Cake Pricing

Decorating By chasley101 Updated 22 Oct 2009 , 8:21pm by JenWhitlock

chasley101 Posted 21 Oct 2009 , 2:56am
post #1 of 18

Please help! I'm tired of my husband getting upset after every cake I bake telling me I didn't charge enough! I really have no clue what I'm doing! I started making cakes and now everyone and their brother is wanting me to make a cake for them. Which is great don't get me wrong, I just don't know how to charge!

I'm sure you get tired of these posts but I have been searching for a few hours on here and can't find exactly what I'm looking for.

Please any advice or links to other websites with this information would be greatly appreciated!

Thankyou, Thankyou, Thankyou in advance!! thumbs_up.gif

17 replies
cakeandpartygirl Posted 21 Oct 2009 , 3:05am
post #2 of 18

If you look at the top of the cake decorating business forum. There is a sticky there called alice's cake matrix. It will give you a platform on how to price your cakes.

ApplegumKitchen Posted 21 Oct 2009 , 3:09am
post #3 of 18

You've probably got every man and his dog ordering cakes from you .... because your husband is RIGHT! icon_biggrin.gificon_biggrin.gificon_biggrin.gif

It really isn't rocket science but from the queries I see on here about pricing - I am beginning to think it MUST be!!

How much money have you spent on equipment (tins, piping stuff, cutters, books, classes etc. etc.)? How do you plan to re-coup any of these costs?

When you are making a cake you need to have some sort of DATA to work from? and keep that information so you WILL know for next time - you obviously have access to a computer to be here - so make it work for you!! so .... have you kept receipts from your ingredients purchases? Work out the unit price for your ingredients and list them.... Flour, sugar, eggs etc etc. buttercream, fondant, boards, skewers etc etc.
Every time you pick something up to make that cake.... WRITE IT DOWN
Work out your utilities... it isn't just how much your oven costs!!
How long do you spend making/decorating the cake - AGAIN ... Keep a diary!! every time you sit down to do ANYTHING with that cake .... WRITE IT DOWN!! Put a price on your time - even if you are happy with $2 per hour (I'm not!!) include it - Car expenses? How do you get your supplies? Do you deliver?

Are you starting to understand now ? LOL YES your husband is probably right, he probably has a much better idea of how much money is going out and how much money is coming in.... don't feel bad - only 3 out of every 10 decoraters do their pricing using DATA - most just pull a number out of their ar*e.

Sorry - just re-read this and it sounds bit harsh - must be our straight shooting Aussie way!! No offence intended - but it you don't toughen up and learn - you will be going broke FAST!
There is NO kudos in many heaps of cakes for nothing!

ApplegumKitchen Posted 21 Oct 2009 , 3:19am
post #4 of 18

This is more like what I was trying to explain to you...

http://www.cakescanada.com/HowTo/pricematrix.xls

Thought Canada might have more similar products to what you are using.

It needs to be extensive - so you can see where ALL you money is being spent - so that you will remember to recoup it

YOU NEED TO MAKE SOME MONEY FOR YOURSELF!! icon_biggrin.gificon_biggrin.gificon_biggrin.gif

makeminepink Posted 21 Oct 2009 , 3:30am
post #5 of 18

You know, I think this is the hardest thing. My daughter listened to me when I was talking to someone about ordering a cake and said I was making it too complicated. I just started saying a price per serving that I'm comfortable with personally and then not adding that it could cost more depending on design and degree of difficulty until we've had a chance to talk and find out what they want. I'm not into the matrix thing-- too complicated for my tired mind! You have to be able to do a cake and then stand back and think, "Is the price I quoted enough? Am I happy and satisfied with what I'm getting?" It's different for everyone. Good luck!

