By The Slice Or By Cost Of Ingredients?

Business By joyfullysweet Updated 20 Jan 2010 , 6:21pm by DelectabilityCakes

joyfullysweet Posted 19 Jan 2010 , 5:18pm
post #1 of 26

I'm starting to do research on starting a cake decorating business (for years down the road! lol). I've been calling local bakeries and going on their websites. Some have per slice charges and others say every cake is different and you would have to meet for a quote.

Do most of you charge "by the slice" (with decorations extra) or add up the cost of ingredients/labor/etc. and determine a price from there? (I apologize if there's a thread for this already, I did search and did not come up with anything..please redirect me if there is)

It seems to make more sense to charge by the cost of ingredients, because different flavors will cost different amounts to make.

If I'm not mistaken, this is how Alice's cake matrix is set up??? Does anyone know how the "cake boss" software is set up?

Thanks in advance for your wisdom! icon_smile.gif

25 replies
flamingobaker Posted 19 Jan 2010 , 5:30pm
post #2 of 26

I charge "by the cake" Meaning, I state a price and a range of servings. That takes cake of the problem of charging more for "weddings and less for parties"
Average your cost for most of your flavors. if you have a different price for every single l flavor, it will drive everyone crazy. Or have to tiers of flavors ie regular and premium.

KHalstead Posted 19 Jan 2010 , 5:33pm
post #3 of 26

I have cake boss and the way it's set up is that you list your ingredients for a particular recipe (let's say "chocolate cake") and it tells you how much one batch costs. You then would just add how many of each recipe you use for let's say a 10" round...I'd use 2 batches (1 batch for each layer).......so it would calculate that cost for me. I then could say that a 10" round is 35 servings, cake boss will then ask me "would you like to divide the cost between the servings?" I say Yes...and it tells me my cake costs me $.35/serv. to make.........you go on from there. I actually made recipes on cake boss that are as follows "10" round iced and boxed" this includes the cake recipe, frosting recipe, cake board, cake box and a couple extra cups of icing for decorating"...all included...so I can just click on 10" round cake and it automatically puts my costs.

I understand what you're saying about different flavors costing different amounts, and they do. What I personally do is I have regular flavors at X.XX/serv. and Premium flavors at X.XX/serv. I still charge per serving, the cost is just slightly higher for the cake flavors that require more/more expensive ingredients.

Kitagrl Posted 19 Jan 2010 , 5:41pm
post #4 of 26

I mostly charge per serving....

I include all cake flavors....assuming they will pick expensive ones...if they pick cheaper ones, that's just good for me.

prterrell Posted 19 Jan 2010 , 6:34pm
post #5 of 26

Well, the cost of the ingredients determines your per slice/per serving cost. Otherwise you're just saying some random number is your per serving cost without know if it covers your cost (including labor).

Kitagrl Posted 19 Jan 2010 , 6:36pm
post #6 of 26
Quote:
Originally Posted by prterrell

Well, the cost of the ingredients determines your per slice/per serving cost. Otherwise you're just saying some random number is your per serving cost without know if it covers your cost (including labor).




Not necessarily as long as you keep checking yourself.... I have to charge for my time...my payment easily covers my costs...its my labor I have to worry about.

prterrell Posted 19 Jan 2010 , 6:41pm
post #7 of 26

Oh, well, see I consider labor a cost (and the biggest one at that). If more people thought of their labor that way, they might pay themselves more, that is, charge more for their cakes.

Kitagrl Posted 19 Jan 2010 , 6:43pm
post #8 of 26

I have been steadily increasing my prices...I am going to "hold" for now until I get busier (swamped each week) and then of course as long as I can get what I ask for, I will continue to increase in the future.

indydebi Posted 19 Jan 2010 , 7:15pm
post #9 of 26

I'll just offer how I did mine.

The bakeries that told you "you'd have to come in for a quote" probably have some kind of base price, but without knowing exactly what kind of cake you wanted, couldn't give you a generic price. they may have told you (you = a potential client) that "it's $3/serving" but when you, the client, arrived to order, it turns out you wanted fondant with gumpaste flowers cascading down the sides and a big 'ole poem written on all of the tiers, with a fudge exploding volcano. Hmmm....that one won't be $3! icon_lol.gif

I had flat pricing because my costs were pretty much flat. There were some things that I charged extra for, like my City Skyline cake where the Skyline was hand-cut from 18x26 sheets of tempered chocolate and applied. Some fondant decors were extra.

A price per serving is a good guideline because you don't have to figure the price/cost of the each and every cake you do. I just can't see having the time to do that. with a price per serving and a good price list of any of the extras, there's no reason you can't give a bride a quote on the spot at the consultation, unless there was something really weird and odd about it.

There are many CC'ers who book a bride at the consultation, which is great. And they are able to do that because they can give a price then and there. They dont' have to take a few hours or a few days to "get back to you".

It's not cake, but another example is my chocoalte covered strawberries. I'd price the selling price based on my cost during non-peak season. Which means I never had to say "Oh let me see what berries are costing today and get back to you." I quoted them a price then and there based on myh worst case scenario pricing. It means I either made more profit during the summer months, or I was able to look liek a good guy and give them a "discount" in the summer.

