I have been in business for some years now, and I have arrived at a discount policy that I highly recommend to all.

NO DISCOUNTS! EVER! TO ANYONE!

It's better to do a cake for FREE than to give a discount. Here's why:

If you get so much as a nickel for the cake, the person getting the cake does not feel one smidge of gratitude. This has happened to me time and time again. Cake for a church reception for SIX HUNDRED PEOPLE, got the cost of ingredients, and was told, you could have got the eggs cheaper at this other store. A cousins wedding, was told we wanted more leftover cake than that. I could give a dozen more episodes.

Discounts never go away. Give a 25% discount on a $40 birthday cake, that's $10. Soon, you'll be doing all her cakes, always at the discount. And she will recommend you to all her friends and family, of course at the discount price.

Then, she gets engaged. Wants a $1000 cake, with all the trimmings. Did you mean to give her a $250discount?

Who gets a discount? Family only? What about your husbands sister's sister in law, is she family? She thinks so, and so does HER sister.

It gets worse. At every family event, it'll be Sandy brings the napkins, Pat brings the soda, and could yuo please brings a cake for 50 people with all the grandkids names on it? We'll pay your costs...so that's 6 hours of unpaid labor.

What about friends? Do you want to parse out who's close enough for a discount and who pays full price? Endless hurt feelings will follow.

People are grateful for a free cake. they don' ask for them repeatedly, or expect a free cake for all their friends too.

Free cake for my parents, my husband's parents. nobody else.

I do offer coupons, $5 off first order. It's a one shot deal, everyine gets how coupons work.

And I give a certificate for a free cake every year at the holidays to my good customers.

What do you think?

I agree with you,
its so hard when you give a discount, its better not to do it at all sometimes...

And so many people do not appreciate the discount.
well, I have a great friend and I gave her $30 off her cake(donald duck with RI) and I only charged her $35.00, she later said that my cakes aren't expensive and that more people should order from me( of course they want her price)...
Jodi

I agree... whole heartedly.

I couldn't agree more and welcome to CC! This place has it's good peeps and bad peeps - hope the bad peeps and they do know who they are - don't try to run you off! Sounds like you will be another good source of professional wisdom on this site.

I'm so glad that you posted this!

I'm opening soon and had planned on doing a 25% discount for family members only, but now I will rethink this.

I am a cookier so my prices for one item aren't as much as a cake, but for a few dozen it gets pricy.

Love your humor too! Thanks for sharing!

I give discounts to certain people, but I also supply an invoice with the regular cost and then deduct the discount and the reason, so they are aware of how much the regular price is. I agree that some people get greedy and stupid. But that can be for any number of reasons.

There are also some people who get a discount ONLY for the first order. I make sure they are aware of that.

Then there is the 5% credit towards your account if you recommend someone (I can't remember who told me about that here on CC) which I LOVE!!!! That is actually THE best way of being able to be recommended at the regular price.

I agree. Great post. Most people have NO idea of what is involved in making "just a cake!"

I do a monthly promotion cake for the military and that is the only discount I give.... I have to support the military!

This is a great post...thank you!

My thoughts on discounts/donations/coupons (learned the hard way)

1) I do give out coupons for free flavor upgrades (like my carrot cake) that expire 6 months after the order to good customers or new customers who were good to work with. They can be transferred (= free advertising for me).

2) When I get a really nice new customer, I mention that I do a planned donation of $XXX in baked goods to each area school disctrict (NOT each school) one time per year. They are welcome to schedule their donation 4 months ahead of time.

3) I do a few free wedding cakes each year, to someone I think might need it...just a family with hard times, illness, etc. Going in, they believe they are paying for it, so it keeps things under control. At the end, I total it up, smile, and then mark "Compliments of XXXX."

I learned to manage my donations after realizing I was not "doing good" (which is important to me, and something I enjoy about my small business), but actually only subsidizing the lifestyles of folks who could very well pay for my work when I was doing all sorts of discounts.

you really got it right. Take it from someone that does lots of free cakes, or ingredients paid cakes. It is so amazing like you said, people will deligate what people bring, simple things theycan pick up at the store. Then they turn to you and say and you can bring one of your amazing cakes. Flattering you into doing it. And they say and we know you will do something special. Another example, a friend helped us with our taxes, there was a mistake and we had major penalties, she helped us, simple fix, and in the end they owed us money. Well anyway we wanted to pay her, she wouldn't accept, she said its a friendship thing. So then I tell her that I will do any celebration cake(wedding, anniversary baby shower," for her for free, she thought that was a great idea. Then my husband says, we need to do more than that, my own husband says this. He knows how much work it can be. Something that probably took her an hour to sort out, was worth more than all of the time it takes me to make a cake. So even my sweet husband doesn't get it.

