Why Can't We Charge Like Mechanics Or Lawyers???

Decorating By katerpillrgrl Updated 24 Feb 2010 , 6:58am by itsacake

katerpillrgrl Posted 23 Feb 2010 , 6:45am
post #1 of 33

Can we have a serious discussion about why it's industry practice to charge by the slice? It would seem to make more sense to me to charge by the hour. Estimate the hours + supplies/overhead = cost or like an artist, create the work then decide what it's worth or estimate beforehand what it will be worth overall....no?

What are your thoughts??

32 replies
Bfisher2 Posted 23 Feb 2010 , 6:50am
post #2 of 33

Im all for it.... Ive always dreamed of a nice castle on the coast of Ireland...*LOL*

katerpillrgrl Posted 23 Feb 2010 , 6:55am
post #3 of 33

haha bfisher! but seriously, what's this whole mess about charging per slice? who started it and why?

Looking for a devil's advocate for why we can't charge by the hour like a consultant or something....

Some of us are even on retainers....like those that have corporate accounts yes? why not other means?

mcaulir Posted 23 Feb 2010 , 8:26am
post #4 of 33

I guess that would mean that as you got better, and therefore quicker, you would make less.

mcaulir Posted 23 Feb 2010 , 8:46am
post #5 of 33

I guess that would mean that as you got better, and therefore quicker, you would make less.

julzs71 Posted 23 Feb 2010 , 9:34am
post #6 of 33

let take duff as an example. how do you say i charge 300 an hour? You don't. You say my minimum is 1000. for x ammount of servings.

WendyB Posted 23 Feb 2010 , 2:54pm
post #7 of 33

I think most bakers have factored their hours worked into their per slice pricing. People want to know the price ahead of time and unless you give a "firm estimate" of the hours in your consult/quote I think (especially brides) just wouldn't be able to budget.

Cake is not an unexpected repair, but a planned celebration. People will shop and need to know the actual price.

You're free to charge any way you like.

katerpillrgrl Posted 23 Feb 2010 , 2:56pm
post #8 of 33
Quote:
Originally Posted by mcaulir

I guess that would mean that as you got better, and therefore quicker, you would make less.




Yeah but you would also charge more. You can make more cakes, more money, etc.

katerpillrgrl Posted 23 Feb 2010 , 3:03pm
post #9 of 33
Quote:
Originally Posted by WendyB

I think most bakers have factored their hours worked into their per slice pricing. People want to know the price ahead of time and unless you give a "firm estimate" of the hours in your consult/quote I think (especially brides) just wouldn't be able to budget.

Cake is not an unexpected repair, but a planned celebration. People will shop and need to know the actual price.

You're free to charge any way you like.




You can give a "firm" estimate of the hours in your quote. It doesn't have to change. If you misquote that's their gain or your loss. Either way, it evens out because either ou get better at quoting time (if you don't already know how long it will take you to make a cake. I do and I think most of us do) or you really make sure to complete your work within the given time frame. By giving them hours rather than per slice it appears you are charging them for what they really are paying for LABOR, NOT CAKE. It breaks down the price to the point where brides now understand, "oooooh so the cake really is worth x dollars because it's the time I'm paying for, not the flour, sugar and water used to make the cake."

Edited to say: It also would seem more fair to the cakemaker because say the bride decides she wants a smaller tier at the top, 6" instead of 8," (for some calculations that 8 less slices). If you charge $3 a slice you are making $24 less and it may be a gain in only 20 minutes of your time. It will still take nearly the same amount of time to bake and decorate that tier as the larger one, yet you are making less money, possibly a lot less if you charge $3+ a slice. You spend more time and make less, hmmmm doesn't sound like good business....

I realize I can charge however I'd like but I wanted to draw out reasons I should charge by the slice. I appreciate your comments and anyone else who'd like to play devil's advocate. I'm all ears!!! icon_smile.gif

ccr03 Posted 23 Feb 2010 , 3:12pm
post #10 of 33

I would so not charge by the hour! As I develop my skills, I'll get faster and take LESS time to work on something. I'm not going to charge less just because I'm faster and better now. I will increase my prices though because they'll be getting higher quality products.

Kat D Von from LA Ink said once, tattoos are charged depending the tattoo. She can whip out tattoos fast, but they are still going to be more expensive because you are paying for the artistry.

