Pricing - Was I Unreasonable??

Business By aliciag829 Updated 16 Jun 2009 , 11:05pm by aliciag829

aliciag829 Posted 16 Jun 2009 , 12:21am
post #1 of 45

Ok, so hopefully I posted this in the right section, since I have never asked a question about pricing before. Anyway, someone I know asked me for a price on a 100 pc dessert bar tray with 3 different items on it. I gave her a price of $70 and I was laughed at. Was I being unreasonable?

I figured:

$35 for the ingredients which I calculated as closely as possible
$28 for labor 4 hours of labor x $7 per hour
$7 for the plastic tray and lid from my local supply store
The electric is included in my rent.

So this came out to $70. My local grocery store charges $24 for a 100 pc tray and a really nice Italian bakery I called charges $60.

Noone seems to understand people who bake out of their home can't buy ingredients for pennies on the dollar like the big grocery store chains and bakeries can.

She was really disappointed because she loves the way my baked goods taste compared to the grocery stores, but is unwilling to pay such an amount. What would everyone else have charged?

44 replies
jadak Posted 16 Jun 2009 , 12:27am
post #2 of 45

"She was really disappointed because she loves the way my baked goods taste compared to the grocery stores, but is unwilling to pay such an amount. "

Sounds to me like she was more rude than disappointed. She laughed at you? Man, that's unsettling to me. Your price IS your price. Your goods are worth it...she knows that, but is just unwilling to pay what they're worth. So be it. It stings sometimes to lose a customer, but it's better to lose one than to bust your hump for someone for peanuts.....only to have others expect the same from you.

Kiddiekakes Posted 16 Jun 2009 , 12:33am
post #3 of 45

well.I would PM indydebi and ask her since she is also a caterer.Don't you think your hours of baking,mixing,buying ingredients etc are worth more than $7.00 an hour? I do.....It takes a temendous amount of time to bake desserts for a dessert bar and you would have to do alot for 100 people.Don't under estimate your value and worth...If they don't want to pay the money then let them trot on down to Kroegers or Costco...

CoutureCake Posted 16 Jun 2009 , 12:34am
post #4 of 45

Home baked taste comes with a price!!!

Honestly... I'd have charged at least $1-$4 per dessert for those "bars" (depending on what they are) because if they want MY time, they're going to PAY for MY TIME... If she wants craptastic tasting bars, she can go to the big box store that gets them shipped in frozen off the truck, if she wants something freshly baked using quality ingredients then she's got to pay for them. Simple as that. Just because you're buying the guilt trip hook, line, and sinker doesn't mean that your product is less valuable than what you quoted. Eventually you'll learn to say "too bad, I'd have loved to bake them for you too! NEXT!!!!!!!" icon_biggrin.gif

The first lesson on the business side of the industry (even if you're doing this "from home") is that you're a business, you're not competing with the big box store or even the bakery up the road, you're providing a quality product in your specific niche, you either fit what someone wants or you don't. Not every person out there is your customer, nor do you really want people who are going to whimper that you're charging them too much as your customer. Your time isn't worth that! You price your product for what the market will bear, OTOH, you're in business to make money on the product you produce in order to thrive, now if the auto companies and banks could figure that part out we wouldn't be in the mess we're in there either...

kakeladi Posted 16 Jun 2009 , 12:35am
post #5 of 45

.........local grocery store charges $24 for a 100 pc tray and a really nice Italian bakery I called charges $60....gave her a price of $70 and I was laughed at.....

Fresh, home-made, good tasting, quality food items just $10 over the 'compitition' and you are laughed at??? This is not a friend.

cookiemama2 Posted 16 Jun 2009 , 12:37am
post #6 of 45

Oh well, her loss. I wouldn't feel bad, she definately was rude. Let her eat grocery store crap then!!!

aliciag829 Posted 16 Jun 2009 , 1:10am
post #7 of 45

Thanks for the feedback. Just to clarify, it was 100 pieces on the tray, not to feed 100 people, because I know I wouldn't eat just one!! lol

Is there a per piece guideline that people use to calculate costs for this?

sari66 Posted 16 Jun 2009 , 1:21am
post #8 of 45

Sounds like you cost out fine even if you're only charging 7 per hr. It's her loss that's she too cheap to pay it.
As the great one says "Next!"

CoutureCake Posted 16 Jun 2009 , 1:30am
post #9 of 45

Even if it is 100 bars not 100 people (which i did understand btw), it's still the same price break down. One portion = $1-4 depending on what the bars are (i.e. unfrosted brownies vs. super ewwey gewey caramel walnut with double-chocolate fudge buttercream icing).