My flat pricing worked the same way. If it was an ornate cake, my time was covered. If it was a simple cake, I made more profit. And one bride told me "Your per-serving price was the highest, but your final cost was the cheapest" because of all of the nickels and dimes other bakeries added to her. Here's the story about it on my blog: http://cateritsimple.blogspot.com/search/label/lowest%20price

Kitagrl Posted 19 Jan 2010 , 7:23pm
post #10 of 26

I agree with that...I know my pricing will more than cover my costs and I know it will cover my time well enough. Now depending on the size of the cake I may make $12/hour or I may make over $25-$30/hour but as long as I'm profiting decently, then its good.

The only times I've had to get back with someone on pricing is if I had to research a 3D cake or if its something I had not sold before, like a cheesecake or individual desserts (like dipped strawberries or something I don't do much of.)

I usually have in my head estimates of what I start with and how much more work something will be....I might say to myself "That fondant cake is usually XX dollars but with the extra decor I'm going to add $1/serving."

Sometimes I tell people "Your idea will range from XX to XX per serving, and when I know exactly what you want, I can give you an exact quote.

joyfullysweet Posted 19 Jan 2010 , 7:46pm
post #11 of 26

So indydebi, I just read your blog. What a wonderful resource! Let me see if I understood you correctly. You have a set price of $3.50 per serving and that's what you charge unless they add extreme details such as gumpaste flowers or figures? So I guess my next step would be to figure out an average price I should charge per slice (factoring in prices of ingredients, labor, etc.). I'm sure prices will change by the time I'm ready to open for business, but I just want to get a sense of where I should be headed.

indydebi Posted 20 Jan 2010 , 2:52am
post #12 of 26
Quote:
Originally Posted by joyfullysweet

So indydebi, I just read your blog. What a wonderful resource! Let me see if I understood you correctly. You have a set price of $3.50 per serving and that's what you charge unless they add extreme details such as gumpaste flowers or figures? So I guess my next step would be to figure out an average price I should charge per slice (factoring in prices of ingredients, labor, etc.). I'm sure prices will change by the time I'm ready to open for business, but I just want to get a sense of where I should be headed.


Yep, $3.50 flat pricing. I really only had 5 or 6 designs that I charged some nickels-n-dimes on, so it always worked out and brides liked having just a flat price to deal with. It worked well for me.

mireillea Posted 20 Jan 2010 , 8:26am
post #13 of 26

I also use a base price of 4.50 per serving, but I also tell them I can only make an exact quote during the consultation.
That is, because in my experience, most brides have a pretty good idea of what they want, but can change it easily (read: they make additions to the design icon_lol.gif ) during the consultation. That is why I always quote a final price at the end of the consultation. Most of my designs contain gumpaste flowers. For me, it is quite a big difference if the bride wants a cascade down the cake or just a few flowers here and there.
However, I do not charge those flowers per flower, I keep charging a price per serving. If they want more flowers, the price per serving goes up. This way, it is easier for the wedding couple to calculate the price of their wedding cake and it is easier for me to calculate my price (that they never hear about). Of course, my profits/serving ratio goes up with the number of servings. So I love big weddings! But I still make a pretty decent living out of smaller weddings because my base price covers both my cost price and a solid labor/hour price.

prterrell Posted 20 Jan 2010 , 8:32am
post #14 of 26

I charge by the cubic inch of cake. (25 cents for each cubic inch).

joyfullysweet Posted 20 Jan 2010 , 2:19pm
post #15 of 26

Thank you for all your help. I'm going to print this thread right out and put in my "cake file"! icon_smile.gif

AverageMom Posted 20 Jan 2010 , 2:29pm
post #16 of 26

By size. I don't care how many servings you get.

Kitagrl Posted 20 Jan 2010 , 2:54pm
post #17 of 26
Quote:
Originally Posted by AverageMom

By size. I don't care how many servings you get.




How does that work out? I know my customers would have no clue how many inches they would need for their party...

MikeRowesHunny Posted 20 Jan 2010 , 3:14pm
post #18 of 26
Quote:
Originally Posted by mireillea

Of course, my profits/serving ratio goes up with the number of servings. So I love big weddings!




We don't get too many of those here though do we?! I think my average serving number for wedding cakes is 50-60 icon_rolleyes.gif ! I particularly find the people funny who want a 3-tiered cake for 25-30 people - okaaaaaaaaay then icon_rolleyes.gificon_confused.gif !

joyfullysweet Posted 20 Jan 2010 , 3:27pm
post #19 of 26
Quote:
Originally Posted by MikeRowesHunny

Quote:
Originally Posted by mireillea

Of course, my profits/serving ratio goes up with the number of servings. So I love big weddings!



We don't get too many of those here though do we?! I think my average serving number for wedding cakes is 50-60 icon_rolleyes.gif ! I particularly find the people funny who want a 3-tiered cake for 25-30 people - okaaaaaaaaay then icon_rolleyes.gificon_confused.gif !