Donnagardner Posted 23 Feb 2010 , 3:17pm
post #11 of 33

Technicians (mechanics) charge according to a book of published times it should take to do a particular job. If they get better (faster) the charge is still the same and they make more money BUT if they are slower it is still the same charge from that book and they lose money. This is the industry standard of MOST professional technicians.

katerpillrgrl Posted 23 Feb 2010 , 3:18pm
post #12 of 33
Quote:
Originally Posted by ccr03

I would so not charge by the hour! As I develop my skills, I'll get faster and take LESS time to work on something. I'm not going to charge less just because I'm faster and better now. I will increase my prices though because they'll be getting higher quality products.

Kat D Von from LA Ink said once, tattoos are charged depending the tattoo. She can whip out tattoos fast, but they are still going to be more expensive because you are paying for the artistry.




Right but that's where you charge more per hour, take more orders for cake because you are faster and make more money, etc. All I'm saying is I don't see how the per slice method got so popular. It doesn't seem to be fair to the cake designing industry in calculating profit margins. I wonder if that contributes to the reason most of us don't get paid what we're worth.

TexasSugar Posted 23 Feb 2010 , 3:26pm
post #13 of 33

You have to factor in that not everyone does things in the same amount of time. Those in a comercial bakery that have the large ovens can bake more cakes in the same amount of time someone in there kitchen with a regular oven can. Does that mean they should charge less while doing more work?

People that have been icing a cake for years can ice it alot quicker than someone that is still working toward their first 100th cake. Does that mean the person with experience of doing hundreds of cakes should take a cut because they can do it in a faster time?

Personally, when ordering a cake, (we had this discussion recently) I want a number to build off of. I would much rather be told my cake is going to be $4 per serving, rather than $2 per serving plus $10 an hour for 12 hours work.

I do fully believe that some items (such as hand painted work) do add on to the total. And you can white a clause in to cover those situations.

Of course we want Bride's and every day people to understand that cakes are more than flour and sugar and involve talent and alot of work. In that perfect world I guess. As it stands there are many with family that don't even understand the process.

Yes there are people like plumbers and mechinacs that do add a labor charge. But you also have other occupations that just give you one flat rate based off what you need.

katerpillrgrl Posted 23 Feb 2010 , 3:26pm
post #14 of 33
Quote:
Originally Posted by ccr03

Kat D Von from LA Ink said once, tattoos are charged depending the tattoo. She can whip out tattoos fast, but they are still going to be more expensive because you are paying for the artistry.




Oh so wait then what Kat D is saying is charge for a work of art based on the overall piece? not by number of strokes of the tattoo needle or the amount of time it took? Charge one price (unitemized) based on the anticipated detail of work? So how about this method for cake pricing then?

ccr03 Posted 23 Feb 2010 , 3:42pm
post #15 of 33

Well, see at this point you aren't charging per hour nor per slice. You are charging per project. Unfortunately, this really can't be done from the get go because beginners don't know how to charge accordingly. The slice method helps provide some sort of consistency for for the creator and the customer.

I see that you are saying, but the slice method is only unfair if you don't know how to work.


(just playing devil's adovate icon_wink.gif

ccr03 Posted 23 Feb 2010 , 3:49pm
post #16 of 33

aw, but see now that is the extreme (which we do see in this industry - $20 for a bead border, $50 for dragees, etc - you know what I'm taking about).

But the Kat D Von reference was in regards to the hourly wage.

(man this is fun! Even though I should be working icon_smile.gif

cakesdivine Posted 23 Feb 2010 , 3:52pm
post #17 of 33

You can always create a design and say "this cake costs X amount of dollars" The problem comes when a client says "well I like this design but I need a smaller version with less servings" or just the opposite "this design is too small can we add a tier or two to accommodate all the servings we will need?" Servings are what clients are mainly interested in. They need to know that what they are getting will serve all their guests. Catering is done the same way, you are given a price per person/serving and told what elements are included in that price. It is just an easier way to relay to the client what they need in terms of price. So if you make a design and state it has a particular price you limit your ability to adapt to the serving needs of the client for that design, you then will have to figure out how much to remove from the price or add to the price to accommodate the fewer or extra servings...and how do you propose to do that if you don't have a per serving rate?

katerpillrgrl Posted 23 Feb 2010 , 4:22pm
post #18 of 33
Quote:
Originally Posted by TexasSugar

You have to factor in that not everyone does things in the same amount of time. Those in a comercial bakery that have the large ovens can bake more cakes in the same amount of time someone in there kitchen with a regular oven can. Does that mean they should charge less while doing more work?

People that have been icing a cake for years can ice it alot quicker than someone that is still working toward their first 100th cake. Does that mean the person with experience of doing hundreds of cakes should take a cut because they can do it in a faster time?

