Undercharge Queen :(

Decorating By nicoles0419 Updated 19 Feb 2010 , 1:25pm by costumeczar

nicoles0419 Posted 14 Feb 2010 , 5:57pm
post #1 of 70

I feel like I undercharge people all the time, on one hand I think my cakes aren't good enough to charge that much, on the other I'm making $10 off a cake that took me hours to do. Say a 2 tier (6 inch and 9 inch) with some fondant accents I charge $35, I wanna charge more but an afraid people will say forget it then and go to walmart and get a cheaper cake, I have never charged more than $125 and that was for a wedding cake icon_cry.gif I think I need to suck it up and start charging more, I'm just really bad at pricing, and I hate when friends say "how much would it cost for ME" so I feel like I need to cut a deal thumbsdown.gif

69 replies
pacable Posted 14 Feb 2010 , 6:03pm
post #2 of 70

I'm right there with you. I thinks it's really hard to put a price on yourself and believe that your work is worth it. Everybody tells me I should charge more but I feel the exact same as you

Eisskween Posted 14 Feb 2010 , 6:14pm
post #3 of 70

Ditto, I'm doing a five-tier in the fall and I agreed to $300. Friends of mine wanted to slap me, but at least I'm having fun doing it, I guess. icon_confused.gif

Kiddiekakes Posted 14 Feb 2010 , 6:19pm
post #4 of 70

I think your cakes are good enough to definetly charge more....You kinda have to get a thick skin and believe in your talent and cakes..Once you feel worthy you will learn to charge more.When I first started out I way uncharged also..I think we all have...but as I have progressed and learned over the years and added more details and technique..I have come to learn that when it takes me hours to bake,color icings,make embellishments,airbrush order supplies...I have determined my time is worth way more than $5.00 and hour....Yes you will always have some people who make comments like "I would never pay that for a cake" but there are people that will....first find a pricing structure and stick to it..that is the key..If friends ask what will you charge...it is xx amount of dollars per serving and fondant etc..is extra over and above...Once you have a pricing structure....It gets easier quoting and feeling good about it and if they say No Thanks..then so be it!!

costumeczar Posted 14 Feb 2010 , 6:25pm
post #5 of 70

If you think about everything that goes into a cake, you're probably losing money. What about the electricity to bake them, the gas to go shopping for ingredients, the boards, dowels, boxes, etc. I'm assuming that you're not a legal business, but if you ever do decide to be one you'll also have to get licensed and insured.

If your boss at your full-time job asked you to work for him for $2 an hour, would you do it? What if he said "but would you do it for ME?" That's essentially what you're doing when you give your friends a "break" on the price. Figure out how much your time is worth to you, and charge for it. If someone gets mad at you because you won't work for them for ten cents an hour, then they're not your friend, they're just trying to take advantage of your lack of a backbone. If you don't value your time and effort, neither will they.

indydebi Posted 14 Feb 2010 , 6:27pm
post #6 of 70

First, know that no matter how long we've been doing it, most of us don't like the pricing part of this either.

And you probably didn't make $10 on that cake. I'm betting you didnt' figure gas to pick up supplies, the spike in your electric bill, use of paper towels, wax paper, parchment paper, clean-up-soap, cost of any ingredients you already had at home (which usually doesn't get added in because "...I had that on hand anyway", forgetting it didn't land in their cabinet for free to start with), and all of the little things that most people dont' add in. What I see on CC frequently are cakers will go to the store, buy the supplies and figure anything over that is profit. NOT!

Second, the phrase that pops out is that you are "afraid" they will go to walmart. Uh......so? It is NEVER ok to take an order that puts you in the red than it is to turn down an order that you'll spend 6 hours on and NOT make any money. You're actually money ahead if you tell them "no".

As little girls, women are taught to "be nice" and not to "cause trouble", so that as adults we are "afraid" that people won't like us unless we make THEM happy .... and they will be VERY happy if we give them a free cake.

But you are absolutely right on one thing ... you need to "suck it up" and start charging for your talent! WHen a friend says "I can get it at walmart cheaper, you have a couple of optional come-backs. (1) "No you can't because walmart doesn't make cakes like I do" (2) Oh, well, if all you want is a generic sheet cake, then walmart would be your best bet."

