Look At This...what Would You Charge?

Business By cakedesigner59 Updated 19 May 2009 , 7:13pm by Sasha_Sweetie

cakedesigner59 Posted 17 May 2009 , 9:34pm
post #1 of 36

Here's a cake I did for a restaurant I work with. Usually I do cakes for their catering events, but they wanted this to serve (by the slice) in their new deli section (they'll display it in their case). It's a 10" round, brownie sour cream cake (cake mix doctor). It has 3 cups of choc chips in it, plus 12 ozs of chocolate in the icing, and a hershey bar on top. I usually charge $35 for a 10" round, but I have much more $$ into this than a normal cake. I think she can sell 12-15 slices in it, and get $4-$5 per slice. Is $40 too much to ask for it? I really don't know. I want to make a profit, but she has to make one too!

Thanks
LL

35 replies
sari66 Posted 17 May 2009 , 9:39pm
post #2 of 36

If it's going to be sold by the slice I'd charge no less than $6 per slice.

Minstrelmiss Posted 17 May 2009 , 9:43pm
post #3 of 36

That's a tough one. If she were only to make $20 after paying you, I can't imagine that she would want another one...yet, you can just give great cake away...hmmmmm...what kind of place is the restaurant? Could she charge more? like $6.75? Then her profit margin would be bigger and you won't have compromised. Just a thought...maybe offer her a different cake next time that isn't as expensive to produce. good luck!

btw, it looks delicious icon_wink.gif

KatieKake Posted 17 May 2009 , 9:53pm
post #4 of 36

You need a lot more information from her, how many servings does she plan on getting from a 10 inch cake, Wilton says you get 28 party servings from a 10 inch round cake. At $4.00 per serving that is $112, at $40.00 you would be barely covering your cost, and she would be getting $72 for just cutting it. I would figure the cost of making it, and then what she would be selling it for, and then figure what your percentage should be. Off the top of my head, I would think you should get 75% of the selling price. but I have never sold a cake to a restaurant so I really don't know what profit they have to make. $40 is now where near enough.

Swede-cakes Posted 17 May 2009 , 10:07pm
post #5 of 36

I can't believe I saw this cake before I'd eaten dinner! I just want to grab a fork!!

Wilton may state 28 servings, but sometimes a restaurant will cut wedge style. A 9" pan which I have on the counter right now would theoretically yield 14 - 2" wide wedges. (28" circumference). This may affect how the manager calculates her numbers buying and reselling.

What are the menu prices that the restaurant owner charges for her other dessert cakes? I'd just talk to her about it more.

cakedesigner59 Posted 18 May 2009 , 2:30am
post #6 of 36

She told me she would charge $4-$5 per slice, and I figure it would be large wedge-style slices (like you'd expect to get at a restaurant, no smaller than 2" wide). I think the most she would get out of it is 15 slices. If she sells the whole thing at $4 per, she'd make $60 gross, $20 net (if I charged $40). If she charges $5 (high for this area) then she'd make $75.00 gross, $35.00 net (after my $40).

-K8memphis Posted 18 May 2009 , 2:46am
post #7 of 36

I would price it according to how I make my money. I don't have a need to know what she can make off it. She may not need to make any money on it--not my concern either way.

$40 is so low ball--I would hate myself in nothing flat for taking on work like that. That's like one dollar a serving by my standard using Wilton's chart. If you go by the 28 servings another poster quoted that's not even $2 a serving.

Unless you are doing a tremendous volume, trucking caks in daily you're not going to make any money.

Another idea is that I'd go with an 8" cake--cutting a 10" cake like that will cause the polar ice caps to melt faster I'm sure.

It is not your job to make money for her.

icer101 Posted 18 May 2009 , 2:56am
post #8 of 36

hi, you need to p/m indydebi.... as soon as possible ha! that cake is too nice and scrumptious looking to let it go for $40.00.. it is also a lot of work

snarkybaker Posted 18 May 2009 , 3:08am
post #9 of 36

We get from $59 to $65 for a 10 inch chocolate cake with a ganache drizz. Pie shaped edges os a 10 inch cake are large. I would suggest that you talk to her about selling it as " Cake for a crowd" or " Sweetheart cake", meant to share and charge more like $8.95

If you don't make your own desserts, typically you need to mark them up 100% to make sure that you still make a profit after spoilage and shrink ( slices that break etc. ) so 12 X 8.95 would be $52 for you and $55.40 for her.

artscallion Posted 18 May 2009 , 3:16am
post #10 of 36

Agree with K8. The price of your cake should reflect your needs, not hers and should not be dependent upon what she does with it. The price of your cake should reflect Your costs, real and intangible, plus whatever profit over and above that makes it worth it for you to do this. Your price is YOUR price, whether she, in turn, sells it for $10 a slice, or donates it to a homeless shelter.