ApplegumKitchen Posted 21 Oct 2009 , 3:52am
post #6 of 18
Quote:
Originally Posted by makeminepink

You know, I think this is the hardest thing. My daughter listened to me when I was talking to someone about ordering a cake and said I was making it too complicated. I just started saying a price per serving that I'm comfortable with personally and then not adding that it could cost more depending on design and degree of difficulty until we've had a chance to talk and find out what they want. I'm not into the matrix thing-- too complicated for my tired mind! You have to be able to do a cake and then stand back and think, "Is the price I quoted enough? Am I happy and satisfied with what I'm getting?" It's different for everyone. Good luck!




I agree ! BUT the whole pricing matrix thing is for people to get to know HOW MUCH it is costing them - most people will quote a price per serving that sounds quite reasonable to them .... and then if you were to get them to do a matrix they invariably find they are NOT making as much as they thought. Purely because there are things that they haven't included, or simply did not think about.
It might seem difficult - but it isn't really - even if you just use a notepad and use it like a diary - Once you have done this a number of times and you are very familiar with what things cost and how much time things take - then YES - you can then quite confidently just say a price...
but until you have a really good understanding of what you are spending - you will never be pricing correctly... simply because you are not aware!

makeminepink Posted 21 Oct 2009 , 4:03am
post #7 of 18

You're right. I need to do that. I need to figure exactly what it costs a few times-- I might be missing more than I think!

leah_s Posted 21 Oct 2009 , 4:14am
post #8 of 18

And then there's one more consideration. Does your state or city require you to be licensed?

chasley101 Posted 21 Oct 2009 , 1:16pm
post #9 of 18

ApplegumKitchen = You crack me up! Thank you for your honesty! That's what I want! And thank you so much for your help! I want to be realistic about these prices. And I want to be fair to other cake decorators in my area!! And I want my husband to be happy about my business! icon_smile.gif I know he supports me, he just gets upset because he believes I am short-changing myself. It's all out of love - I just need to keep telling myself that!

leah_s = Thank you for the head's up. I have spoken with the health department here and we do not have to be licensed. We just can't sell anything that needs to be refrigerated.

Thanks everyone, hopefully I can figure things out!

-K8memphis Posted 21 Oct 2009 , 1:46pm
post #10 of 18

Pricing cakes is not easy. Pricing cakes on the spot is very difficult. But always pricing a custom made cake ramps it up to nuclear intensity.

So nailing down your base pricing is key. How much per serving for buttercream, for fondant, for classic cakes, for gourmet cakes.

Then for classic design (aka no additional charge) for 2-d sculpture, 3-d sculpture, floral work --where some decoration would be included in the classic designs but you need to draw the line where it starts to be additional.

Extra skills and materials used means extra money charged.
Don't start low, start right.

Place an important value on yourself thoughts for you because no one can/will do it for you.

Mike1394 Posted 21 Oct 2009 , 2:13pm
post #11 of 18

Everyone says it's the hardest thing in the world. PHSSST, it's not. First YOU have to decide WHAT part of the market are you going after. Are you going to go to the high end, and do two cakes a month? Are you going to put Walmart, Sams, and Costco out of the cake business? Do you want to just carve out SOME of the local economy to buy you, and your family some extra things?

Whatever you choose you first have to KNOW what your costs are. This doesn't mean all the grocerys you bought to make this cake. It means breaking it down to what actually went into the cake. Then there is the cost of elec., gas, and incedentals. I don't figure per hr, because an owner makes a salary. It doesn't matter whether your laying on a beach, sleeping, or working 80 hours.

After you figured costs, you figure how much profit you want PER CAKE. If you want to make 1000 per cake, or $1.00 per cake that's your choice on what to do.

Now make your choice, and go kick the world in the butt, and make a million.

Mike

chasley101 Posted 21 Oct 2009 , 2:39pm
post #12 of 18

K8memphis = thank you! I never price on the spot. Usually customers give me a picture and I tell them I will figure costs and then let them know. It makes me too nervous to figure costs in front of them. I want to make sure I have everything covered! Plus I haven't done enough cakes to be able to just rattle off a price. Thank you for your last comment.

