85 Cents A Slice!!!!

Business By ajjhmf Updated 29 Jul 2009 , 3:32am by Shelle_75

ajjhmf Posted 22 Jul 2009 , 5:26pm
post #1 of 52

I just did a friends daughter's party and did a 9x13. People loved the cake and are asking who did it, so I figured up my pricing in case I get some orders. (It's the pool cake in my pics) Anyway, I was thinking a base price of $50 for a simple single layer sheet with butter cream with additional depending upon the decorations. The one I did for my friend, I'm thinking would be around $85 because of the fondant figures.

However, in my neighborhood there is a cake lady almost everyone from our school uses for birthdays. She does sheet cakes with frozen butter cream transfers and charges $38 for a 9x13. That's less than a dollar a slice with the transfer. I can't compete with that cost wise and it's really not worth my time to do a cake for that little.

Aside from her price being ridiculous IMHO, how should I go about convincing potential clients that my cakes are worth the extra?

Or should I just scrap the sheet cake idea and stick to my starting price of $2.50 a serving pricing for a simple 2 layer butter cream cake that goes up from there?

51 replies
__Jamie__ Posted 22 Jul 2009 , 5:36pm
post #2 of 52

I would scrap sheet cakes. Who wants to compete with prices like that> Do tiered and custom carved. A much more profitable market. And that isn't a negative against anyone that does sheetcakes, before someone goes and gets all hissy about it. I have seen plenty of nice sheetcakes in my life. icon_biggrin.gif

Mike1394 Posted 22 Jul 2009 , 5:51pm
post #3 of 52

There are people that buy Mercedes. There are people that buy Pintos. The key to business is finding your niche in the marketplace, and making it work to your advantage.

Mike

LaBellaFlor Posted 22 Jul 2009 , 7:58pm
post #4 of 52
Quote:
Originally Posted by Mike1394

There are people that buy Mercedes. There are people that buy Pintos. The key to business is finding your niche in the marketplace, and making it work to your advantage.

Mike



I TOTALLY agree. thumbs_up.gif YOUR clients are there regardless of pricing. icon_wink.gif

cakemaker30 Posted 22 Jul 2009 , 7:59pm
post #5 of 52

I have my single layer 9x13 sheet cake serving 24-28. 2"x2" pieces since they are only 2" tall. That would make her cake $1.50 per serving which is right about what I would charge for a single layer cake. I'm in Ohio too. I hope you aren't talking about me icon_biggrin.gif LOL

QueenOfSweets Posted 22 Jul 2009 , 8:22pm
post #6 of 52

I was recently visiting with a woman from my hometown who has been decorating cakes for 40+ years. My hometown is about 900 people and out in the middle of nowhere - the closest town with over 25,000 people is 60 miles away. She does only Crisco-based buttercream icing and straight-from-the-box cake mixes. Her pricing is the same regardless of the design. She charges $17.50 for a 9x13 sheet cake, an 11x15 is $19.50 and a 12x18 is $22.50. She does wedding cakes also, and they're a flat $75 per 100 servings no matter what the design. I about fell over when she told me her pricing. That's a range of $0.41 to $0.75 per serving!!!! icon_eek.gif There's no way I'd turn my oven on for that!

__Jamie__ Posted 22 Jul 2009 , 9:18pm
post #7 of 52
Quote:
Originally Posted by QueenOfSweets

She does wedding cakes also, and they're a flat $75 per 100 servings no matter what the design. I about fell over when she told me her pricing. That's a range of $0.41 to $0.75 per serving!!!! icon_eek.gif There's no way I'd turn my oven on for that!




That's just wrong. It honestly makes me question what they are getting out of it? How are they profiting? How are they NOT losing money? Do they ever look at their electric bill? Gas? Supplies? I mean, if they look like a $15 cake, then ok, that answers my question. But I have seen some really nice cakes out there that are just being given away. Makes me wanna smack the dodo who sold it. icon_razz.gif

blue123 Posted 22 Jul 2009 , 9:24pm
post #8 of 52
Quote:
Originally Posted by Mike1394

There are people that buy Mercedes. There are people that buy Pintos. The key to business is finding your niche in the marketplace, and making it work to your advantage.

Mike


''

How old are we that we remember Pintos!! LOL!!! That was our first family car! Pintos rule!

Mike1394 Posted 22 Jul 2009 , 9:31pm
post #9 of 52
Quote:
Originally Posted by blue123

Quote:
Originally Posted by Mike1394

There are people that buy Mercedes. There are people that buy Pintos. The key to business is finding your niche in the marketplace, and making it work to your advantage.