Your cake has a value. figure out what it is and base your price on that. Especially don't worry if your price ends up being too high for her. That just means she can't afford to buy that kind of cake from you and still have you BOTH make a profit. Or she needs to charge her customers more per slice. But any reluctance on her part to do that does not lower the value of your cake or diminish your profit.

patticakesnc Posted 18 May 2009 , 3:32am
post #11 of 36

Ok if she gets $5 per slice and does 14- 2 in slices that is $70. She pays you $40 and profits $30. Nice profit on a cake for her, BUT.....You charge $40 and it costs you how much to make it?????? In order to make what she makes it would have to cost you $10 to make that cake, electricity, ingredients, time and talent! NO, don't you sell that cake for $40 to NO ONE! No less than $50.

I understand you want to take her profit into consideration and that is why I have spelled it out for you, but really you shouldn't. As hard as it is, you really shouldn't. She should price her sales according to her cost, not you pricing her cost according to her sales.

snarkybaker Posted 18 May 2009 , 3:42am
post #12 of 36

The thing you all are missing is that if it is not profitable for the restaurant owner, then she won't buy anything. It's not like selling cakes to a Mom who has an emotional investment in the cake. If the OP wants to sell cakes to businesses, then realistic price points have got to be met.

A cake does have a value, and to a business owner it is ZERO if ther is no profit to be made.

patticakesnc Posted 18 May 2009 , 4:00am
post #13 of 36
Quote:
Originally Posted by snarkybaker

The thing you all are missing is that if it is not profitable for the restaurant owner, then she won't buy anything. It's not like selling cakes to a Mom who has an emotional investment in the cake. If the OP wants to sell cakes to businesses, then realistic price points have got to be met.

A cake does have a value, and to a business owner it is ZERO if ther is no profit to be made.




I agree with this..but if you read my post you will see that I am saying that she needs to make sure she is making a profit as well rather than once everything is paid for that is is only making $5 and then the other lady is making $30. I simply think she needs to up it a little to make sure it is worth her time and effort.

artscallion Posted 18 May 2009 , 5:20am
post #14 of 36
Quote:
Originally Posted by snarkybaker

The thing you all are missing is that if it is not profitable for the restaurant owner, then she won't buy anything. It's not like selling cakes to a Mom who has an emotional investment in the cake. If the OP wants to sell cakes to businesses, then realistic price points have got to be met.

A cake does have a value, and to a business owner it is ZERO if ther is no profit to be made.




If the restaurant doesn't want to buy her cake at enough to cover her costs/time/profit, why would OP want to sell this cake to this business then anyway?

Everybody needs to fit into a realistic price point. What I'm saying is that this shouldn't be accomplished by OP taking a bath on the deal while the restaurant hums along at standard profit all because OP based the price of her cake on how much the business could sell it for, not a realistic price point for the realistic cost of this particular cake. If the realistic cost of her cake doesn't mesh with the realistic price point for the restaurant, then OP would either need to reduce her costs to make it profitable to sell to them, or sell to a higher end market.

When OP goes to the grocery store to buy those three cups of chocolate chips, does the cashier ask her "how much is Betty's Diner going to pay you for your cake, so I know how much to charge you for these chocolate chips."

See what I mean? The grocer places a realistic value on their goods (realistic meaning they cover their costs and make a profit). The restaurant places a realistic value on their goods (again, realistic meaning they cover their costs and make a profit). Why should OP be the only one in the equation floundering around at the mercy of everybody else's profits? Her goods need to have a stable, realistic, actual value in the equation as well.

350BakerStreet Posted 18 May 2009 , 5:38am
post #15 of 36

I agree with this as well...you'll hate yourself every day that you have to make a cake for a pocket of change, especially if you get more orders and can't take a larger order because you're too busy with the diner cakes. Is there another restaurant in town that would be better suited to your talents? A steak house, perhaps? Don't waste your time, money or energy on someone that doesn't value what you do. It's an ART icon_biggrin.gif

350BakerStreet Posted 18 May 2009 , 5:39am
post #16 of 36

Besides, if they can make it for cheaper...let them. JMO

Evoir Posted 18 May 2009 , 12:35pm
post #17 of 36

Good point.

Where I live, you can buy an 8 inch chocolately cake from a bakery chain for $40. But the cake is mass produced off-site then trucked into the store, likely frozen and thawed, with cheap buttercream and sprinkles...it LOOKS okay but you can tell its made on the cheap.

