TexasSugar Posted 20 Nov 2009 , 7:35pm
post #1 of

I don't have my own shop but I often read advice given on here, just to learn new things. On pricing thread it is often suggested to find out what the others in your area are charging when you are doing the 'research'.

My current full time job is in the roofing business. We often get calls on our prices. You can tell those that own a house and want our services vs those that want a price so they can turn around and charge it to someone else. Of course those people don't identify who they are, but when they ask you questions using the 'lingo' you get clued in. Or when we say that we don't give estimates over the phone but we'd be happy to come out and measure 'their' house they quickly get off the phone.

It frustrates us, because we are a business that is going into it's 27th year. We are fully insured. Our crews are our employees year round, we don't go pick up labors for a day or two, taxes are removed from their checks and we pay our part and offer health insurance.

Generally those calls that we get seem like they are coming from the average joe that has decided he can get a few people together, go to Lowes for some shingles, and pay the people he uses in cash and pocket the rest.

Is calling and getting a price from someone else really doing the research or is it taking the easy way out? Why don't they figure out how much the singles are going to cost them, and how much the labor will cost and so on? I don't want to get in a legal issue here (don't we all love when we read that) but those that just want to be a roofer when a storm comes through or when they need some extra cash usually don't do the best work and do things cheaper because they don't have the over head we have. As we tell our customers, we aren't the cheapest out there, but we will be here when you have a leak or a problem with your roof.

So my question, if you made it this far, those of you that do have a business how do you feel about people calling you for price information. Not just a regular customer but someone that knows the lingo and seems like they are just fishing for a price.

Do you give them the prices and go about your business?

Do you call them out on it in some way and refuse to give your prices?

Would you be more willing to offer your pricing information if they were honest with you about who they were and exactly why they are asking?

I'm not really asking about the price per serving questions. More like a what would you charge for a 3d santa claus cake that serves 50 made from this and this pan and has these details or a what do you change for an 8in 2 layer cake that has been torted and filled with ganache and iced in IMBC and how much would that same cake be if you covered it in fondant and then if I added a bow? Someone using terms that 'cake muggles' usually don't know.

I'm just curious how the the advice to price around the people in your area is taken from those that have to answer those calls?

64 replies
-K8memphis Posted 20 Nov 2009 , 7:44pm
post #2 of

I just price it roughly and go on. I get what you're saying.
But then the 'what ifs' set in.

What if it's Aunt Colette calling from New York to get an idea on prices for her sweet niecelette's cake or something--like Colette can't make the event but she wants to be sure the cake is awesome.

It might well be someone in the business spying, but I promise the time I call them on it will be the time Sylvia Weinstock wanted to get a cake for her high school friend who lives in Elvistown or some such nonsense.

It's probably a spy but...

indydebi Posted 20 Nov 2009 , 8:32pm
post #3 of

My pricing is posted front and center on my website, so it's not an issue with me. Brides get NO surprises when they ask me about pricing, as compared to other caterers who give them a per-person-FOOD-price, but then add in all of the secret nickels and dimes.

Back when I would do comparison calling (and have my daughter help with comparison calling), we'd be VERY careful not to use lingo. we'd intentionally mispronounce fondant. BC was "regular icing". Piping was "that fancy wedding cake decorations". Words like torting, filling, 3-D, crusting BC, etc., were not allowed to be used. And we closed the conversation with "since I dont' know much about cakes, is there anything I SHOULD be asking about?", which usually resulted in the person telling me all kinds of stuff.

(Man, I really should write this stuff down sometime!)

niccicola Posted 20 Nov 2009 , 11:24pm
post #4 of

Indy, YES you should write down everything about cakes and sell a book!!!

I know I'd pick it up.

About pricing, mine, too, is listed on my website. I get TONS of emails and phone calls and give every single one the same price (of course, based on their specific cake) and most of them never call back. Some might be price quoting for other businesses, or their own, or they just might be freaked out because they think they'll get a Duff cake on a WalMart budget. Who knows, who cares? I can't control who is calling.

LaBellaFlor Posted 21 Nov 2009 , 10:13pm
post #5 of

You could always start with just giving a base price. For example: buttercream starts at $3 and fondant at $4 per serving. If it's competition calling and you just give them a base price, they are gonna totally miscalcualte on their price quote and possible underprice at a loss to them.