Mike

''

How old are we that we remember Pintos!! LOL!!! That was our first family car! Pintos rule!




LOLOL I used to have a '74 Pinto. That car wouldn't die for anything LOLOL

Mike

indydebi Posted 22 Jul 2009 , 10:04pm
post #10 of 52
Quote:
Originally Posted by __Jamie__

Quote:
Originally Posted by QueenOfSweets

She does wedding cakes also, and they're a flat $75 per 100 servings no matter what the design. I about fell over when she told me her pricing. That's a range of $0.41 to $0.75 per serving!!!! icon_eek.gif There's no way I'd turn my oven on for that!



That's just wrong. It honestly makes me question what they are getting out of it? How are they profiting? How are they NOT losing money? Do they ever look at their electric bill? Gas? Supplies? I mean, if they look like a $15 cake, then ok, that answers my question. But I have seen some really nice cakes out there that are just being given away. Makes me wanna smack the dodo who sold it. icon_razz.gif




I knew a lady like that years ago. She bought her supplies out of her husband's wallet, but when she got paid for the cake, it all went into HER wallet. So in her eyes, she was making "good money". icon_confused.gif

My cousin who sells real estate told me that dealing with older people was his biggest challenge because they had no idea what the true value of their house was. If they bought it 40 years ago for $20,000, they figured if they got $40,000 for it, they were doing great! He had the hardest time coinvincing them that the house was worth $100,000! Maybe she's like that .... her pricing memory is back in 1970 and she thinks $19.50 is a LOT for a cake she used to pay $5 for.

__Jamie__ Posted 22 Jul 2009 , 10:10pm
post #11 of 52

Oh wow! So that's what I need to do to make 100% profit, I get it! Geez, what a dumb dumb I've been!

Malakin Posted 22 Jul 2009 , 10:55pm
post #12 of 52

Everyone in this area wants all their cakes for Walmart or Kroger prices. Not gonna happen. I send them there if they ask for sheet cakes. I'm not even partial to doing them. I get bored.

jlynnw Posted 22 Jul 2009 , 11:47pm
post #13 of 52

We have the same little old lady at church that charges along the same. We were talking about it as I am renting the church kitchen for a legal place to bake. She charges so little as this is a good past time for her and she does not want to be the charity case baker icon_confused.gif . She only gets what she puts into it, the love a doing her hobby, and happy folks. Is it fair to people trying to make a legal go of it, no. I guess that is the price for free enterprise in a free country. There will always be someone to break the laws, someone to undercharge and some who choose to go to WalMart.

You can make a go of it with a quality product and upstanding customer service. Give them what they can't find elsewhere. When they find you have a great product for the unusual, they will come back for the ordinary just for the product, service, and customer care. Best Wishes

candoo Posted 23 Jul 2009 , 3:28am
post #14 of 52

My prices are cheap like that ($30 for an 8" round, $35 for a 9x13, and slowly up from there for my tiered cakes) b/c I try to make them affordable to the small town customers around me, and b/c I'm scared that they may not think my work is good enough to pay more since I've only been doing this a couple of months. I intend to go up once my customer base is established, but in my area, I don't feel that I can increase by a whole lot...

thecarouselcloset Posted 23 Jul 2009 , 3:54am
post #15 of 52

I was wondering the same thing, I think i'm the one everyone is talking about, lol, because i'm just starting out and trying to build a portfolio I am doing my cakes pretty cheap(from my prospective). Plus I'm gaining experience as I go. I wont always charge these prices and I have made that clear to my customers, as well as the price they would pay from another person so they realize how cheap they are getting the cake for.



I was also wondering how everyone is doing with the economy, is it reasonable to lower prices?

__Jamie__ Posted 23 Jul 2009 , 4:13am
post #16 of 52

I would never lower my prices. I do run a summer discount, but it's only because I like to do a little something special at least one time during the year. Are the prices on the eggs and butter and milk you buy going down? Are you getting a break on the electric bill because the economy is bad? Look, whether this sounds nice or not, there are people who couldn't care less about the economy. They want something, they get it. Those are my favorite people. But then again, I don't market to the masses. But really, consider what you are getting a break on as far as supplies go before you offer cheaper cakes. And don't devalue your time. icon_smile.gif

Unlimited Posted 23 Jul 2009 , 4:56am
post #17 of 52
Quote:
Originally Posted by thecarouselcloset

I was also wondering how everyone is doing with the economy, is it reasonable to lower prices?




I don't believe this economy warrants a reason to lower cake prices. The economy was worse in the early '80s than it is now and cake prices held their own during that time and continued to increase at a normal rate mid-'80s.

