the 'suggested retail price'. However, I can sell it for less. Is that price fixing? Of course, you've told every retailer who sells your product that they must sell it for the 'suggested retail price' or less.

Wonder how they've managed to stay in business all of these years??

kelleym Posted 5 May 2009 , 12:43am
post #16 of 26
Quote:
Originally Posted by DDiva

Price 'fixing' is not illegal; price 'gouging' is.

If you are a franchisee of one of the burger places, you have to sell for the 'suggested retail price' or will lose your franchise. Is that price fixing?

Don't know if you have any IGA member grocery stores in your area. These are usually small neighborhood grocers who are members of the Grocers Association. In addition to co-oping the price of wholesale groceries; they also charge the same price for those items purchased in the co-op format. Yes, they 'fix' the price of the celery, eggs, etc. if purchased as a part of the co-op. Every IGA store will charge the same for those items. They charge what they want for items purchased directly from manufacturers or wholesale distributors.

Price 'fixing' is part of our lives....everyday. Wilton sets a 'suggested retail price' for a pan. As a retailer I am not allowed to sell that pan for more than the 'suggested retail price'. However, I can sell it for less. Is that price fixing? Of course, you've told every retailer who sells your product that they must sell it for the 'suggested retail price' or less.

Wonder how they've managed to stay in business all of these years??




Yes, but Wilton, Magic Line, and Fat Daddio don't have a meeting and decide that the minimum price for an 8" round pan is $5.99.

If what you're proposing has the approval of a lawyer who specializes in Anti-Trust laws, then more power to you. It just makes me very, very, nervous on your behalf, and I wouldn't personally have anything to do with it no matter who signed off.

Ruth0209 Posted 5 May 2009 , 12:46am
post #17 of 26

I don't think you're understanding the legal definition of price fixing as it pertains to antitrust laws. Here's a definition from Wikipedia.

"Price fixing is an agreement between business competitors to sell the same product or service at the same price. In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to profits for all the sellers. Price-fixing can also involve any agreement to fix, peg, discount or stabilize prices. The principal feature is any agreement on price, whether expressed or implied. For the buyer, meanwhile, the practice results in a phenomenon similar to price gouging.

Price fixing requires a conspiracy between two or more sellers; the purpose is to coordinate pricing for mutual benefit at the expense of buyers. Sellers might agree to sell at a common target price; set a common "minimum" price; buy the product from a supplier at a specified "maximum" price; adhere to a price book or list price; engage in cooperative price advertising; standardize financial credit terms offered to purchasers; use uniform trade-in allowances; limit discounts; discontinue a free service or fix the price of one component of an overall service; adhere uniformly to previously-announced prices and terms of sale; establish uniform costs and markups; impose mandatory surcharges; purposefully reduce output or sales in order to charge higher prices; or purposefully share or "pool" markets, territories, or customers.

Generally, price fixing is illegal, but it may nevertheless be tolerated or even sanctioned by some governments at various times, particularly among those whose countries are developing economies. See also Collusion.

In the United States, price fixing can be prosecuted as a criminal felony offense under section 1 of the Sherman Antitrust Act.[1] Prosecutions may be handled by the U.S. Department of Justice or by the Federal Trade Commission."

A company can set its pricing structure for itself and all of its own affiliates. When competitors do it, it's illegal. Ask the phone company. Why do you think the government required all the phone companies to be broken up into smaller companies? They were price fixing.

DDiva Posted 5 May 2009 , 1:20am
post #18 of 26

This will be my last post on the subject. It iwas not my intent to create the hot topic of the day....but what fun!!!

Your interpretation of my intent is something that I can't control. You clearly feel I have tremendous power, but it is my idea to have a discussion about pricing; amongst other things (guess you missed that part). Maybe in the course of that discussion folks that continue to charge 1960, 1970 prices (yes, we have someone in the area that still charges $1 per serving) may realize that they can actually charge more and the sky won't fall.

OMG!! We've gone to anti-trust laws, etc. about cake. Lighten up. In the time it took to find all that material, you could have reached out to a cake artist in your area. Said hi. Way better use of your time, I'd say.

Price fixing was YOUR term; not mine. My intent is not, nor ever was, that sinister. And again, you credit me with a power that I'm not aware that I have.

As it has been said dozens of times on this board, if you charge anything you are conducting business. Why not conduct it profitably? Someone said last week in a post that she wouldn't pay what she charges for a cake.
Okay. I get that. But do I charge accordingly, or do I charge based on what the service is worth?

How about focus on the part of my original post that speaks to the fact that dessert/food providers in an area rarely talk to each other. That's something that each person reading this can actually affect.