Another thing I've seen folks on here do is give their friends a "deal" of "you buy the stuff and I'll only charge you $10/hour for my baking/decorating time." GET THEM TO AGREE TO THIS BEFORE GIVING THEM THE LIST!! icon_twisted.gif

Then .... Give them a list of EVERYTHING you will need. AND the stores they need to get it at. Be sure to mark it "No brand substitutions permitted due to quality and the impact on the final cake". It's great if you can give them 2 or 3 different places to go and make them run all over town. icon_twisted.gif List things like "roll of parchment paper, box of disposable decorating bags, package of wooden dowel rods".

Tell them how it will take you AT LEAST 6 to 12 hours, so the labor charge will be in the $60 to $120 range.

OR ..... they can just pay you the $125 normal fee you charge everyone else! icon_twisted.gif

YOu'll get better at it ... we all do. It just takes a few trips to the Big Girl Panties dept of "Cake Balls R Us" store! thumbs_up.gif

AmandaLP Posted 14 Feb 2010 , 6:31pm
post #7 of 70

I am probably in the same boat as you icon_smile.gif

For your friends, why not break it down? Say something like "The cake itself costs me X in ingredients, and I spend Y hours doing it, how much would you suggest I sell it for?"

Galler Posted 14 Feb 2010 , 6:34pm
post #8 of 70
Quote:
Originally Posted by indydebi

Then .... Give them a list of EVERYTHING you will need. AND the stores they need to get it at.




I love this! Can I have them cart around my two kids (one is 4 yrs and one is 4 months) like I do as well? icon_wink.gif

bobwonderbuns Posted 14 Feb 2010 , 6:43pm
post #9 of 70

When I first started I was bad at undercharging (and to this day my pricing is my weak link) but I never felt bad about it -- because I look at undercharging as tuition. That's right, tuition. For every cake I undercharged on, I learned something so valuable that it was worth the price I gave up for that knowledge. In turn I'm a much better cake decorator than I would have been and I have the benefit of not repeating those same costly mistakes. Try looking at it from that point of view. I find it very helpful. icon_biggrin.gif

indydebi Posted 14 Feb 2010 , 6:48pm
post #10 of 70
Quote:
Originally Posted by Galler

Quote:
Originally Posted by indydebi

Then .... Give them a list of EVERYTHING you will need. AND the stores they need to get it at.



I love this! Can I have them cart around my two kids (one is 4 yrs and one is 4 months) like I do as well? icon_wink.gif




icon_lol.gificon_lol.gif You can call it the Bonus Plan! icon_lol.gificon_lol.gif

colleenant Posted 14 Feb 2010 , 7:39pm
post #11 of 70

You can be confident in charging more than Walmart or any other supermarket because I'm sure the taste, look and customer service is way beyond that. If people are going to get walmart cakes they only look at price, so they are not your customer. You want the people that want that unique, personal cake; those are the people who will pay what you're worth. Walmart is mass produced; you are custom. You cannot think of them as your competitor.

Deb_ Posted 14 Feb 2010 , 8:17pm
post #12 of 70

Nicoles0419 If you don't even value your cakes then why should your friends and clients?


People who expect you to give away your cakes because they're your "friend" are not really your friend.


If you're serious about making this a "business" then lay down the ground rules now. When I was finally a "legal" business, I sent out an e-mail to my family/friends that had received free cakes from me for over 20 yrs.

I thanked them for allowing me the pleasure to *practice* my cake skills on them and mentioned that now that I was legally a business that I had business expenses. I enclosed a price list.

They all got the message and never has one of them expected a "deal" from me.

People can only take advantage of us if we allow them to. Do it in an e-mail if it's easier for you, but you need to set people straight right away. $10 profit is unbelievable to me.....you are worth more then that.

kellikrause Posted 14 Feb 2010 , 11:11pm
post #13 of 70

Indydebi--you are always right on!!
I just set up a price sheet for myself, and it is on the low side, but I at least have it and will stick to it. I just made a 3 tier for free as a special thing at church, I volunteered so that was my choice. I had tons of fun doing it, everyone loved it and I was so happy to make something special for this family. In appreciation they gave me $100 gift card to a cool downtown resturaunt. I was so thankful! I want to use this "talent" to bless people, but need to make sure I am not losing money in the process.

pattycakesnj Posted 14 Feb 2010 , 11:27pm
post #14 of 70

A lot of us were in the same boat as you one time or another, me included. Once you start to undercharge, it is harder to charge what you are really worth. After reading so many posts on the subject, I instituted a pricing policy in January since I was way underpriced. Now I stick with it and it works. Ok, some people say "I'll get back to you" and never do but others have placed their orders without a quibble about price. Good luck

cownsj Posted 14 Feb 2010 , 11:28pm
post #15 of 70

I delivered a cake today and had the supermarket pricing come my way. But I have to say, I was not expecting this one little bit. The cake was for a 16 year old boy, they wanted a grand piano, and I did borrow my design from someone here on CC.