CakeForte Posted 22 Nov 2009 , 5:43am
post #6 of

I dont price over email b/c I get a lot of emails, and the time adds up. I have the minimum amount (and I just added this) average pricing based on a type of design.

If they are serious, they will come in for an appointment.

snarkybaker Posted 22 Nov 2009 , 8:01pm
post #7 of

I not only call for prices, I hire " Bride spies" to go out and price my main competitiors at least once a year with a picture in hand to get a quote.

snarkybaker Posted 22 Nov 2009 , 8:02pm
post #8 of

I not only call for prices, I hire " Bride spies" to go out and price my main competitiors at least once a year with a picture in hand to get a quote.

costumeczar Posted 22 Nov 2009 , 10:48pm
post #9 of

I explain how I price the cakes, then give them an estimate, no big deal.

If I was going to be a spy and call people, I would ask "how much for a three-layer cake?" since that seems to be the way that most not-in-the-know people ask about tiered cakes! icon_lol.gif

tcakes65 Posted 23 Nov 2009 , 4:19am

If someone asks, I will provide them with an estimate. I would rather my competition ask than send "bride spies". Sending spies costs the competition money...the time they invest in your fake brides and the samples they provide for free just so you can get some info. There's nothing I can't stand more than waste my time and money on a competitor's spy. I've found that if you listen to your brides at their consults, they mention in passing what other bakeries charge without even asking them.

TexasSugar Posted 23 Nov 2009 , 4:04pm

Thanks for the replies! I was just curious how everyone felt about it.

Indy, you should write a book, especially with all your anolgies you give! I'd definetly buy it.

snarkybaker Posted 23 Nov 2009 , 5:59pm
Quote:
Originally Posted by MCC

If someone asks, I will provide them with an estimate. I would rather my competition ask than send "bride spies". Sending spies costs the competition money...the time they invest in your fake brides and the samples they provide for free just so you can get some info. There's nothing I can't stand more than waste my time and money on a competitor's spy. I've found that if you listen to your brides at their consults, they mention in passing what other bakeries charge without even asking them.




But market research is more than just " price quotes". For example, in one round, I found out that a pretty well known home decorator around here charges an extra 3% to use a credit card. That is against Federal Law. In another, I found out that a decorator that is recomended by a big venue close to me will give a bride a dicsount if she returns her used sugar flowers, which is against health codes. Some are charging "stacking fees" or my favorite, one even charges a "preservation fee", and by that she means that she charges $25 to bring a box for the top tier and saran wrap so the venue can "preserve the anniversary tier".

These are things you wouldn't necessarily found out by calling, but they will help you figure out why another may be cheaper.
For example If I quote a $500 cake...Say cake for 80 ( $400) plus some extra design work in the way of sugarflowers.

Competitor number 1 may quote her $450, but charge her for delivery and then the extra 3% fee..she is in reality more expensive than me.

Number 2 offers her $50 to return her flowers, at which point you need to ask the bride if, perhaps those flowers were in someone elses cake, and maybe they shouldn't have been...


In any case, understanding your market is a lot more than getting phone price quotes. Maybe you need to do it. Maybe you don't. I am of the mind that knowledge is power.

indydebi Posted 23 Nov 2009 , 6:07pm

snarky, those are amazing stories. I am still laughing over the "preservation fee"! icon_lol.gif

I created an excel worksheet entitled "Here's Why You Should Price Compare", where I make a list of catering they would order, then list my charges and what another caterer charges. The other-caterer-charges were obtained from my personal internet research ... prices and fees posted right on their website.

My catering package is $18.75. Their catering package is $14.95. For a wedding for 100, a $400 difference is a lot of money to anyone. On the surface, I lose this booking.

But ..... ! by the time we add in all of their nickel and dimes that I don't charge, my catering for 100 guests ends up being over $1500 cheaper than the other guy! icon_eek.gif I am not kidding.

And that's why I coined the phrase: Never ask "how much does it cost?" ALWAYS ask "how much do I have to write the check for?"

There's a BIG difference in those answers!

And this is why snark is on my short list of "people I admire".