I also agree, I wouldn't be eating just one bar either. We say a cake serves approximately 23 people, it isn't our job to figure out that it really just means 10 of Jethro's family members. LOL... 23 portions is what we're selling... In this case, you're selling 100 portions.

She's getting a deal if she goes with you is what I was trying to point out ;o))

kelleym Posted 16 Jun 2009 , 1:40am
post #10 of 45

100 bars for $70 = .70 ea

Tell her to go into Starbucks and price their pre-frozen mass produced dessert bars. Maybe she would laugh at the person at the register because they are $1.65 - $2.25 ea? (and their quality is hit-or-miss)

Premium custom product = premium custom price.

I keep thinking of


where the lady who wants her highlights for free blankly says "No, I don't want you to work for free..." while what she's clearly asking for is for the hairdresser to work for free. People just don't get it. tapedshut.gif

indydebi Posted 16 Jun 2009 , 1:46am
post #11 of 45

(Warning: Mom-finger is out and ready!) icon_twisted.gificon_biggrin.gif

First ... What CoutureCake said. All of it. In triplicate.

- If she's having other food, then you allocate 3-4 pcs per person, which means this will serve 25-33 people.

- Debi's Rule of Little Foods: 1/4 the size means 4 times the price. Smaller food does not have a smaller price tag. Smaller food is VERY labor intensive.

- Comparing to grocery store platters is irrevelant. Those are "frozen from the box and cut into little squares" desserts.

- In the figures you supplied, you're giving these to her at cost. As I've mentioned before, if you were doing this as a real business (and don't flame me for the phrase, it's for illustrative purposes), at the end of the week, when you were writing checks for the business, you'd write a check to:
..........the supplier for the cost of ingredients.
..........the other supplier for the cost of the plastic tray and lid
..........your employee for their payroll for the $7/hour you paid them to make these.

And after you do that, you make .... (let's see, subtract the one, carry the 4) .... oh yeah .....NOTHING!!!!!!!!!!!!!!!!! Where's the allocation for overhead? (elec, rent, veh insurance, liab insurance, accounting svc cost to write the payroll check, veh expense (gas, oil, tires), etc.) Where's that little thing we all like to shoot for? Oh what do we call it? Oh yeah ... PROFIT??????

- Your "friend" was wanting homemade special desserts and was unwilling to pay 70 cents each for them. She wasnt' a customer in the first place. And not much of a friend if she can't understand that. Now if she really can't afford to spend $70, that's one thing and I respect that. But is she just thinks 70 cents a piece is too expensive, then let her go to the grocery store and buy Oreos and twinkies.

patticakesnc Posted 16 Jun 2009 , 1:54am
post #12 of 45

She can buy reese cup two packs for $1.09 and that way she is only paying $0.55 each if she doesn't want to pay $0.70 each I guess..........Yeah that's right....SHE CAN'T GET A WHOLE CANDY BAR FOR WHAT YOU ARE CHARGING! Ohhhh or she can buy a box of little debbie cakes!

Don't let her do that to you. That is just wrong. And don't pay yourself minimum wage! I don't charge as much as many do for my cakes but I still make some money.

Repeat after me..."I am a baker...My time is worth money....I will not provide my time for FREE anymore!" Now didn't that feel good icon_smile.gif

summernoelle Posted 16 Jun 2009 , 2:02am
post #13 of 45

OK, so this one person scoffed. Shrug it off and continue on. There are people who will pay you every penny (and then some) or what you deserve to be paid. You just have to find the right ones.
When I first started, a lady wanted to pay me in food stamps. At $1/serving for a 2 tiered fondant cake with a RI tiara on top. Seriously. But eventually I found great clients who pay what I ask. It will happen for you eventually.

CakesbyCindi Posted 16 Jun 2009 , 2:08am
post #14 of 45

I had to laugh reading this. I just (not 30 mins ago on my way home) paid $1.59 for a Little Debbie Brownie bar, go figure.... It was dry, it had probably been around for weeks or longer, it has all kinds of artificial stuff in it, and you were going to do these for .70 a bar, let me know where I can buy one..... I'll take homemade yummy over bought anyday, where were you when I bought this Little Debbie, no corner stand?? Now I feel sick... I think it's the Little Debbie.... Stick to your guns, don't sell yourself short. Tell her to go buy 100 Little Debbies at $1.59 a piece, lets do the math....

aligotmatt Posted 16 Jun 2009 , 2:10am
post #15 of 45

I just want to add to this too, just to really nail home that you should BE GLAD she laughed and you will not be stuck with this order.