I will tell you this I'm tired of giving cake away! that said I will tell you what I do, my niece and nephews get free cakes, and they live in Dallas,
a sweet girl my mom nannies who she very close to, I make her a free cake. I know her parents can afford me, but I do it cause I love her and she means a lot to us. I always pick the design and if times are hard I make an amazing sheet cake!
I don't do discounts and plan soon with email marketing putting a coupon with 25% of any order of $50 or more.
6 month coupon.

I agree is easier for ppl to ask for designated discount, but not for their free cake, I also think that we should donate to the needy, not to ppl that just want a bargain. cause what they want is a high end cake at low prices, everyday..., for that you can go to Walmart.

Thank you

Amen sista!!! (high five!)

My husband worked in banking and once in awhile, he'd waive a fee for an overdrawn check or something else that WASN'T a bank error. He observed that not only does the customer NOT appreciate the big favor he did for them, but they expect it every single time after that. They think they can bounce checks all over town and he should waive every single fee "....because you did last time!"

Father-in-law ran a business for 60 years and he said the same thing.

I give an active military discount (Mom of a Purple Heart Marine here).
I give 5% referral credit.
I give nieces/nephews the wedding cake as a gift IF THEY WANT IT. I also have a stipulation that if I start getting a bridezilla attitude, then they get an invoice!

But i'm not making my daughter eat cereal with no milk because I gave her milk money to somebody for their kids' birthday cake.

Nchanted1, I just commented on another of your posts that I really liked. I think you're going to be a great asset on this site!

Nchanted 1 ....well spoken and written!

AMEN!! Its great to know that i'm not alone!! The other day, someone ordered a cake from me and she obviously did not want to pay my price...so she tried to bargain in many ways...one of the things she said was that she loves my work and only wants me to make her cake but she just wants a "simple" one and she then asked me to think of a good price for a simple cake for her. And mind you...by simple they only mean they want the price to be simple...not the design of the cake.
I sure took the order, gave her a 50% discount but cut down on the decorations also by 50%! You get what you're willing to pay for.
If you can't afford it, its different but to bargain just for the sake of bargaining.....tsk tsk!

My husband has said NO MORE DISCOUNTS!!! I LOVE that man!!! I have been burned by the discount go around. Never fails, you do an elaborate sculpted cake for a friend at a mind boggling discount because you love them and want to bless them and then someone at the event falls in love with the cake, asks who made it and .....you guessed it...asks how much it cost. Then you wind up looking like the big lots of custom cakes.

I actually had to break it to the pastor of one friends church that the cake she loved and wanted for her grown son was double what I had charged for it. I wound up feeling like a heal after doing what I thought was something nice for someone.

I occasionally will charge my brother less for a cake than I would other people, but that is because he does a lot of favors for me and he totally respects the time and effort that goes into the cakes.

Other than that no discounts. I either do free cakes or paid cakes. If you ask me for a cake, you pay, full price. If I offer to do a cake, it is free. And the free cake is my design and the size I decide on. I won't offer a free cake with a 20 serving cake in mind and get roped in to doing a 3 tier 100 serving cake for nothing.

The only discounts I offer are for active military/law enforcement, and then a 5% referral discount. I usually do free cakes for the deployed soldiers in my dh's unit for their families back home. I usually don't do free wedding cakes, but two of our close friends are getting married and I'm doing their cakes as our gifts to them. I don't have to worry about family getting cakes from me because they never do! Let them go buy their cheapo grocery store cakes instead of coming to a family member who makes them! LOL

I agree 100%...even my husband pays full price for a cake to take to work. Free cake sometimes...I donate a cake gift certificate occasionally to Girl Scouts for their annual auction, or for some other charitable cause. I tried the charging-for-ingredients route in the past, but that always seemed to bite me in the butt somehow.

If I offer a cake, it's free...but if you ask for a cake, you pay full price. Period.

Glad to have you here Nchanted1. You have a good head on your shoulders.

I'm still a hobby baker, trying out new things and improving my skills before I get licensed etc. I find posts like this invaluable since they give a realistic picture of the cake business and keep me from making mistakes later on in the game. Keep the advice coming!

If I started making free cake for every family event I would go bankrupt. I have a massive family and so does my husband. We can't even have events for everyone at home anymore since the amount of family, or people who consider themselves family, would easily fill some medium sized wedding halls to the brim.

I think the active military discounts are a great thing and that regular customers would not dare to say something like "but the people in the military get five% why not me?".

For some reason, this topic has been running through the back of mind constantly. Not sure why, but I have come to a realization. I have been deliberating about whether or not to give a discount on an order by my pediatricians wife. Their DS is also in the same preschool as my kids. And then I realized.....they don't give ME a discount when I bring my kids there. So why should I? Business is business.

There are some businesses that give a one time discount or coupon for orders, but otherwise that is it. There is no discount for being a coworker....if you are an employee, then yes one can get a discount....but that is it.

If I am a hobbyist, then I can discount. If I am a business, then I must run it like a business.