BooBooKitty Posted 23 Nov 2009 , 7:33pm
Quote:
Originally Posted by niccicola

Indy, YES you should write down everything about cakes and sell a book!!!

I know I'd pick it up.




I second that!!! thumbs_up.gif

JenniferMI Posted 24 Nov 2009 , 2:40pm

I don't have a problem with people calling and asking my prices.

Jen icon_smile.gif

LaBellaFlor Posted 25 Nov 2009 , 12:41am
Quote:
Originally Posted by snarkybaker

Quote:
Originally Posted by MCC

If someone asks, I will provide them with an estimate. I would rather my competition ask than send "bride spies". Sending spies costs the competition money...the time they invest in your fake brides and the samples they provide for free just so you can get some info. There's nothing I can't stand more than waste my time and money on a competitor's spy. I've found that if you listen to your brides at their consults, they mention in passing what other bakeries charge without even asking them.



But market research is more than just " price quotes". For example, in one round, I found out that a pretty well known home decorator around here charges an extra 3% to use a credit card. That is against Federal Law. In another, I found out that a decorator that is recomended by a big venue close to me will give a bride a dicsount if she returns her used sugar flowers, which is against health codes. Some are charging "stacking fees" or my favorite, one even charges a "preservation fee", and by that she means that she charges $25 to bring a box for the top tier and saran wrap so the venue can "preserve the anniversary tier".

These are things you wouldn't necessarily found out by calling, but they will help you figure out why another may be cheaper.
For example If I quote a $500 cake...Say cake for 80 ( $400) plus some extra design work in the way of sugarflowers.

Competitor number 1 may quote her $450, but charge her for delivery and then the extra 3% fee..she is in reality more expensive than me.

Number 2 offers her $50 to return her flowers, at which point you need to ask the bride if, perhaps those flowers were in someone elses cake, and maybe they shouldn't have been...


In any case, understanding your market is a lot more than getting phone price quotes. Maybe you need to do it. Maybe you don't. I am of the mind that knowledge is power.





Love it, love it, love it! Gotta admire ya! thumbs_up.gif

Quantum Posted 26 Nov 2009 , 10:11pm
Quote:
Originally Posted by snarkybaker

For example, in one round, I found out that a pretty well known home decorator around here charges an extra 3% to use a credit card. That is against Federal Law.




Just to clear something up (or, possibly, muddy the waters): no, it is not against Federal law. Visa and MasterCard prohibit surcharges for using their credit cards and American Express discourages them. In addition, some states have laws that make surcharges illegal, but they are not illegal under Federal law. Personally, I think it's more than a little scuzzy for a business to do it. And companies can always get around it by charging X price, but cutting X% off for customers that use cash.

snarkybaker Posted 27 Nov 2009 , 1:54am
Quote:
Originally Posted by Quantum

Quote:
Originally Posted by snarkybaker

For example, in one round, I found out that a pretty well known home decorator around here charges an extra 3% to use a credit card. That is against Federal Law.



Just to clear something up (or, possibly, muddy the waters): no, it is not against Federal law. Visa and MasterCard prohibit surcharges for using their credit cards and American Express discourages them. In addition, some states have laws that make surcharges illegal, but they are not illegal under Federal law. Personally, I think it's more than a little scuzzy for a business to do it. And companies can always get around it by charging X price, but cutting X% off for customers that use cash.




Yes actually it is against the law:

The Federal Truth in Lending Act states: 167, (2) No seller in any sales transaction may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar means.

-K8memphis Posted 27 Nov 2009 , 2:33am

Just an aside here but it pisseth me off--the state of TENNESSEE charges a surcharge if you pay for your tags or your license with a credit/debit card.

just_for_fun Posted 27 Nov 2009 , 2:45am

Yeah, and NY state charges a surcharge if you pay your parking fines w/ a cc, too. we should report them to the feds. Now that should get us somewhere.....

grandmom Posted 27 Nov 2009 , 2:32pm

No reason for me to jump into this, and certainly not to be contrary, but ...