I've noticed that wedding cake prices have typically increased around the same time within each decade, if you'd agree...
early '80s = $1.
early '90s = $2.50
early '00s = $4.
early '09 = $5.50 (+/- so far)

Mensch Posted 23 Jul 2009 , 5:04am
post #18 of 52

85 cents? My ingredients cost more than that per portion.

That's like paying people to order my cake.

tinygoose Posted 23 Jul 2009 , 7:25am
post #19 of 52

How bout this?
Hire her to produce all your cakes. She'll be so busy she won't have time to take other orders, you do a 136% markup and sell them for $2.00 a slice and you've made a tidy profit, and didn't have to turn on your oven.

KawaiiCakeCook Posted 23 Jul 2009 , 12:19pm
post #20 of 52

Oh sweetheart, your cakes are adorable little works of art. Let them know THAT. Stick to your higher prices, I learned real quick I'd rather do one cake for $100 than 3 for $30. Clients who want the fabulous and unique will find you!

indydebi Posted 23 Jul 2009 , 12:24pm
post #21 of 52
Quote:
Originally Posted by candoo

...I try to make them affordable to the small town customers around me, and b/c I'm scared that they may not think my work is good enough to pay more .....




First, can we please stop spreading the rumor that I'm rich because I live in a big city and everyone who doesn't live in a big city is poor and lives in rusted out trailer parks? My sister lives in a one-intersection "small town" and makes 4 times the money I do ... and so do her neighbors. Minimum wage in the big city is the same as minimum wage in small towns. I just don't buy that excuse. And I've lived 3/4's of my life in small towns so I know what it's like.

Second ..... you're "scared" they won't think your work is good enough? Stop it. Stop it right now. As long as you're willing to give your work away, there will be people who are willing to take it. If I find a pair of shoes for $10, I'm not going to tell the clerk, "Oh, no! Let me give you $25 for them because they are so pretty!"

What are you "scared" of? That someone won't let you make a cake for them that costs you money? That you will lose the opportunity to be taken for granted?

I never see men in business having these problems.

cakemaker30 Posted 23 Jul 2009 , 12:29pm
post #22 of 52
Quote:
Originally Posted by Unlimited

Quote:
Originally Posted by thecarouselcloset

I was also wondering how everyone is doing with the economy, is it reasonable to lower prices?



I don't believe this economy warrants a reason to lower cake prices. The economy was worse in the early '80s than it is now and cake prices held their own during that time and continued to increase at a normal rate mid-'80s.

I've noticed that wedding cake prices have typically increased around the same time within each decade, if you'd agree...
early '80s = $1.
early '90s = $2.50
early '00s = $4.
early '09 = $5.50 (+/- so far)




This depends on your area too. I'm in Ohio and there's no way anyone around here would pay $2.50 per serving for a single layer sheet cake. I run a legal home based bakery and the bakeries with storefronts that are in my immediate area start their wedding cakes at $2.50 - $2.75 per serving. I start my tier cakes at $2.50 per serving as well so I'm not undercutting anyone, but I would have a hard time explaining charging the same price for a single layer sheet cake as I charge for a torted tiered wedding cakeicon_smile.gif I'm not trying to argue what anyone's cake is worth so please don't think that. I just wanted to put it out there that not all areas are the same. I've done the research in my area and I don't think I could ever make it charging that much icon_biggrin.gif

yellobutterfly Posted 23 Jul 2009 , 1:11pm
post #23 of 52
Quote:
Originally Posted by indydebi

Quote:
Originally Posted by candoo

...I try to make them affordable to the small town customers around me, and b/c I'm scared that they may not think my work is good enough to pay more .....



First, can we please stop spreading the rumor that I'm rich because I live in a big city and everyone who doesn't live in a big city is poor and lives in rusted out trailer parks? My sister lives in a one-intersection "small town" and makes 4 times the money I do ... and so do her neighbors. Minimum wage in the big city is the same as minimum wage in small towns. I just don't buy that excuse. And I've lived 3/4's of my life in small towns so I know what it's like.

Second ..... you're "scared" they won't think your work is good enough? Stop it. Stop it right now. As long as you're willing to give your work away, there will be people who are willing to take it. If I find a pair of shoes for $10, I'm not going to tell the clerk, "Oh, no! Let me give you $25 for them because they are so pretty!"

What are you "scared" of? That someone won't let you make a cake for them that costs you money? That you will lose the opportunity to be taken for granted?

I never see men in business having these problems.




Totally agreee w/debi!
Also, if you set your prices low, no matter how determined you are, it will be REALLY hard to raise them in a year or two once you've decided you're worth it...that's what I'm dealing with now, when you have customers that are used to getting them for a certain price, then having to double your rates to make it worth your time, ingredients, etc...