I really think you are missing some time. The time you will spend making a list, driving to the store, putting the items in your cart, waiting, checking out, driving to the party supply store, waiting in line, driving back home... Not to mention the gas in your car to do these tasks. Unloading her ingredients, mixing, making, decorating (?), setting up on the tray, cleaning up your kitchen after all of it (soap, paper towels)... Now your $7 an hour is more like $4 an hour...

Your time is worth more than that!!! I delivered a cake to a restaurant last week and I was chatting with one of the bartenders and he said, so how much does a cake like that cost? And I said, that particular cake was $165, but she has a premium flavor and my costs are much higher making it. So he said, holy cow, even with a premium flavor, $165! (it was an 8" and 6" round) and so I looked at him and said, "I don't work for minimum wage, would you?" and he said, huh, no I wouldn't. And that ended that.

Do you really think your time is worth less than minimum wage?

Lenette Posted 16 Jun 2009 , 2:28am
post #16 of 45

100 pcs? So your charge for homemade, fresh items was less than $1 each? I say you were more than reasonable and I agree with the PP that she as rude. It is just as easy to say thank you but that is more than my budget will allow.

Sheesh!

Keep your chin up, you did fine. She is the one with the problem!

aliciag829 Posted 16 Jun 2009 , 3:57am
post #17 of 45

I know! Everyone is right and I wanted to charge her more actually, but it seems like I have to keep lowering and lowering my prices in order to get any business. Where are the people willing to pay me what I think I deserve? Waaaaaah! The person I quoted the price to lives in the *nicest, richest* neighborhood in my city's area. We're talking half a million dollar homes.

icon_cry.gificon_cry.gificon_cry.gif

And I'm SOOOO sick of explaining to *every* customer I give a price to, why I charge as much as I do! People will never understand until they're in my shoes themself that I can't sweat out a batch of cupcakes or pastries and give them away for nothing! I guess caking isn't a very good job for profit in my area.

icon_cry.gif

/ end of my rant

****** please don't let me back on CC when I'm pms-ing next time!!

icon_lol.gificon_lol.gif

Nchanted1 Posted 16 Jun 2009 , 4:46pm
post #18 of 45

RAISE YOUR PRICES!

I also got sick of explaining whay I was charging $3 a serving for a scratch baked liquer infused dessert. So, I raised my charge to $5 a serving.

It was like MAGIC! It weeded out the bargain hunters. It brought me to the attention of people who are willing to pay for the best. I work less, and earn more.

There's no glory or pleasure in being the cheapest. Be the best!

indydebi Posted 16 Jun 2009 , 4:49pm
post #19 of 45
Quote:
Originally Posted by Nchanted1

RAISE YOUR PRICES!

I also got sick of explaining whay I was charging $3 a serving for a scratch baked liquer infused dessert. So, I raised my charge to $5 a serving.

It was like MAGIC! It weeded out the bargain hunters. It brought me to the attention of people who are willing to pay for the best. I work less, and earn more.

There's no glory or pleasure in being the cheapest. Be the best!



What an awesome lesson!

Can we sticky this post so everyone can read this and know that higher pricing does not mean fewer customers?

You go girl!! thumbs_up.gif

playingwithsugar Posted 16 Jun 2009 , 4:57pm
post #20 of 45

[quote="indydebi"](Warning: Mom-finger is out and ready!) icon_twisted.gificon_biggrin.gif
quote]

Is that thing loaded and are you licensed to carry it? icon_lol.gif

Seriously, if she want's the Italian bakery's price, or the supermarket price, then she has to go buy her stuff at the bakery or market. Your price, is your price. And yes, you're not charging enough.

We just discussed this on another forum. The person who presented their pricing charges approximately $3 per person, not by the piece.

Theresa icon_smile.gif

goodiegoddess Posted 16 Jun 2009 , 5:17pm
post #21 of 45

Ok, so I am still new and this my first wedding I had done a candy/chocolate bar for. All handmade truffles, chocolate covered pretzels and chocolate hearts. When I was done I didn't think I charged enough for all my work.

I charged her $1.65/per pc with a $50 delivery and set-up . The bride told me that she had looked at other options and I was the best deal!

YOUR TIME IS WORTH$$$$$ The right people will pay
LL

indydebi Posted 16 Jun 2009 , 5:31pm
post #22 of 45

what an AWESOME set up! Ok, I'm flat out tellin' ya that I'm stealing this idea!

__Jamie__ Posted 16 Jun 2009 , 5:38pm
post #23 of 45
Quote:
Originally Posted by kelleym

100 bars for $70 = .70 ea

Tell her to go into Starbucks and price their pre-frozen mass produced dessert bars. Maybe she would laugh at the person at the register because they are $1.65 - $2.25 ea? (and their quality is hit-or-miss)

Premium custom product = premium custom price.