When I make a cake, I use quality ingredients, I don't mass-produce and I only create something that I would eat myself. For that, I'd have to charge at least $80 for one of my 8 inch chocolate gateaux.

I think you are selling yourself short, OP. Truly, you cannot compete with the mass producers with those prices when you are buying select ingredients and making it that huge and lush. Let the cafe owner either make her own, or raise her prices. There is nothing stopping her also from buying a cheap cake thats been churned out with its 1500 other brothers in a production line, if she wants to keep her prices low.

Look after YOUR bottom line. If you want to keep her business, make her a cheaper cake with cheaper ingredients and fewer embellishments ...she can't get your quality at Wallyworld prices.

dhccster Posted 18 May 2009 , 1:13pm
post #18 of 36

That is a yummy looking cake. I hope everything worked out for you and you received a price you felt comfortable with. icon_smile.gif

-K8memphis Posted 18 May 2009 , 1:23pm
post #19 of 36
Quote:
Originally Posted by cakedesigner59

Here's a cake I did for a restaurant I work with. Usually I do cakes for their catering events, but they wanted this to serve (by the slice) in their new deli section (they'll display it in their case). It's a 10" round, brownie sour cream cake (cake mix doctor). It has 3 cups of choc chips in it, plus 12 ozs of chocolate in the icing, and a hershey bar on top. I usually charge $35 for a 10" round, but I have much more $$ into this than a normal cake. I think she can sell 12-15 slices in it, and get $4-$5 per slice. Is $40 too much to ask for it? I really don't know. I want to make a profit, but she has to make one too!

Thanks




I don't know--with all the gazillion pricing posts I'm just curious as to why you'd only charge $35 for a 10" in the first place.


Quote:
Originally Posted by Evoir

Good point.

Where I live, you can buy an 8 inch chocolately cake from a bakery chain for $40. But the cake is mass produced off-site then trucked into the store, likely frozen and thawed, with cheap buttercream and sprinkles...it LOOKS okay but you can tell its made on the cheap...

...Let the cafe owner either make her own, or raise her prices. There is nothing stopping her also from buying a cheap cake thats been churned out with its 1500 other brothers in a production line, if she wants to keep her prices low.

Look after YOUR bottom line. If you want to keep her business, make her a cheaper cake with cheaper ingredients and fewer embellishments ...she can't get your quality at Wallyworld prices.




I applaud this business is business acumen. We're not talking about someone giving a friend a deal--here's is one business lady who knows how to wheel and deal.

She knows how to squeeze a dime till it pees eleven pennies, she knows how to find a soft spot and make it to be an advantage to her bottom line. And it's our wise restaurant chickie. More power to her. But she won't be getting any such deals from me.

Cause like I always say, I may not be real smart but I ain't that dumb.

Kitagrl Posted 18 May 2009 , 1:26pm
post #20 of 36

I don't think her profit margin has to be all that great...she has other things making profit for her. Any profit off your cake is still profit. I would think making $5-$10 off the cake is maximum what she should expect. If she gets more customers because the dessert is so yummy, then her profit goes up anyway in volume.

snarkybaker Posted 18 May 2009 , 1:26pm
post #21 of 36

The OP asked " Is $40 too much ?" and I replied no and suggested se should be able to get even more, but that will require some salesmanship on her part, ie: helping the restaurant owner with some menu ideas, thus building the value of her cake.

It's dumb to make product at a loss. It's even dumber to walk away from good business because of ego and/or arrogance. The nice thing about wholesale sales is that they are always there. They pay every week even when weddings and graduations and the like aren't around to pay the bills. If she talked to the restaurant about things like getting her some supplies at wholesale, or guaranteeing a minimum order so she could do all of her baking and delivering at once, she could cut down costs and make some decent money.

Business is business and while that is a nice cake, it certainly isn't ART. It is a commodity, and if you are going to be in the commodity business, then you need to be aware of price. If you want priceing guidelines check out Sweet Street. They make exactly this kind of dessert and sell them to restaurants .

http://foodservice.sweetstreet.com/product_info.cfm?id=113

-K8memphis Posted 18 May 2009 , 1:36pm
post #22 of 36
Quote:
Originally Posted by snarkybaker

...then you need to be aware of price. If you want priceing guidelines check out Sweet Street. They make exactly this kind of dessert and sell them to restaurants .

http://foodservice.sweetstreet.com/product_info.cfm?id=113




^^^ Graphic content alert ^^^
Now I want some banana chocolate cake and it's only 8 o'clock in the morning!!!