Personally, when ordering a cake, (we had this discussion recently) I want a number to build off of. I would much rather be told my cake is going to be $4 per serving, rather than $2 per serving plus $10 an hour for 12 hours work.

I do fully believe that some items (such as hand painted work) do add on to the total. And you can white a clause in to cover those situations.

Yes there are people like plumbers and mechinacs that do add a labor charge. But you also have other occupations that just give you one flat rate based off what you need.




The experienced person and the commercial bakery would not take a cut. They'd make more per hour.

katerpillrgrl Posted 23 Feb 2010 , 4:31pm
post #19 of 33
Quote:
Originally Posted by cakesdivine

You can always create a design and say "this cake costs X amount of dollars" The problem comes when a client says "well I like this design but I need a smaller version with less servings" or just the opposite "this design is too small can we add a tier or two to accommodate all the servings we will need?" Servings are what clients are mainly interested in. They need to know that what they are getting will serve all their guests. Catering is done the same way, you are given a price per person/serving and told what elements are included in that price. It is just an easier way to relay to the client what they need in terms of price. So if you make a design and state it has a particular price you limit your ability to adapt to the serving needs of the client for that design, you then will have to figure out how much to remove from the price or add to the price to accommodate the fewer or extra servings...and how do you propose to do that if you don't have a per serving rate?




Makes sense. I appreciate the feedback. I agree we do need that flexibility, but how do you solve the issue of being properly compensated for the level of detail and work we put in a cake? Per slice may be adequate for some but I wonder if there is a lot of money left on the table because it's not the most cost-effective, price-efficient way to sell this consumable artwork.

ShiaCakes Posted 23 Feb 2010 , 4:37pm
post #20 of 33

When it's all said and done, I'm at about $40 an hour.

rachpizano Posted 23 Feb 2010 , 4:57pm
post #21 of 33

Regardless of how you charge. You charge what the cake it worth period. For our wedding cakes we do charge by the slice but if the bride starts asking for special pieces like sugar flowers or shells or whatever else. We add extra to the cake price. For 3D pieces we charge pretty much by the house because they are so time intensive. I dont get into major details with clients why we charge what we charge. However I dont just throw out a price either. Every large cake is taken into consideration and priced according to size, detail, and time it will take to create the piece. Regardless of how I break it down to a client, I'm going to charge what that cake is worth. I'm not working for free anymore!!

TexasSugar Posted 23 Feb 2010 , 5:04pm
post #22 of 33
Quote:
Originally Posted by katerpillrgrl

The experienced person and the commercial bakery would not take a cut. They'd make more per hour.




So in the long run it all factors out, just like factoring in the hourly wage into the price per serving or the price per cake so that the cost per cake/serving represents everything going into the cake.

Those that own a business will tell you that it isnt just the ingredients and the time they spend on the cake that factors into their price. They have to consider what their cost of operation is, and how much they have to make on a cake to make money, not just cover the ingredients and hourly wage, but have money to pay the bills as well.

My family does roofing. When people call us to ask what our price per square is, we tell them we have to come look at the roof. Yes how many squares it is, factors in, but also how steep it is, our employee wages, insurance and so on. When they get our estimate in the mail we don't show how all these numbers come into play. They just get the total what it would cost for the roof to be re-roofed.

I think when you get into using and showing different numbers to get to the final price it opens things up for people to want to talk you down on your price. "Oh so your ingredients are $50, can you not buy them cheaper?" "What if it only takes you 9 hours instead of 10, do I get a discount for that?"

Plus just because we in the cake world feel we deserve $10, $15 or $20 an hour, doesn't mean I really want to the consumer to know how much per hour I make or how much profit I get from the cake. Isnt that personal information?

costumeczar Posted 23 Feb 2010 , 5:11pm
post #23 of 33

I have a per-cake charge, not per slice. I don't care if they get two servings or fifty out of a tier, it's all the same to me. I give the brides a range of servings that each cake will give them, and they can figure out whether they want a bigger or smaller cake.

That obviously will cover my time for the most complicated cakes. Anything that's faster is just gravy.