The parents came over to me after seeing their sons reaction and then having some. His dad said, now THIS is why you pay this kind of money for a cake, you just can't get this kind of taste and quality from a supermarket cake, or a Walmart cake, or a Costco cake..... And you certainly can't get a design like this.

Literally, all I kept thinking about were the postings about all the comments and concerns everyone has and the dealing with people who want quality cakes at Walmart prices. You were all in my head at that moment.... lol And I thought, this is great, this is how a customer should be seeing it.
Today was a good cake day icon_biggrin.gif

tyty Posted 14 Feb 2010 , 11:29pm
post #16 of 70

When you are so tired you could cry and still broke because of the things you did not factor in, you will not be afraid to charge what it's worth.

nicoles0419 Posted 15 Feb 2010 , 3:59am
post #17 of 70

Thanks everyone for the advice. I need to start by figuring how much it cost me to make a cake before I start throwing numbers out there for people. I just started making cakes this year so I'm still trying to build up my clients, which is why else i think I undercharge I feel like any cake I can do at this time is good, If I can make a cake for a birthday hopefully I can book 3 or 4 off of that one so if I did undercharge it would be worth it in the end becuase my name would get out there and I would get more business, but I am def. going to charge more after talking to everyone, thank you

Deb_ Posted 15 Feb 2010 , 4:13am
post #18 of 70
Quote:
Originally Posted by nicoles0419

Thanks everyone for the advice. I need to start by figuring how much it cost me to make a cake before I start throwing numbers out there for people. I just started making cakes this year so I'm still trying to build up my clients, which is why else i think I undercharge I feel like any cake I can do at this time is good, If I can make a cake for a birthday hopefully I can book 3 or 4 off of that one so if I did undercharge it would be worth it in the end becuase my name would get out there and I would get more business, but I am def. going to charge more after talking to everyone, thank you




Please check licensing requirements in your area before growing your client base. Selling a cake to a friend is one thing but getting 3 or 4 orders from strangers is where it gets complicated.

I remember k8memphis who lives in TN, telling us about a couple of cake buddies she knew that were turned in to the HD for selling cakes out of their homes without a license. Just be careful.

saffronica Posted 15 Feb 2010 , 4:15am
post #19 of 70

Here's my way of handling the friends who think they deserve a discount: I figured out what I wanted to be making, then added 25%. Then I tell them that they get the 20% "Friends and Family" discount, which brings it back down to the original price point. Since I don't sell to anyone except friends and family, everyone gets the discount -- but they don't know that. They all feel special (especially the ones I don't know that well, like my husband's coworkers), so they usually add on a tip!

nicoles0419 Posted 15 Feb 2010 , 4:19am
post #20 of 70

ugh I love those that tip lol it doesnt happen much but when it does its a nice surprise, and a boost to my cofidence like "wow they really liked that cake" since I undercharge ne ways lol

indydebi Posted 15 Feb 2010 , 9:31am
post #21 of 70
Quote:
Originally Posted by nicoles0419

If I can make a cake for a birthday hopefully I can book 3 or 4 off of that one so if I did undercharge it would be worth it in the end ....


unless those 3 or 4 book you because the hostess told them how cheap you were.

Bluehue Posted 15 Feb 2010 , 10:26am
post #22 of 70
Quote:
Originally Posted by indydebi

.

As little girls, women are taught to "be nice" and not to "cause trouble", so that as adults we are "afraid" that people won't like us unless we make THEM happy .... and they will be VERY happy if we give them a free cake.




How very true thumbs_up.gif

So, to rectify this problem this is what we do.

WE go in front of the mirror standing in our normal stance -and WE say.

Can you make me a cake for 50 people and i only want to pay $xx.xx

Now - *sucking it up* with back and shoulders staight - we tilt our head on the side - just a tad as tho hard of hearing - and we say....OUTLOUD.

Awwweeee.....................NO
Because my cakes are made to suit your oder.
My prices are $x.xx per serving.

However - if you race down to xxxxxx i am sure you could pick up a something made yesterday for that.

