Pricing Problem

Business By saberger Updated 20 Jun 2009 , 2:10pm by saberger

saberger Posted 16 Jun 2009 , 8:39pm
post #1 of 33

Why am I having such a problem with pricing?! It should be relatively simple, right? Figure out expenses then add profit and voila!

I got cake boss and entered everything. I want to be real business-like for this. I had come up with pricing that I thought was fair, esp. for around here. Standard BC wedding serving start at $5.50; starts at $7 for fondant. Gourmet fillings and flavors were higher.

Okay, right? Then I had an incident about pricing a wedding cake versus a regular celebration cake (prices average out to @ $3/serving). And I came full circle in my thing that cake is cake...doesn't matter the occasion. It should all start at one price.

Now having said that, I lowered the wedding price so ALL cakes start at $2.50/serving; $3.50 for gourmet flavors; $4.50 for fondant.

Here is where I can't wrap my brain around this. I have an order for 12 servings, gourmet flavor, gourmet filling, SMBC (standard), and chocolate transfers. Based on my pricing it ends up being $54 for a 6" square cake. That seems absurd to me! So overpriced! I would NEVER spend that much for a simple 6" square cake. So how can I expect others to do the same? She was fine with the cost, didn't even bat an eyelash, but I keep looking at this tiny cake and shaking my head - I feel like I am ripping her off.

What is my problem? What am I doing wrong? I don't want to under price myself, but I don't want to be ridiculously over either.

Local competition starts at $5.50 for wedding and has flat starting rate for celebration cakes (@ $2.50 - $3/serving).

32 replies
mixinvixen Posted 16 Jun 2009 , 8:48pm
post #2 of 33

you acknowledge that things are higher than normal in your area, but yet you're underpricing your competition by over a $1...why?

it does not matter that YOU wouldn't pay that. my husband openly admits he wouldn't pay what i charge, because he freakin squeaks when he walks, but he also doesn't deny the fact that my work is worth actually MORE than i sometimes charge.

WHAT DOES MATTER IS WHAT OTHERS WILL PAY FOR YOUR TALENT, AND FOR THE SIMPLE FACT THAT THEY CAN'T DO IT THEMSELVES OR DON'T HAVE TIME...THAT'S WORTH ALOT, BY ITSELF!!!!!

sillywabbitz Posted 16 Jun 2009 , 8:51pm
post #3 of 33

What would your cost have been if it had not been gourmet flavor and filling and no chocolate transfers?

Here is why I ask. If you think a regular BC simple cake should be say $30 then you add the chocolate transfer for me that would be a minimum of an extra $5 plus the gourment fillings and flaovrs, also an extra $5 I'm already up to $40 and I have no idea what your flavors etc cost you.

Using your $3.50 a serving for gourmet flavors without the chocolate transfer the cake should have been $42 so with the chocolate transfer I can easily see getting to $50 ...

and by the way..if she's willing to pay never apologize for your price...actually even when they're not willing to pay ...never apologize for your prices...you have to make your profit to stay in business.

Good luck!

brincess_b Posted 16 Jun 2009 , 8:59pm
post #4 of 33

you dont want to pay that price for a cake - thats why you make them. your customers do not want to make them, thats why they pay you a fair price.

is that a lot of money for a 6 inch cake? maybe so, if it was basic bc. then you have the extra gourmet charges, and the extra detailing. so sounds fair enough to me.
xx

saberger Posted 16 Jun 2009 , 9:02pm
post #5 of 33

I know I have to make a profit and I never apologize for my prices to the customer. But I am trying to reason this out in my head and feel comfortable with it all.

mixinvixen - I am not trying to undercharge. My competition doesn't do fondant work and she charges higher just for weddings (which I don't understand WHY it should be higher). If I have an order for two tiers (any event), then that is an added expense for supports and stuff. And then add time for complex designs. So, I have raised my base price and lowered my wedding to average it all out. Didn't I?

mixinvixen Posted 16 Jun 2009 , 9:13pm
post #6 of 33

maybe i'm being somewhat dense here, highly likely i admit icon_biggrin.gif , but it seems to me like you're making my point for me. you're lower than the competition, yet you offer more than she does, ie no fondant option

kelleym Posted 16 Jun 2009 , 10:56pm
post #7 of 33

The smaller your item, the higher your overhead. It's going to take you roughly the same amount of time to shop, mix, bake, cool, make icing/filling for a 6" cake as it would an 8" or 9". That is why the price looks so high for such a small cake.