Have a nice night!!! And lighten up ladies icon_smile.gif

Ruth0209 Posted 5 May 2009 , 1:27am
post #19 of 26

Hilarious...

As you said, cake business IS business. You don't get to ignore the business laws you don't like.

aliciag829 Posted 5 May 2009 , 1:42am
post #20 of 26

Tell her if you could get your flour at $5 for a 50 pound sack like Sam's does you could beat their prices. lol

I just had a conversation today with someone who thought an 8" round, 3 layer at $12.99 was expensive! (from the local grocery store)

From now on I think I will refer to grocery store / Sam's "cake" as "Schmake" because WE are the ones who make real cake!

I make real cake NOT no nasty "Schmake"!!

icon_lol.gificon_lol.gificon_lol.gificon_lol.gif

Ok I'm done.... lol I need to go to bed now...

Ruth0209 Posted 5 May 2009 , 2:42am
post #21 of 26

Schmake. I like it. Schlocky cake.

erinalicia Posted 8 May 2009 , 3:23pm
post #22 of 26

DDiva, I see where you are going with your idea. I don't think you're talking about yourself and other decorators having a pow-wow and setting prices that you all use across the board. I see it more of an informative discussion about pricing and explaining to those who are undercutting prices that they are hurting other bakers who charge more.

It's ridiculous how people on here automatically jump to the wrong conclusions and throw out legal advice based on assumptions.

sadsmile Posted 8 May 2009 , 3:30pm
post #23 of 26

cupcakes are cheep-only if you do them yourself..hahaha Where are these myths coming from?

Ruth0209 Posted 8 May 2009 , 4:16pm
post #24 of 26
Quote:
Originally Posted by erinalicia

DDiva, I see where you are going with your idea. I don't think you're talking about yourself and other decorators having a pow-wow and setting prices that you all use across the board. I see it more of an informative discussion about pricing and explaining to those who are undercutting prices that they are hurting other bakers who charge more.

It's ridiculous how people on here automatically jump to the wrong conclusions and throw out legal advice based on assumptions.




Pardon me, but I didn't jump to any conclusions. I quoted what she said she was going to do.

"...I am seriously considering to try to get cake providers in my area to create a guild. The goal: to set pricing amongst us. If we all charge the same thing for sheet cakes, cupcakes, petit fours, etc....we all win, and make money..."

When someone says they want to "set pricing amoungst us", there's not anything to misinterpret in that.

erinalicia Posted 8 May 2009 , 4:42pm
post #25 of 26

even if that's what she said initially, I guess YOU never make mistakes in explaining yourself. She came back and explained what she meant several times and you still continue to harp on "price-fixing"

Whatever... I was just trying to tell her that I understood what she was saying. GEEZ... lighten up. It's all doom and gloom on here lately. People automatically assume the worst about people they don't even know!

DreamCakesOnline Posted 20 May 2009 , 11:16pm
post #26 of 26

I'm new here but I was just asked today for my cupcake pricing so this is a hot topic for me. We live in NC and the cost of living is lower here than many places. I told the customer that I would do unfilled with BC or poured icing and a simple decoration for $1.25 each with a dozen minimum and $1.75 each filled. That's $20 minimum and I up-charge for mixed fillings and more elaborate designs (I decide what is elaborate and most things are elaborate unless I can roll out some fondant and cut out a daisy and stick it on there... icon_biggrin.gif). I too am trying to build up business and I sold over 200 of them this past weekend at a street festival for $1 each just trying to get some promotion done. It was cheaper than advertising in the local paper and more effective. People that didn't even buy anything asked for cards and 200 of them paid me to try my product. I've gotten one order already, talked to three brides and have gotten some really positive feedback so it was money well spent but it took days and a lot of materials to do it, plus the cost of the booth. One of my college majors was marketing (mgmt and acctg too) and they taught us to educate our consumer to justify the cost of our product. When I price something, I point out the time needed to carve, airbrush, fill, etc., as well as the costs associated with the materials. I break it down into the details that they don't want to see and point out the time and expense to achieve them. (Hand made flowers? that will take about three days for a wedding cake... plus drying time.) And, the cake challenge shows don't help, they think we can crank out a three foot cake in a day because they don't see all the prep that goes into it beforehand. But, let's be honest, they wouldn't come to us if we were doing something they could do themselves and we have a lot of investment in our materials and equipment that requires an adequate return. They come to us because we are artists and they are not. Tell them to watch the "How It's Made" show on grocery store cakes where the entire process is done by robots, right down to the shell borders around the top and bottom. Sometimes you just have to be blunt (something I'm good at, evidently) and say something like: "Let me get this straight... You're asking me to make you a steak dinner for the cost of a hamburger?"

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