It might take a few turns in fromt of the mirror, but you will learn that if you can't be kind and true to yourself - then you can't be polite and honest to others.

It is in every women to *be nice* - that is how we are geared - as Indydeb said

But until such time as someone comes into this world a different way to the rest of us - and leaves this world by *other means* then we are no more and no less than anyone else.

So WE have to learn to *suck it up* and be true, honest and kind to ourselves - that way, WE like who we see in the mirror alot more.


*suck it up* - lolllllllllllllllllll
Never used that termanology before - but very apt for this post - thumbs_up.gif


Bluehue.

Evoir Posted 15 Feb 2010 , 10:51am
post #23 of 70

A very old friend of mine has asked me to do a cupcake tower for her 40th birthday coming up. She was prepared to pay for it - as she needed cake anyway. The deal I made her was for her to cover the ingredient costs, and I would supply the labour for free as a GIFT to her (ie I will not buy her anything else for her birthday). I think this is fair, but as it was MY suggestion I am more than happy to do it this way.

What I really hated when I first started out in this business, was how certain acquaintances thought that referring people to me to do them a cake for next to nothing was "doing you a favour, as it was giving you more experience". Hmmmm, yes, thanks for looking out for my professional development on my behalf!

I can only say it gets easier with time. Especially when you get really busy. When I get the typical 'last minute' cake client, one of the first things I say to them is (for example), "okay, so your having 50 guests, and for the kind of cake you want I charge from $4.00 per dessert-sized serving, so you are looking at approximately $200 - $250 depending on how ornate you would like it decorated (etc)..." Its interesting how most of these muggles never call/email back with the details, even though they were so "desperate" for the cake...

learnincakes Posted 15 Feb 2010 , 12:21pm
post #24 of 70

My Sister wanted me to do a Baby Shower Cake for her friend. I don't know her friend. I did and asked her to pay for the ingredients. $20. I made her an invoice for $120 and gave her a Sister discount of $100. She loved the cake I gave her the invoice and she about fell over. She was shocked that I would charge that much for a cake. I wanted her to know exactly what this cake would cost her if she had to pay for it, I knew she would be back for more $20 cakes if I didn't. It is the blue clothes line shower cake in my photos. Well, sure enough she came back for more, she wanted a birthday cake for free for her friend with 2 days notice. She thought it would be great practice for me. I am glad she thought so, I could do it for my portfolio she said. I just laughed! Uhhh no, I said. I used the 2 days notice as an excuse not to do it. Then a little later she hinted for another birthday cake for a friend, by then it was easy to say I do not turn on my oven for less than $50. anymore. Of course she was not interested in paying $50.
Long story short, I give cakes away all the time that I make for practise, but, I decide who I give them too. I like to give them to the homeless shelters or to someone whom I know could never afford a cake like that. It makes me feel good to do that. If it does not make me feel good I do not do it. Family or not.

learnincakes Posted 15 Feb 2010 , 12:23pm
post #25 of 70

My Sister wanted me to do a Baby Shower Cake for her friend. I don't know her friend. I did and asked her to pay for the ingredients. $20. I made her an invoice for $120 and gave her a Sister discount of $100. She loved the cake I gave her the invoice and she about fell over. She was shocked that I would charge that much for a cake. I wanted her to know exactly what this cake would cost her if she had to pay for it, I knew she would be back for more $20 cakes if I didn't. It is the blue clothes line shower cake in my photos. Well, sure enough she came back for more, she wanted a birthday cake for free for her friend with 2 days notice. She thought it would be great practice for me. I am glad she thought so, I could do it for my portfolio she said. I just laughed! Uhhh no, I said. I used the 2 days notice as an excuse not to do it. Then a little later she hinted for another birthday cake for a friend, by then it was easy to say I do not turn on my oven for less than $50. anymore. Of course she was not interested in paying $50.
Long story short, I give cakes away all the time that I make for practise, but, I decide who I give them too. I like to give them to the homeless shelters or to someone whom I know could never afford a cake like that. It makes me feel good to do that. If it does not make me feel good I do not do it. Family or not.

jammjenks Posted 15 Feb 2010 , 1:28pm
post #26 of 70
Quote:
Originally Posted by pattycakesnj

A lot of us were in the same boat as you one time or another, me included. Once you start to undercharge, it is harder to charge what you are really worth. After reading so many posts on the subject, I instituted a pricing policy in January since I was way underpriced. Now I stick with it and it works. Ok, some people say "I'll get back to you" and never do but others have placed their orders without a quibble about price. Good luck




Patty, I could've written this exact post. Sounds just like me.