As a woman I definitely struggle with this, and "feeling bad" for charging more...it's harder on me than it is on the customers, honestly - the other day I told a lady that I had to raise my rates, because (she finished my sentence for me!) "you weren't making very much after all the time involved, right?"

notjustcakes Posted 23 Jul 2009 , 1:12pm
post #24 of 52

I do cupcakes and carved cakes mostly and they are of the sort that aren't available here. I live in an area of the city where people are hmmmm... well, let's just say love to spend their money and looking to have something unique and different...(we live in a very modest home and are not well off). These ladies think nothing of spending $120 on 36 cupcakes for their little princesses...but they cannot get these anywhere in the city..that is where the niche is for me.
Having said that, when I get referrals and those potential customers here my prices, they many many times balk...I will not do a 1/4 sheet cake for less than $60. I can't...by the time I cover butter, cream eggs, sugar.....forget about it!! go to costco....

Wonderchic Posted 23 Jul 2009 , 1:59pm
post #25 of 52

I tend to make cakes as gifts.
Everyone RAVES about my cakes! Everyone LOVES them! Someone (who wouldn't know the cake was a gift) has an event or birthday coming up. How much do I charge? $1.00 per serving for basic buttercream. NEVER have I gotten an order after that!
I've been to events for which I was told previously that they wanted me to do the cake & sitting there is a cake in a Walmart or Meijer bakery box.
icon_sad.gificon_redface.gificon_sad.gif

If I mention something, I usually get the response, "Oh! I forgot you do cakes!" Gee, thanks so much for telling me my cakes are so forgettable...
icon_mad.gificon_sad.gif

ajjhmf Posted 23 Jul 2009 , 2:00pm
post #26 of 52

After thinking about it, I'm going to stick to tiered and carved cakes. I don't enjoy sheet cakes and find them awkward to work on.

Cakemaker30, I don't think I am talking about you. If I am, I apologize if I offended you. I just can't afford to make cakes at those prices.

playingwithsugar Posted 23 Jul 2009 , 2:36pm
post #27 of 52
Quote:
Originally Posted by ajjhmf


However, in my neighborhood there is a cake lady almost everyone from our school uses for birthdays. She does sheet cakes with frozen butter cream transfers and charges $38 for a 9x13. That's less than a dollar a slice with the transfer. I can't compete with that cost wise and it's really not worth my time to do a cake for that little.

Aside from her price being ridiculous IMHO, how should I go about convincing potential clients that my cakes are worth the extra?




Have you seen these cakes? Are they a single layer, or two layer torted and filled? Have you tasted them? If not, for .85 a serve, it would be worth it to buy one, anonymously, and see if her quality is the same as yours.

Theresa icon_smile.gif

cakemaker30 Posted 23 Jul 2009 , 2:39pm
post #28 of 52
Quote:
Originally Posted by ajjhmf

After thinking about it, I'm going to stick to tiered and carved cakes. I don't enjoy sheet cakes and find them awkward to work on.

Cakemaker30, I don't think I am talking about you. If I am, I apologize if I offended you. I just can't afford to make cakes at those prices.




I don't think you were talking about me and if you were I wouldn't be offended at allicon_smile.gif No worries! I run my business however I want no matter what anybody else says and I wouldn't get offended by anything anyone said. That's why I went into business for myself so that I could do what I want and not worry what anyone else thought icon_biggrin.gif

ajjhmf Posted 23 Jul 2009 , 2:45pm
post #29 of 52

I have had one. I bought one a few years ago for my son's birthday party. They are a simple, single layer, non-torted cake. Butter cream icing nd I had a choice of chocolate, vanilla or mixed. The decoration for my sons (and all the others I've seen) is a frozen butter cream transfer. My opinion at the time was that it tasted better than the grocery, but I wasn't baking then so I can't really compare to mine. My friends have said mine taste fresher, but it could be that I scratch bake with organic ingredients. I don't know.

I do think she has a good market on the birthday sheet cake business here and I don't want to take any of that. And really, I can barely cover my time and expenses for they prices she charges.

playingwithsugar Posted 23 Jul 2009 , 2:49pm
post #30 of 52

FBCT or not, I think $38 is a lot of money for a single layer cake. If she can get that kind of money, then good for her.

You just keep offering your products, scratch, organic, sculpted. Take the high-end business, and let her bust her butt making sheet cakes. Lots of business will come your way when the right cake is in front of the right person. Then word of mouth will bring clients that can pay your price your way.

Theresa icon_smile.gif

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