That is why many people set a minimum order price or size. For instance, no orders under $50 (if you want to order a 6" round, that's your business, but you're still going to pay $50) - or you could just set a minimum order size of 8" round or 8" square. (which also works out to be a minimum price, it's all semantics, but you get my drift). icon_smile.gif

Nchanted1 Posted 16 Jun 2009 , 11:03pm
post #8 of 33

You are suffering from a common ailment of females---the undervalueing of our worth. Ever hear the phrase "anonymous was a woman"? We are taught from an early age that our gifts and accomplishments aren't that important. We, as women, are here only to serve. Never boast if you're the best, never claim the prize, be humble and QUIET.

Is your cake delicious? Pretty? Do you approach it like a craftsman, not just throwing it together? Do you try your best to make it better than the last cake you did? Do you put your heart into it?

They why on earth isn't it worth the price the customer is happy to pay? She couldn't make it that well...Why isn't it worth what other bakers in your area charge?

Ask yourself honestly, would a man question himself like this? Not likely! he'd be out there procaliming his value to the world. the Food Network has a show with Duff, now Buddy Valasquo. Both terrific cakers. But, why no women? Because they both stand up for themselves, and present their work with pride. no second guessing for them. we should all follow their lead, and charge what we are worth. It'll be uncomfortable at first, but believe me, you'll get used to it.

If we women believed in ourselves as much as God intended, we'd be running the world, and it would be a much better place! So start small, believe in your talent, your hard work, and your cakes.

CakeDiva73 Posted 16 Jun 2009 , 11:11pm
post #9 of 33

I have set prices for single layer cakes depending on their size and shape and then all stacked/tiered cakes are priced by the serving. This method has been working great for me - then you don't have different prices for the "wedding" cake, etc.

I am simply unable to charge $3 per serving for regular birthday cake and get anyone to pay it. I absolutely agree that cake is cake but I kind of wanted to work a little bit icon_smile.gif so I had to make some adjustments. If they want 3 individual round cakes iced in white so they can stack them on a floating tier or something, then they can get the cake for cheaper. This doesn't bother me since stacking and tiering cakes is more labor intensive.

As for premuim flavors, I charge .25 extra per serving if they choose the higher end flavors. I really hate the idea that I am nickel and diming a bride so I am not always crazy about this method but I am afraid I won't get as much business if I raise my prices across the board and then do whatever they want at no additional charge. I think if I were more established in the community it would be different but I only just became licensed so I am just now able to advertise, lol.

It's kind of a crazy thing since we want to charge enough to get business but not to undercut everyone or then we are doing work for way too cheap. When you're starting out, you don't want to charge too much but the last think you want to do is come up with a price list, establish clients and then jack up the price.......

saberger Posted 16 Jun 2009 , 11:14pm
post #10 of 33
Quote:
Originally Posted by Nchanted1

You are suffering from a common ailment of females---the undervalueing of our worth. Ever hear the phrase "anonymous was a woman"? We are taught from an early age that our gifts and accomplishments aren't that important. We, as women, are here only to serve. Never boast if you're the best, never claim the prize, be humble and QUIET.




That is TOTALLY NOT me! icon_cool.gif Not that I go around boasting or anything like that. Not my personality. Probably because my mom never shut up and was always out to prove to the world that she was worth something and because she did it in such a rude and obnoxious way, I vow to never be that way. Coming from a classical music background, I have experience with knowing my self worth.

I think that when it comes to cakes, I grew up with the store bought cake and never baked at home. As I got older, all I knew was the price of a box mix and a store bought cake, esp. BJ's and Costco. I was used to those prices. I knew that a wedding cake could get pricey, but since I never had a fancy wedding, I didn't experience it. I think THAT is why I can't wrap my head around this.

If you guys say that I am doing the right thing and figuring it out correctly, I will take your word. That is my main concern, I guess. I am really trying to be all business about this and not be so insecure about it.

Thanks ya'll thumbs_up.gif

indydebi Posted 16 Jun 2009 , 11:33pm
post #11 of 33
Quote:
Originally Posted by Nchanted1

You are suffering from a common ailment of females---the undervalueing of our worth. Ever hear the phrase "anonymous was a woman"? We are taught from an early age that our gifts and accomplishments aren't that important. We, as women, are here only to serve. Never boast if you're the best, never claim the prize, be humble and QUIET.

Is your cake delicious? Pretty? Do you approach it like a craftsman, not just throwing it together? Do you try your best to make it better than the last cake you did? Do you put your heart into it?

They why on earth isn't it worth the price the customer is happy to pay? She couldn't make it that well...Why isn't it worth what other bakers in your area charge?