To OP - you won't believe how liberating it is to charge more and have people tell you WM is cheaper. Last time someone told me that, I looked them in the eye with a smile and said, "Good. They should be." That customer went to WM and I made cakes for that weekend for people who appreciated them.

ThreeDGirlie Posted 15 Feb 2010 , 1:59pm
post #27 of 70

A note to the people that mentioned lower pricing to "build your client base":

Do you realize how hard it is to go from bargain basement pricing to REAL pricing with the same people? If people are just looking for a deal, once you raise your prices, your clients are gone, and you have to go after a new client base - you're back at square one - but you've wasted a lot of time, and incurred a lot of lost opportunity cost along the way - when you could have sold one cake for $100, you sold 3 cakes for $30, and probably lost money on the 3 cakes along the way!

Then there's the "If I get 3-4 orders from one cake, it's worth not making money on that cake"... Well, you better hope that the hostess of the money losing cake didn't tell her friends what kind of pricing you gave her, or they're all going to expect the same. And, Im going to throw this in there, unless its a HUGE cake, you can expect 2-3 referrals from a cake, translating into MAYBE one order.

Does that mean you can't cut a deal for a friend? NO, of course you can! But what you *should* do is tell your friend that they are getting a special discount because they are your friend and you want to make their special cake... Then tell them the real price you would charge anybody else for the cake, in case somebody asks them. This way you are covered, and you are only being referred business from clients that are willing to pay realistic prices.

djs328 Posted 15 Feb 2010 , 2:05pm
post #28 of 70
Quote:
Originally Posted by indydebi



YOu'll get better at it ... we all do. It just takes a few trips to the Big Girl Panties dept of "Cake Balls R Us" store! thumbs_up.gif




OMG!!!!! ROFL!!! I think I need to just come on here and read all Debi's posts first thing in the morning just to have a good laugh! Debi - you could write a book, (just for cake people! icon_wink.gif ) with all your sayings! Cake balls!!! Love it!! icon_smile.gif (The best part is there is so much truth to all of it!)

learnincakes Posted 15 Feb 2010 , 2:07pm
post #29 of 70
Quote:
Originally Posted by ThreeDGirlie

A note to the people that mentioned lower pricing to "build your client base":

Do you realize how hard it is to go from bargain basement pricing to REAL pricing with the same people? If people are just looking for a deal, once you raise your prices, your clients are gone, and you have to go after a new client base - you're back at square one - but you've wasted a lot of time, and incurred a lot of lost opportunity cost along the way - when you could have sold one cake for $100, you sold 3 cakes for $30, and probably lost money on the 3 cakes along the way!

Then there's the "If I get 3-4 orders from one cake, it's worth not making money on that cake"... Well, you better hope that the hostess of the money losing cake didn't tell her friends what kind of pricing you gave her, or they're all going to expect the same. And, Im going to throw this in there, unless its a HUGE cake, you can expect 2-3 referrals from a cake, translating into MAYBE one order.

Does that mean you can't cut a deal for a friend? NO, of course you can! But what you *should* do is tell your friend that they are getting a special discount because they are your friend and you want to make their special cake... Then tell them the real price you would charge anybody else for the cake, in case somebody asks them. This way you are covered, and you are only being referred business from clients that are willing to pay realistic prices.


I totally agree! I have worked for the last 25 years. Never worked for free and don't intend to do it now. The time and effort that goes into one of these cakes, people just don't realized what it takes. It has taken me over a year just to get the tools I need. If I started selling lots of cake even at say 4.00 per serving how long would it take me to recover my investement in tools alone. Who knows.

jessielou Posted 15 Feb 2010 , 2:19pm
post #30 of 70

This is SO me!!! And I hate myself for it icon_mad.gif Charging is my biggest problem! Im a total people pleaser and big fat chicken! thumbsdown.gif I would actually be happy to make ten bucks off a cake as i usually barely brake even (IF i do!) I am just starting out so I kinda feel like I shouldnt be charging that much. As others have said I just dont think my cakes are good enough to be charging as much. And I DEFINITLY have a hard time when its a good friend. Im doing a wedding cake for a friends daughter in may and have been procrastinating on giving her a price.. icon_sad.gif Its four teirs with bc and fondant accents for 150 ppl. Is 200 fair?

Quote by @%username% on %date%

%body%