michellesArt Posted 18 May 2009 , 1:42pm
post #23 of 36

i just had a similar experience-sold my cookies to a store owner i wanted $2 ea she'd only go $1.75 (and sell at $3) but after two orders she told me she's going to buy them at $2 because she realizes how much goes into even the simple one. now i think i was lucky and the op should hold out. this is one of those specialty cakes (places like boston pizza or the keg would charge over $6 per slice and think nothing of it) if she doesn't like the price she could order frozen desserts from her supplier and serve those (she would definately make a profit) but if she want's to serve what she (restaurant owner) knows is fresh and homemade with quality ingredients then she has to pay for it just like any other customer-don't be concerned about her profit

tcakes65 Posted 18 May 2009 , 1:42pm
post #24 of 36

Delicious looking cake!! icon_biggrin.gif When selling wholesale you cannot expect to make the same profit you would selling directly to the consumer. I'm sure the restaurant doesn't expect to make a huge profit from your dessert cakes. However, you should price the cake where you're making at least a 50% profit. If your cost is $25, then offer her the cake for $50. If she sells 15 slices at $5/slice then you both will make a $25 profit. Set a profit margin you are comfortable with. It's trickly because you want to compensate yourself without pricing yourself out of the wholesale market. If the price of the cake is too high for the restaurant or your profit margin too low, consider modifying the cake design or come up with other, less expensive cakes for the restaurant. You shouldn't feel obligated to offer them this particular dessert cake.

cakedesigner59 Posted 18 May 2009 , 4:37pm
post #25 of 36

Gosh, thanks everyone for weighing in. I charged $40...I know some of y'all will yell at me. But I had about $15 in the cake, so I made $25 on it. I was feeling guilty charging that until I read everyone's posts saying that I am undercharging. Hands down, figuring what to charge for a cake is the hardest part of being in this business. I told this restaurant owner that I do not want to be in the wholesale cake business (I do this part time, and like someone said, I don't want to have to make 8 party cakes to make the same as I would on one wedding cake). But I do want to keep doing her catering cakes (for large parties). She's a very nice lady, and I don't feel she would ever try to take advantage of me. Just thought I'd throw that in for what it's worth.

Win Posted 19 May 2009 , 1:45pm
post #26 of 36

Cakedesigner: I tried to PM you, but my messages keep getting stuck in my Outbox... I was just wondering which Cake Doctor book this cake is in? I have the original and could not find it. I know she has a Chocolate Cookbook out now and it is possibly in that --but I don't have that one yet. My son has a birthday on Friday. He's seventeen now and even though I was able to sneak in a fondant theme cake on his 16th birthday, he much rather prefers simple chocolate cakes without all the fuss. Could you point me in the right direction for this recipe. Or, if it is not too much trouble (I know you stay really busy) could you PM me with the recipe?

Thanks for any help you can provide!
Win

-K8memphis Posted 19 May 2009 , 2:18pm
post #27 of 36
Quote:
Originally Posted by cakedesigner59

Gosh, thanks everyone for weighing in. I charged $40...I know some of y'all will yell at me. But I had about $15 in the cake, so I made $25 on it.




I'm glad that's all working out.

Are you sure your cost is that low? Did you add in for any time, shopping time, transporting the groceries home, unpacking & storing ingredients, planning, making baking setting up the cake, washing the dishes, cleaning the kitchen, paper towels, hot water, utilites, gasoline, car expense?

Just a costly thought for you.

Win Posted 19 May 2009 , 2:45pm
post #28 of 36
Quote:
Originally Posted by k8memphis




Are you sure your cost is that low? Did you add in for... paper towels...
Just a costly thought for you.




icon_biggrin.gif Good thing I'm not in this game as a business... all my profits would go straight into paper towels... I'm a little OCD (CDO) about them. icon_redface.gif

-K8memphis Posted 19 May 2009 , 2:49pm
post #29 of 36
Quote:
Originally Posted by Win

Quote:
Originally Posted by k8memphis




Are you sure your cost is that low? Did you add in for... paper towels...
Just a costly thought for you.



icon_biggrin.gif Good thing I'm not in this game as a business... all my profits would go straight into paper towels... I'm a little OCD (CDO) about them. icon_redface.gif




Me too. I know polar ice caps weep in response to my paper towel addiction.

cakedesigner59 Posted 19 May 2009 , 2:52pm
post #30 of 36

K8, that was just ingredients, etc. Not my time. I've long since resigned myself to the fact I'm not going to get rich making cakes. Especially the small ones. I had that same customer cancel a cake this morning because the client doesn't want to pay what I charge. Thankfully, I hadn't baked it yet. I hope the eggs keep.

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