Being Underbid - $0.50/serving

Business By nanaofmany Updated 5 Mar 2010 , 2:37pm by KHalstead

nanaofmany Posted 3 Mar 2010 , 2:47am
post #1 of 18

I just have a small part time cake business out of my home and I keep my prices very reasonable but lately when I get a few cakes lined up someone will come along and underbid me. How do I compete with someone who will do a fondant covered cake for $.50 per serving?

17 replies
Ursula40 Posted 3 Mar 2010 , 2:48am
post #2 of 18

You don't, they will give up paying someone to take a cake off their hands soon enough, latest when they are broke

BlakesCakes Posted 3 Mar 2010 , 4:27am
post #3 of 18

I won't do cupcakes for .50/each, let alone a fondant covered cake icon_eek.gif

All I can say is that you get what you pay for--and this sounds like bulk cake mix with just water added, crisco + PS + water with no flavoring, and Wilton fondant-------YUMMMMM-O

If you value what you do, you don't even want to think of someone who sells cakes for .50 a serving as your "competition". Heck, they're not even "competition" for Wal-Mart!

Don't worry--when they repossess her pans and tips for lack of payment, she'll go away......

Rae

indydebi Posted 3 Mar 2010 , 5:14am
post #4 of 18

Agree. Heck on a cake for 100, the fondant alone will cost her more than fifty bucks!

I learned this lesson during a phone call I was in on with a Marketing VP. One of our contracted sales rep firms was wanting us to go lower on our price. VP wouldn't do it. Sales rep said, "If you don't go down on this price, they are going to take this order to your competitor."

I was stunned and waited to see how VP would handle this because up to this point in my life, all I knew was "save the sale ... save the sale".

I was surprised and impressed when our VP said:

"You tell them for me .. and be sure to give them my name ... you tell them for me that *I* said Please ... oh PLEASE take this order to my competitor. Because at that price, I won't have to worry about them being my competitor for very long."

It was a life lesson that I've carried with me from that point forward .... and that was over 20 years ago.

sweetiesbykim Posted 3 Mar 2010 , 5:38am
post #5 of 18

$.50/serving?! I charged $1.00/serving in the mid 1980's!!

cakesbycathy Posted 3 Mar 2010 , 12:41pm
post #6 of 18
Quote:
Originally Posted by nanaofmany

I just have a small part time cake business out of my home and I keep my prices very reasonable but lately when I get a few cakes lined up someone will come along and underbid me. How do I compete with someone who will do a fondant covered cake for $.50 per serving?




When you say lined up, do you mean they place an order with you and then come back and cancel? If that's the case start charging a non-refundable deposit.

Also, you cannot compete with that price. You need to find some gentle way to remind these people that you get what you pay for.

karateka Posted 3 Mar 2010 , 1:59pm
post #7 of 18

Raise your prices.

This woman is not your competition. You don't want the client who is looking for the cheapest cake. Distinguish yourself from her by making the difference between yours and hers bigger, not smaller. The clients will think "...she's $xx more expensive...gotta be a reason..."

I know if I'm looking for something good, I won't buy the cheapest one out there. I'm looking for this pr of boots for my DH. They start at $44 and go up to $200. I'm not even considering the $44 ones....has to be a reason they are so much cheaper than the others. I'm seriously looking at the ones that are $130. Why? I want quality.

minicuppie Posted 3 Mar 2010 , 3:57pm
post #8 of 18

And don't be tempted to talk down the competition. Not worth the energy and makes you look catty. Move on.

Galler Posted 3 Mar 2010 , 4:07pm
post #9 of 18
Quote:
Originally Posted by indydebi

"You tell them for me .. and be sure to give them my name ... you tell them for me that *I* said Please ... oh PLEASE take this order to my competitor. Because at that price, I won't have to worry about them being my competitor for very long."




Love this! Thanks for sharing it!!!!

KHalstead Posted 3 Mar 2010 , 4:11pm
post #10 of 18

apart from the fact that I would NEVER charge $.50/serv. for even a cupcake (well, maybe a mini........maybe..)..........who would ORDER a cake that was $.50/serv. I mean that's 1/3 of what wal-mart charges.......you know that can't be good eats!

Florimbio Posted 3 Mar 2010 , 4:23pm
post #11 of 18

Not to be rude, but are you sure they are not just fibbing to get you to come down in your price...ya know????? I am on the low end too....50 per serving for fondant...that seems unrealistic...the fondant costs more than that, even the crappy stuff...I think they are trying to scam you...

Hold your ground...you get what you pay for icon_wink.gif

Chickycakes Posted 3 Mar 2010 , 4:29pm
post #12 of 18

Not worth competing with. Someone who charges .50/serving for fondant is seriously losing money. Forget about it and keep on with your work.

BTW, I'm sure her cakes stink if she's making them that cheap.

pouchet82 Posted 3 Mar 2010 , 4:37pm
post #13 of 18
Quote:
Originally Posted by Florimbio

Not to be rude, but are you sure they are not just fibbing to get you to come down in your price...ya know????? I am on the low end too....50 per serving for fondant...that seems unrealistic...the fondant costs more than that, even the crappy stuff...I think they are trying to scam you...

Hold your ground...you get what you pay for icon_wink.gif




I was thinking the same thing...they might just be trying to get you to lower your price. Stick to your guns, and if they come back to you DO NOT lower your price.

tracycakes Posted 4 Mar 2010 , 10:26pm
post #14 of 18

I don't lower my prices for anyone. I may give a discount if it is a close friend or design-wise, I "might" do extra decorations but only if I want to. So far, no one has asked me to lower my price - I wouldn't anyway.

I did have a co-worker (at my dayjob) ask me to make a full sheet cake to sell slices for a fundraiser she is having and she asked for a discount since it's a fundraiser. I refused. I don't make much on sheet cakes anyway and I wasn't going lower my price. I kindly suggested she go to a grocery store or Sam's. She is going to make it herself.

verosuperstar Posted 4 Mar 2010 , 11:00pm
post #15 of 18

for that price maybe to my sisters and in bc. I don't discount my cakes. To my friends I charge them for simple decorations but I put a lot more decoration for the same price. That's my discount for them.

dalis4joe Posted 5 Mar 2010 , 2:13am
post #16 of 18

.50 cents per serving.... they are getting the box cakes (on sale 10 boxes for 10 bucks) and maybe a sugar glaze and calling it "poured fondant"...

Someone that wants to get a cake as cheap as possible... WILL FIND someone willing to do it...
but
they won't have return clients.... and that is thinking long term... not for the moment...

I heard of someone here that sells 8" rounds covered with buttercream for $5.00 each...
I don't even bother to think or entretain a discussion on "well so so sells this for that... can u match or do better?... I tell them... enjoy your 5$ cake.....
bhabhayyyyyy

indydebi Posted 5 Mar 2010 , 2:26am
post #17 of 18

I knew a lady YEARS ago who would buy her ingredients out of her husband's wallet, but all of the income from the cake went into her wallet. I'll bet you that if she sold a 100-serving cake for $50, she too would think she made "good money" because it was all hers.

Her hubby had a different viewpoint, I'm sure!

KHalstead Posted 5 Mar 2010 , 2:37pm
post #18 of 18

lol indydebi.....................I swear my DH THINKS that's what happens with MY cakes LOL

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