Ask yourself honestly, would a man question himself like this? Not likely! he'd be out there procaliming his value to the world. the Food Network has a show with Duff, now Buddy Valasquo. Both terrific cakers. But, why no women? Because they both stand up for themselves, and present their work with pride. no second guessing for them. we should all follow their lead, and charge what we are worth. It'll be uncomfortable at first, but believe me, you'll get used to it.

If we women believed in ourselves as much as God intended, we'd be running the world, and it would be a much better place! So start small, believe in your talent, your hard work, and your cakes.




I LUV YOU!!!!!!!!!!!! PLEASE tell me you live close to me so we can meet!

kandu001 Posted 18 Jun 2009 , 9:21pm
post #12 of 33

Wow! <clapping sounds> icon_smile.gif

itsacake Posted 18 Jun 2009 , 10:50pm
post #13 of 33

One more thing to think about..., if you go by Wilton, which seems to be the industry standard, a 6" square is 18 servings, so if you were to go by that , at $54.00 you are only charging $3.00/serving. Since you are figuring 12 servings your cost is the $4.50 you are aiming for.

However, if you are comparing your servings to your competition's servings, do you know you are comparing the same amount of cake? If your servings are larger, you are not just $1.00 under them, you are even less. In other words, you are charging $54.00. Are they charging $66.00, which is not too bad a difference, or are they charging $99.00, which is huge?

__Jamie__ Posted 18 Jun 2009 , 11:18pm
post #14 of 33

Not absurd to me. I sold that 6" pink quilted cake in my pics for $75. It was lemon curd filled, SMBC, Satin Ice fondant, and nice cake board.

Kitagrl Posted 18 Jun 2009 , 11:26pm
post #15 of 33

I've found myself feeling like I was ripping a customer off too! But other times I feel like I undercharge. Just depends on design. I think part of it is whether or not we like the cake personally, and of course I would never pay "my prices" for cake! (I would just figure out how to do it myself, if I didn't know! haha)

I also do all my cake pricing the same no matter what event...I think that is part of the thing too, people do expect weddings to be more than parties but to me, its all cake, and its all work/art....it should all be priced the same.

That even goes to sheet cakes...which I have been starting to encourage people to go elsewhere for sheets unless it is underneath a 3D cake (in which case I do give a discount as its usually plainly iced for the most part) because then again I still charge my minimum of $3/serving for buttercream (thats plain with a ribbon...with decoration, buttercream cakes start at $4/serving) and that adds up fast for sheet cakes that people are used to paying grocery store prices for.

saberger Posted 19 Jun 2009 , 12:22am
post #16 of 33

itsacake: I don't remember who it was that told me that she uses the wilton party servings as her standard....which is what I am going to use as well. So, the 6" ends up serving 12 - which turned out to be the exact # the customer wanted. My competition doesn't do square cakes - except for some weddings I believe.

_Jamie_: what a cute cake. Very precious. I can understand a higher price for fondant. I agree with that.

I actually finished he cake tonight, but the lighting isn't really good, so I have to wait until tomorrow to take pics. Maybe then you can tell me if you think it ended up worth the $ in looks.

Kitagrl: I have definitely under priced myself, which is why I have been working on not doing that. Probably why it feels so strange. I used to only charge $2/serving for BC and $3 for fondant. I wouldn't even KNOW how to figure out costs for carved cakes!

itsacake Posted 19 Jun 2009 , 12:58am
post #17 of 33

OK. Sorry. You must be using the Wilton party chart. Since I don't price differently for weddings and anything else, I only use the wedding chart, which says a 6 inch round is 12 and a square is 18

I keep being afraid with the Wilton wedding chart that there won't be enough cake (because that is what Earlene said) but people always tell me they had leftovers, so I guess we eat smaller pieces here in California than they do in Texas icon_lol.gif

DeeDelightful Posted 19 Jun 2009 , 1:08am
post #18 of 33
Quote:
Originally Posted by Nchanted1

You are suffering from a common ailment of females---the undervalueing of our worth. Ever hear the phrase "anonymous was a woman"? We are taught from an early age that our gifts and accomplishments aren't that important. We, as women, are here only to serve. Never boast if you're the best, never claim the prize, be humble and QUIET.

Is your cake delicious? Pretty? Do you approach it like a craftsman, not just throwing it together? Do you try your best to make it better than the last cake you did? Do you put your heart into it?

They why on earth isn't it worth the price the customer is happy to pay? She couldn't make it that well...Why isn't it worth what other bakers in your area charge?

Ask yourself honestly, would a man question himself like this? Not likely! he'd be out there procaliming his value to the world. the Food Network has a show with Duff, now Buddy Valasquo. Both terrific cakers. But, why no women? Because they both stand up for themselves, and present their work with pride. no second guessing for them. we should all follow their lead, and charge what we are worth. It'll be uncomfortable at first, but believe me, you'll get used to it.