I keep thinking of


where the lady who wants her highlights for free blankly says "No, I don't want you to work for free..." while what she's clearly asking for is for the hairdresser to work for free. People just don't get it. tapedshut.gif




OMG...thank you for posting that link, I've been searching for it forever!! Hahahahahaha! icon_twisted.gif

__Jamie__ Posted 16 Jun 2009 , 5:40pm
post #24 of 45

Dang Goodie...NICE!!!

aliciag829 Posted 16 Jun 2009 , 5:59pm
post #25 of 45

So if I charged $3 per person, and a 100 pc tray serves 33, we'll say, that would be $99 which is $29 more than what I wanted to charge her.

If I charged $5 a person, it would be $165....and in a year's time I'd have enough money to BUY the Italian bakery.


icon_lol.gificon_lol.gificon_lol.gif

Franluvsfrosting Posted 16 Jun 2009 , 6:13pm
post #26 of 45

Beautiful setup Goodiegoddess!

FromScratch Posted 16 Jun 2009 , 7:07pm
post #27 of 45
Quote:
Originally Posted by Nchanted1

RAISE YOUR PRICES!

I also got sick of explaining whay I was charging $3 a serving for a scratch baked liquer infused dessert. So, I raised my charge to $5 a serving.

It was like MAGIC! It weeded out the bargain hunters. It brought me to the attention of people who are willing to pay for the best. I work less, and earn more.

There's no glory or pleasure in being the cheapest. Be the best!




I *heart* you!!! This is exactly what I did. It worked for me and I love it. Couldn't be happier really. Work smarter not harder is my mantra.

CoutureCake Posted 16 Jun 2009 , 7:13pm
post #28 of 45

The day you stop apologizing for your prices is the day that you'll find people willing to pay them. When you quote your price for the product and stand firm on it is the day you're going to start getting paid your price.

I'll quote the guy our family buys all of our vehicles from who doesn't dinker around with negotiating prices "If I'm not giving you my best price from the start, you can go someplace else, it'll save ME time!"... And, we've never spent more than an hour to buy a car... (seriously, his prices are the best, we already have shopped around, he knows when he sees us that it's pick your car, color, and the features out of the computer I'll have it here tomorrow... no dinkering around... the other 45 minutes is shooting the breeze LOL) and you know what, he makes more money off of our loyalty because of it (between everyone in the family and business, that's about 2-3 vehicles in the average year for rotations)... The same for the cake business.

When you value your work, other people start to value it and without fail, everyone who said they would be happy to buy from you before you started charging will suddenly NEVER buy a cake from you... And it feels lonely until you realize they weren't your customers in the first place, focus on your paying customers instead.

__Jamie__ Posted 16 Jun 2009 , 7:17pm
post #29 of 45

Oh Couture and enchanted, you guys just sound so, ummmm.....right on! icon_smile.gif

apetricek Posted 16 Jun 2009 , 7:32pm
post #30 of 45

Home baked taste comes with a price!!!

First off LOVE this!!! I am also tired of explaining prices....I would never go to a restaurant and "bargain" with the wait staff, or the restaurant. I think I may do as others started to "wean out" the cheap-o's! I completely understand that not everyone wants to spend hundreds of dollars on a tiered cake, but why in god sakes do you think you should get this lavish cake for nothing. People have no idea that all of this takes me away from my family, as well as my time. Granted I am not complaining I chose to do this, just wish people would be a little more understanding, and not so freakin' cheap sometimes! I don't mind helping people work within a budget, but don't think you are getting some kind of charm city like cake for grocery store prices!
If you would have given me that price $70 for the dessert bar, I would have kissed you and ran with it!!! I think that is MORE THAN reasonable, if not CHEAP!!! I of course don't know where you are so it may be well within the "norm" of pricing. I think all that small stuff, and candy etc, is such a pain and takes so much more time, I always say I would rather decorate a 3rd tiered monster, than make 50 pieces of candy, or petit fours! LOL!!! I think it probably best that you didn't have to deal with her anyway....not worth all the time, for the little bit of money!
I too had a customer laugh at me not long ago...I started doing a 20 person minimum for all cake orders, since to do anything smaller than that isn't worth it for me to heat the oven, run around for the ingredients, supplies, etc. She said well I only need enough for 6 people, I told her well it looks like you will have extra...oh, and she is an hour away (she is a friend) and thought that I shouldn't charge a delivery fee since it was such a small cake, so I guess since it is a small cake, it won't put miles on my car, use any gas, take up any of my time. People crack me up!!!
I agree start charging more, your time is worth it! It will help you get the customers that you really want, and that will appreciate your work!

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