Some people just don't get it I guess! Would you just use dummy tiers to make up the difference then? How do you charge for dummy tiers since there's no cake?

Kitagrl Posted 20 Jan 2010 , 3:37pm
post #20 of 26

I generally do not understand dummies...but then I only dock $1/serving for a dummy because its still the same work, and the same icing/fondant!

If I were buying, I'd just buy the cake and, I dunno, freeze or give away the leftovers! Somebody would eat it and enjoy it!

MikeRowesHunny Posted 20 Jan 2010 , 3:55pm
post #21 of 26
Quote:
Originally Posted by joyfullysweet


Some people just don't get it I guess! Would you just use dummy tiers to make up the difference then? How do you charge for dummy tiers since there's no cake?[/quote]

Dummies here are $$$$$. I price my cakes by the work required, plain and simple. Maybe I'd dock $20 off for using the dummy (not having to bake or fill a cake), but EVERY other aspect of the cake is the same, so pretty much the same charge. Might as well have the cake and send people home with the extra or something!!!

mireillea Posted 20 Jan 2010 , 4:18pm
post #22 of 26
Quote:
Originally Posted by MikeRowesHunny



We don't get too many of those here though do we?! I think my average serving number for wedding cakes is 50-60 icon_rolleyes.gif ! I particularly find the people funny who want a 3-tiered cake for 25-30 people - okaaaaaaaaay then icon_rolleyes.gificon_confused.gif !




In the past two years I noticed that my average serving number has gradually changed for the better. It is now around some 100 servings per wedding. I think it is due to the fast amount of people with a different culture that are used to having bigger weddings. Last year, I did three Indian weddings, three Chinese weddings and seven or eight Moroccan/Turkish weddings. All of those were 150+. The Indian ones were the biggest, with 325 and 500+. I prefer the ones between 100 and 150, it enables you to build quite a big cake without any difficulty. To be honest, the Indian weddings were a thrill but also gave a lot of stress icon_surprised.gif (mostly between the ears). The fun actually only starts AFTERWARDS when I look at my bank account icon_lol.gif .

And I really don't like the 30 people/6 tier requests. It is the main reason why I changed the minimum order size to 50 this year. The smallest one I did last year was a main cake serving six, with 22 cup cakes thumbsdown.gif

mireillea Posted 20 Jan 2010 , 4:23pm
post #23 of 26
Quote:
Originally Posted by Kitagrl

I generally do not understand dummies...but then I only dock $1/serving for a dummy because its still the same work, and the same icing/fondant!




I never, ever do dummies. I hate dummies. I sell cakes, not dummies, that's how I feel. It's like MikeRowesHunny says, it is the same amount of work, same decorations etc.

joyfullysweet Posted 20 Jan 2010 , 4:30pm
post #24 of 26

Makes sense to me. I mean, why would you pay for something you can't use? Everyone loves cake, send it home with them...instant favors! lol

indydebi Posted 20 Jan 2010 , 5:45pm
post #25 of 26
Quote:
Originally Posted by joyfullysweet

Makes sense to me. I mean, why would you pay for something you can't use? Everyone loves cake, send it home with them...instant favors! lol


I know!!! No such thing as "too much cake!" icon_biggrin.gif

DelectabilityCakes Posted 20 Jan 2010 , 6:21pm
post #26 of 26
Quote:
Originally Posted by indydebi

Quote:
Originally Posted by joyfullysweet

So indydebi, I just read your blog. What a wonderful resource! Let me see if I understood you correctly. You have a set price of $3.50 per serving and that's what you charge unless they add extreme details such as gumpaste flowers or figures? So I guess my next step would be to figure out an average price I should charge per slice (factoring in prices of ingredients, labor, etc.). I'm sure prices will change by the time I'm ready to open for business, but I just want to get a sense of where I should be headed.

Yep, $3.50 flat pricing. I really only had 5 or 6 designs that I charged some nickels-n-dimes on, so it always worked out and brides liked having just a flat price to deal with. It worked well for me.




What about a 4 tier buttercream with designer stencils in royal icing?
Vs.
A 4 tier buttercream with chocolate fondant embroidery?
Vs.
A 4 tier buttercream with stencils and fondant embroidery on separate tiers?
Vs.
A 4 tier fondant with stencils and embroidery alternating + gum paste flowers.

I have 3.00 buttercream, 4.00 fondant, and 5.00 for gumpaste/marzipan (as a rough estimate until I see how my prices compare to the area)

What about when it's a red velvet & cream cheese cake
Vs.
Say a cake that has lemon curd, lemon merigune or mousse, plus buttercream + decorations if any.. (which costs more to make)

So what you're saying, IndyDebi, is that you basically charge the price of the most time consuming ingredient wise cake for even the cheapest plain cake?

It's just the art that ups the price as far as the customer is concerned because you're already covered so that no losses will occur?

Does anyone ever notice this on say a menu or listing of your product how everything costs the same even if it seems like it would cost more?

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