Mike 1394 = Thats just it, I'm not into the Sams, Walmart thing! I don't want to do just typical sheet cakes. So it's hard when people are used to those prices. But I do understand I can not charge their prices. Nor would I want to. I will go kick the world in the butt and make millions! **that made me smile! THANK YOU!

rosiecast Posted 22 Oct 2009 , 3:27am
post #13 of 18

Chasley- how much have you been charging?

prterrell Posted 22 Oct 2009 , 3:51am
post #14 of 18

You CANNOT compete with Sams, Walmart, BJ's, Costco, the grocery store. Why? Because in those stores the bakery is NOT designed to make a profit. A good week in one of those stores' bakeries is one in which the bakery breaks even. The bakeries are what is called a "loss leader". The stores are willing to lose money on the bakery products in order to get people in the store because chances are they'll spend money buying other things in the store. So, unless you are willing to sell at a LOSS or give your cakes away for FREE, you just CANNOT compete with those stores!

ApplegumKitchen Posted 22 Oct 2009 , 3:55am
post #15 of 18

I don't think putting a $amount here is going to help at all - in fact I would advise against it.

Every time I see people saying how much would you charge for this cake or that cake - I just want to bang my head against the computer screen... LOL and sometimes do!!!

Its like saying how much would you pay for a car..... $20,000 per seat?

What car? What country? What is your income? What are YOU looking for in a car?

anyway - guess you have my drift by now - SORRY!

But the only person that can work out the amount ot charge for a cake is the person that made it! We can help you with that calculation but when people hop on here and say .... oh wedding cakes start at $3.50 per serving! - they are really doing everybody a disservice. Nobody knows what you have spent on the cake.


It really amazes me that people can learn how to do a cake and will spend time learning something new - but they seem so reluctant to learn to price their work effectively - I feel like its a case of ... you can lead the horse to water - but you can't make him drink'

chasley101 Posted 22 Oct 2009 , 1:00pm
post #16 of 18

prterrell = I did not know that! Wow, thanks for the info!

rosiecast = I made a 2 layer 9 inch square cake, b/c icing, and a message with a few fall leaves (out of b/c) and charged $20, I made a dozen cupcakes with b/c and a few fondant accents and charged $18, I made a 3-D barn cake (b/c icing, served 40) and grain silo (smash cake) on a green fondant covered cake board and charged $65. That one was huge and I should have charged more! That's just an overview.

ApplegumKitchen = you seriously sound like my kinda girl! you tell it like it is! icon_smile.gif I'm not looking for a price sheet with 'X' amount of dollars for 'X' amount of servings. I just want to know HOW to price my cakes. I understand fondant costs more than buttercream. Or atleast with me it does! I just don't know how to figure costs.

Thanks everyone!! Your comments are greatly appreciated!!!!!

ApplegumKitchen Posted 22 Oct 2009 , 7:56pm
post #17 of 18

See that comment...... I know fondant costs more buttercream..... doesn't ring true for Australia.

We don't use buttercream very often but if we did and started off with that philosophy we would go broke. BUT doing a pricing matrix would determine that HERE it does cost more to produce 1kg of buttercream than it does to produce 1kg of fondant. Thats just the way it is icon_biggrin.gif

JenWhitlock Posted 22 Oct 2009 , 8:21pm
post #18 of 18

I hate pricing too.
I did some research in my area to see what the going rate is.
that's my price.
I have figured out my per serving price for most things.
but here's the annoying part....
I've need to buy more tools.
I need insurance, I needed to buy several box sizes, yadda yadda yadda.
so I'm please and surprised at my retail sales, take out my expeneses (not including my time) and I've made $33 this year.
this is a unique year... lots of initial purchases, but sheesh!

and yes, hubby thinks that I need to charge more! icon_rolleyes.gif

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