Renaejrk Posted 23 Feb 2010 , 5:35pm
post #24 of 33

You know, you could combine the best of both worlds. What about a per cake/design charge, then a per serving charge (which is low and covers the costs of the actual cake & supplies)! For example, if I make a 25 serving cake and everything costs me $18 for a BC cake and $25 for fondant, I could charge $.75/serving for BC and $1/serving for fondant (that is actual cost, you could raise it for profit if you wanted) - THEN add the cake charge which would depend on your design. That way you are fairly compensated on the difficulty of the design regardless on how big or small, but you still charge some based on its size. Just a thought! icon_smile.gif

cakesdivine Posted 23 Feb 2010 , 5:41pm
post #25 of 33
Quote:
Originally Posted by katerpillrgrl

Quote:
Originally Posted by cakesdivine

You can always create a design and say "this cake costs X amount of dollars" The problem comes when a client says "well I like this design but I need a smaller version with less servings" or just the opposite "this design is too small can we add a tier or two to accommodate all the servings we will need?" Servings are what clients are mainly interested in. They need to know that what they are getting will serve all their guests. Catering is done the same way, you are given a price per person/serving and told what elements are included in that price. It is just an easier way to relay to the client what they need in terms of price. So if you make a design and state it has a particular price you limit your ability to adapt to the serving needs of the client for that design, you then will have to figure out how much to remove from the price or add to the price to accommodate the fewer or extra servings...and how do you propose to do that if you don't have a per serving rate?



Makes sense. I appreciate the feedback. I agree we do need that flexibility, but how do you solve the issue of being properly compensated for the level of detail and work we put in a cake? Per slice may be adequate for some but I wonder if there is a lot of money left on the table because it's not the most cost-effective, price-efficient way to sell this consumable artwork.




Sent you a PM. Believe me, my per slice rates accommodate all the "extras" and my profit margin.

itsacake Posted 23 Feb 2010 , 6:37pm
post #26 of 33

I understand a "per serving price" differently. Each cake is priced individually as to number of servings and complexity of design.

Let's say you order a cake from me that is going to be 100 servings and I told you it would be $800.00 or $8.00 per slice. If you then come back and tell me you only need 90 servings, I'm going to tell you that you might as well take the 100 servings because since the decorations, the time, the overhead etc. are all the same the price per servings would go up to $8.80 per serving and you would save almost nothing. Better to have a little extra cake.

If the only thing changing for me is that I will spend $20.00 less on ingredients, then you don't get $80.00 off. That is not the way this is supposed to work.

sadsmile Posted 23 Feb 2010 , 7:21pm
post #27 of 33

The per slice is just like the mechanics parts used and the mechanic still charges labor... and labor should also be figured into cake making.

Smashme Posted 23 Feb 2010 , 7:47pm
post #28 of 33

I'm just thinking as a customer here, but when i would order a cake if they told me it was per slice price i would be just fine with that. If they told me they were going to charge per hour and then told me it was going to take X amount of time i would think they were nuts. Most people don't know how long it takes to make a cake, so they would think you were just trying to get more out of them. hope that makes sence.

cakesdivine Posted 23 Feb 2010 , 7:58pm
post #29 of 33
Quote:
Originally Posted by itsacake

I understand a "per serving price" differently. Each cake is priced individually as to number of servings and complexity of design.

Let's say you order a cake from me that is going to be 100 servings and I told you it would be $800.00 or $8.00 per slice. If you then come back and tell me you only need 90 servings, I'm going to tell you that you might as well take the 100 servings because since the decorations, the time, the overhead etc. are all the same the price per servings would go up to $8.80 per serving and you would save almost nothing. Better to have a little extra cake.

If the only thing changing for me is that I will spend $20.00 less on ingredients, then you don't get $80.00 off. That is not the way this is supposed to work.




Precisely why I also have incorporated price breaks on amount of servings into my price matrix. My most expensive per serving rate ($12) is a cake that serves under 100 and is the top level of decor/architecture and uses fondant, my least expensive per serving rate is a cake serving over 200 people that is a very basic buttercream cake that might include some inedible ribbons or other non edible decor. Or simply a basic border and some BC roses. ($2), so if you are close to the cusp of one of the price breaks then it might end up being more expensive to do fewer servings than more servings, so if someone wants less I quote them the price that is right there on my grid. If it is more they generally stick with the original choice, if money isn't the issue and they truly want less cake then they make the change to less servings. I still make more money off the more serving cakes in general than the under 100 serving sized cakes. because eventhough the price seem smaller per serving the profit margin x the amount of servings puts me right where I want my profit to be.

Texas_Rose Posted 23 Feb 2010 , 8:52pm
post #30 of 33
Quote:
Originally Posted by Smashme

I'm just thinking as a customer here, but when i would order a cake if they told me it was per slice price i would be just fine with that. If they told me they were going to charge per hour and then told me it was going to take X amount of time i would think they were nuts. Most people don't know how long it takes to make a cake, so they would think you were just trying to get more out of them. hope that makes sence.




Exactly.

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