I wasn't absolutely certain, but having worked in banking for decades, I thought I recalled that the cited ban on surcharges expired some time ago. I did a little research and found this on the FDIC's current website when I searched for "truth in lending credit card surcharge":

http://www.fdic.gov/regulations/laws/rules/6500-500.html#fdic6500167

§ 167. Use of cash discounts

(a) With respect to credit card which may be used for extensions of credit in sales transactions in which the seller is a person other than the card issuer, the card issuer may not, by contract or otherwise, prohibit any such seller from offering a discount to a cardholder to induce the cardholder to pay by cash, check, or similar means rather than use a credit card.

(b) With respect to any sales transaction, any discount from the regular price offered by the seller for the purpose of inducing payment by cash, checks, or other means not involving the use of an open-end credit plan or a credit card shall not constitute a finance charge as determined under section 106, if such discount is offered to all prospective buyers and its availability is disclosed clearly and conspicuously.

[Codified to 15 U.S.C. 1666f]

[Source: Section 167 of title I of the Act of May 29, 1968 (Pub. L. No. 90-321), as added by section 306 of title III of the Act of October 28, 1974 (Pub. L. No. 93-495; 88 Stat. 1515), effective October 28, 1975, and as amended by section 3(c)(1) of the Act of February 27, 1976 (Pub. L. No. 94-222, 90 Stat. 197), effective February 27, 1976; and section 101 of title I of the Act of July 27, 1981 (Pub. L. No. 97-25; 95 Stat. 144), effective July 27, 1981]

NOTE

Expiration date of § 167(a)(2). Section 3(c)(2) of the Act of February 27, 1976 (Pub. L. No. 94-222; 90 Stat. 197) as amended by section 201 of title II of the Act of July 27, 1981 (Pub. L. No. 97-25; 95 Stat. 144), states that section 167(a)(2) shall cease to be effective February 27, 1984.


Bold added by me. I also found on Google that some states have imposed a similar ban on credit card surcharges, but I can't cite any past or current regulatory verbiage on that.

-K8memphis Posted 27 Nov 2009 , 2:39pm

Make that easy for me to understand will yah, G'Mom?

I worked in credit card processing and I know it is against the merchant's agreement with the credit card companies to change prices in any way regarding the type of tender offered in the transaction.

It's also bogus to have a minumum--some places want at least $10 spent before you can use your card--not valid--not generally enforced though in my experience.

cakemeasIam Posted 27 Nov 2009 , 2:55pm

i have found when people call for pricing they are shocked to see what a "kitchen aid mixer" would be or a converse sneaker or a deer head...
can you hear my frustration??

I feel that I am reasonable priced for what we do...some of you have said i don't charge near enough for a carved cake. i agree it is difficult.

sometimes when the phone is ringing off the hook with pricing and they don't turn into orders whats a caker to do- go eat some buttercream i guess! icon_smile.gif

i guess the point of this is i get calls all the time for prices....

grandmom Posted 27 Nov 2009 , 2:56pm

K8Memphis said: Make that easy for me to understand will yah, G'Mom?

Easy to understand? Ha! I don't think the regulators want us to be able to understand!

I am just pointing out from what I see on the FDIC's website that it appears the previously cited reference expired years ago. That would lead one to believe that surcharges are indeed legal, except in the states where it is prohibited.

Having said that, credit cards are not my thing. I doubt anyone is at work today who can clarify this, but I will see if I can get more help on the topic. We are a major bank holding company and a credit card issuer, so someone around here should know. I'll post what I find out.

-K8memphis Posted 27 Nov 2009 , 3:10pm
Quote:
Originally Posted by grandmom

...I am just pointing out from what I see on the FDIC's website that it appears the previously cited reference expired years ago. That would lead one to believe that surcharges are indeed legal, except in the states where it is prohibited.




Gotcha. Thanks.

grandmom Posted 27 Nov 2009 , 3:24pm

Well, nobody in today who can help, but I did find that VISA does prohibit merchants from charging surcharges:

http://usa.visa.com/merchants/operations/no-surcharge.html

and the Mastercard website cites the same policy, but in a PDF that I can't copy here.

I read that Discover and American Express do not have this policy.

VISA and MC sites both said cash discounts are permitted as long as they are offered to all customers. That all sounds like smoke and mirrors to me!