If we women believed in ourselves as much as God intended, we'd be running the world, and it would be a much better place! So start small, believe in your talent, your hard work, and your cakes.




I agree! I heard Suze Orman, the financial guru say pretty much the same thing on her show. We will trade our talents for something not even worth the same amount or something we don't even want, just to make someone else happy. When WE bakers/decorators become serious about our prices, people WILL begin to pay with no questions asked. Who complains about having to pay a plumber or mechanic? Aren't they expensive, too?

itsacake Posted 19 Jun 2009 , 2:25am
post #19 of 33

I totally agree with Nchanted!.

However, I'm not sure about DeeDelightful's comparison. Although we "NEED" our hot water and the car to run, which makes the plumber and mechanic pretty unavoidable, no one really NEEDS high end cake. Great status symbol, but, face it, Costco actually makes a pretty good, cost effective, dessert. All those thousands of people buying it, prove it icon_biggrin.gif

And I say that as I attempt to become one of the most expensive designers around icon_evil.gif

saberger Posted 19 Jun 2009 , 2:33am
post #20 of 33
Quote:
Originally Posted by itsacake

And I say that as I attempt to become one of the most expensive designers around icon_evil.gif




Too funny!! I am right there with ya! thumbs_up.gif

nikki72905 Posted 19 Jun 2009 , 2:48am
post #21 of 33

WOW! This thread is awesome! I am not ready to charge for my cakes yet, as I am not legal, and will eventually be moving to another area.... However, those prices people would lose sleep over here, they would never pay that much -- I wish they would!! But people here want something for nothing..... Anyway that being said, I had a friend offer me 90.00 for the cake that I made witht he monkey on top in my pictures... that was a wonderful feeling... The cake with the star wars picture, the women told me that I should be in business... I would love that and hopefully someday we (my husband and I) will have a bakery/bistro that we will be able to have specialty cakes etc.

indydebi Posted 19 Jun 2009 , 2:56am
post #22 of 33
Quote:
Originally Posted by nikki72905

.... However, those prices people would lose sleep over here, they would never pay that much --



Never assume that. Do people drive Cadillacs in your area? Do they own designers clothes/purses? Do they own horses, 4WD trucks and ATV's? Are there really nice houses in your area or does everyone live in a 2-room shack?

Just because you don't yet know the people who would pay it, don't assume they dont' exist.

When I first came to CC, I was shocked at the prices people were getting for a cake. But I didnt' take the wring-hands-and-fret-over-it attitude of "oh my goodness, no one will EVER pay ME that much for a cake!" Not me, man! I said, "If THEY can get it .... *I* can get it!"

And I do. thumbs_up.gif

nikki72905 Posted 19 Jun 2009 , 11:34am
post #23 of 33

Good Advice! I know what your talking about though, I used to run a Photography studio that was located in Kmart - I have countless stories that prove that fact. I know these things yet I don't apply them in my life -- HMMM?

I am trying to change a lot of things in my life, I think it's time I start rethinking a lot in my life!

saberger Posted 19 Jun 2009 , 11:56am
post #24 of 33

indydebi......I just love your "go get them" attitude. No BS, just plain facts. Its great!!!

saberger Posted 19 Jun 2009 , 4:45pm
post #25 of 33
CakeForte Posted 19 Jun 2009 , 5:12pm
post #26 of 33

To me- it looks in the $100-150 range. I haven't done the buttercream transfers before, so I don't know how long it took you to do those, but that would be the determining factor. That is a really cute cake!

saberger Posted 19 Jun 2009 , 5:56pm
post #27 of 33

Thanks CakeForte. It doesn't take me too long to do them. I basically spend a couple of hours making a whole bunch since I don't want to waste the choc. and it is hard to reheat them in the bag with out them turning white-ish. So, I made the golf ones as well as the flowers for the other cake in my gallery AND another bigger cake with flowers. I experiment with different designs and then use those on other things if I like how they turned out.

DeeDelightful Posted 19 Jun 2009 , 7:09pm
post #28 of 33

REALLY cute cake. I agree with the $100-$150 price range.

saberger Posted 19 Jun 2009 , 8:09pm
post #29 of 33

Wow! Never would have thought THAT. She came to get the cake and thought I had said $64, rather than the $54 I quoted. She was ready to pay it without a second thought!! She seemed SO surprised at the lower price. Go figure.

Tracye Posted 20 Jun 2009 , 5:22am
post #30 of 33

That is ADORABLE! You did a really awesome job and should be proud. And stop worrying about your prices. Looks to me like your customers are really getting a bargain.

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