Of course, card companies prohibiting surcharges by means of their own policies is not the same thing as it being illegal to charge surcharges.

In several sites on the web the following states are listed as prohibiting credit card surcharges by law:

California
Colorado
Connecticut
Florida
Kansas
Maine
Massachusetts
New York
Oklahoma
Texas


Enough of this... gotta work!

-K8memphis Posted 27 Nov 2009 , 3:39pm
Quote:
Originally Posted by grandmom


Of course, card companies prohibiting surcharges by means of their own policies is not the same thing as it being illegal to charge surcharges.




But they will shut you down too. No more credit card sales for you!! In fact --the law that was canceled up there--mighta been rewritten somewhere else. And it probably was the credit card companies who wanted those rules changed so they could take action without involving the courts.

tcakes65 Posted 27 Nov 2009 , 6:51pm
Quote:
Originally Posted by snarkybaker

Quote:
Originally Posted by MCC

If someone asks, I will provide them with an estimate. I would rather my competition ask than send "bride spies". Sending spies costs the competition money...the time they invest in your fake brides and the samples they provide for free just so you can get some info. There's nothing I can't stand more than waste my time and money on a competitor's spy. I've found that if you listen to your brides at their consults, they mention in passing what other bakeries charge without even asking them.



But market research is more than just " price quotes". For example, in one round, I found out that a pretty well known home decorator around here charges an extra 3% to use a credit card. That is against Federal Law. In another, I found out that a decorator that is recomended by a big venue close to me will give a bride a dicsount if she returns her used sugar flowers, which is against health codes. Some are charging "stacking fees" or my favorite, one even charges a "preservation fee", and by that she means that she charges $25 to bring a box for the top tier and saran wrap so the venue can "preserve the anniversary tier".

These are things you wouldn't necessarily found out by calling, but they will help you figure out why another may be cheaper.
For example If I quote a $500 cake...Say cake for 80 ( $400) plus some extra design work in the way of sugarflowers.

Competitor number 1 may quote her $450, but charge her for delivery and then the extra 3% fee..she is in reality more expensive than me.

Number 2 offers her $50 to return her flowers, at which point you need to ask the bride if, perhaps those flowers were in someone elses cake, and maybe they shouldn't have been...


In any case, understanding your market is a lot more than getting phone price quotes. Maybe you need to do it. Maybe you don't. I am of the mind that knowledge is power.




Not sure why you took it this direction. The OP was specific in her question, and I provided a response based on that question. I never stated there wasn't more to market research than obtaining prices. I have two business degrees and understand that quite well. I never indicated what my practices were, only that I would prefer my competition ask me up front rather than spy. Your response targeted toward my post is uncalled for. It is not my business' responsibility to pay for my compeition's market research by expending manpower and free samples to fake brides. When I calculate the money spent on fake brides, it quickly adds up. There are other ways to obtain information. I refuse to send out spies because I think it is unethical. Just my humble opinion. I have better, more effective practices. I've caught more than one bride spy by the questions posed or a slip of the tongue. Not a pleasant position for the bride when she's caught. It's a shame that you really don't care about the cost you are imposing on your competition. The business has to account for the loss. Just the other side of the coin that most people don't want to take into consideration because sending spies is supposed to be the customary thing to do.

indydebi Posted 27 Nov 2009 , 6:58pm

"Secret Shoppers" is not a new idea, it's not illegal, it's not underhanded, it's not even sneaky. Large, successful chain companies across the country use them on a regular basis.

I consider myself a success if someone wants to Secret Shopper me. No one wants to find out what the BAD companies are doing! icon_lol.gificon_lol.gif

-K8memphis Posted 27 Nov 2009 , 7:31pm

I used to be a secret shopper. Got nice perks & free/reduced price food.

I mean isn't it a discussion--we are all free to ping and pong back and forth with our comments & opinions.

Quote:
Quote:

Your response targeted toward my post is uncalled for.




Why? I mean you're not addressing me here but it's a discussion--I have a sweeeet sweeeet cyber friend who cannot abide any other opinions but her own--do not challenge her no one on this board-- complete agreement only--control much?

But still yet as a control freak in my own right I am at least careful enough to only try & control what I can control kwim. and half the time that don't work either~~ what???

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