Pricing Cakes

Decorating By Meghan1010 Updated 19 Apr 2010 , 10:03pm by Meghan1010

Meghan1010 Posted 18 Apr 2010 , 6:37pm
post #1 of 15

I am having a horrible time pricing our cakes! We seem to ALWAYS under price and don't realize it until we are about 3 hours into it! lol....
I try to go by serving sizes but sometimes it still is NOT enough for all the detail and work? How do I make a price list and make sure we don't just get $5 for a cake that took 6 hours?
Thanks for any suggestions!

14 replies
amysue99 Posted 18 Apr 2010 , 7:13pm
post #2 of 15

Do your homework. Figure out how much it actually costs you to make the cake - ingredients, boards, boxes, etc. Figure the costs for all or most of your recipes. That will give you a good idea of the average cost.

Then add in an amount for your time. I average the amount of time that I put in - for example, I know that it takes me about 4 hours (baking, clean-up, decorating) for a 25-person cake. You don't need to figure out every design. some will take more time, some less. I based my prices on the per serving price of a 25-serving cake. It will go something like this:

ave. cost ingredients/materials: $6.00
labor @ $8/hour: $32.00
Total price: $38.00
per serving price (25 servings) $ 1.52

Now, before people start yelling - this is ONLY an EXAMPLE. I charge more than this, but not by much.

I have two price tiers - one for basic flavors and fillings. A more expensive one for fondant, gourmet (more expensive) flavors and fillings. Carved and 3-D are charged differently.

prterrell Posted 18 Apr 2010 , 7:56pm
post #3 of 15

What is the current pricing structure you are using?

DO NOT go by the old "ingredients x 3" formula as it is competely inaccurate.

Ingredients are the least of the cost of a cake.

Your TIME is the most costly part!

Remember, also, that it's not just the food items, but gas to and from store, delivery cost for things ordered on line, electricity/gas to run appliances and lights, water, wear and tear on your equipment and appliances.

Plus, baking and decorating is a highly skilled profession. Pay yourself AT LEAST $10/hour for your work.

Do your homework to figure out your true costs, including your salary. If you want to have money to reinvest into your business, then you will need to add more for that, otherwise, you will always just break even.

Once you have figured out how much your base price per serving will be, you can then consider any upcharges you might want to have set down, such as more costly fillings/icings, gumpaste or chocolate or sugar work, sculpting, piping, hand painting, etc.

Make a chart/spreadsheet etc with your pricing structure set down on it for your reference. For increased speed, calculate out the per serving price x the number of servings for all of the pans you own, so that you don't have to redo the math on every order.

HTH!

barbbouk Posted 18 Apr 2010 , 8:24pm
post #4 of 15

prterrell,

Excellent post!

TLCDesserts Posted 19 Apr 2010 , 12:35am
post #5 of 15

I was having the same issue with underpricing. I bought Cake Boss. It's a computer program that is AMAZING! It takes some time to input all your recipes and stuff, but it is well worth it. Plus, since you're a member of CC you can get a 10% discount. They have tutorial videos on the program that explain everything that you can do with it. You should check it out. The website is www.cakeboss.com When it opens scroll to the bottom of the page and it has the thing for CC member to get 10% off. Hope it helps. icon_smile.gif

Meghan1010 Posted 19 Apr 2010 , 1:32am
post #6 of 15

we have added all costs for the cake itself BUT it seems as if each cake is different therefore we never no how much to charge because we don't know how long it will take? So what do I tell the customer? I can't imagine that people will want to buy something NOT knowing how much it costs?
Apparently we are WAY underpricing For the sweet 16 cake we only charged $35 and for the baby shower $45? After spending 6 hours on each!
For cakes like these ....how much would you charge?
LL
LL

sugarspice Posted 19 Apr 2010 , 1:41am
post #7 of 15

What are the sizes, flavors, fillings. Fondant or buttercream??? They are VERY nicely done!! thumbs_up.gif

Meghan1010 Posted 19 Apr 2010 , 1:43am
post #8 of 15

10 inch and 8 inch on baby shower with Buttercream with fondant accents.
10 inch (2 layer) on sweet 16 with Buttercream with fondant accents.
Both white almond....

indydebi Posted 19 Apr 2010 , 1:52am
post #9 of 15

Ok, I'm getting my mom-voice and my mom-finger out on this one! icon_twisted.gif

A 10" 2-layer square serves 50. You charged less than $1/serving. My plain BC price would have been WAY over $100!

An 8/10, 2layer square serves 32/50 = 82 servings. I don't even want to do the math to see how much money you lost on that one. It will just make me cry.

You've GOT to get a GOOD basic price-per-serving just to give yourself a starting point! If you need to add a charge here and there to cover things like fondant accents, etal, then do so. But get a good base price.

My impression from your pricing is that you are suffering what a lot of cakers (and sorry to say, it's mostly women who do this) suffer from: Fear of making people "mad" at your pricing. Fear that they "won't LIKE" you because of your pricing.

This is not a popularity contest. It's not personal ... it's business. It costs what it costs. If they don't want to pay it, that's fine.

It's NEVER ok to take an order that puts you in red as opposed to not taking the order. With the prices you've listed, you'd be money ahead if you refused the order. WAY ahead.

prterrell Posted 19 Apr 2010 , 2:27am
post #10 of 15

My base price for buttercream for an 8" is $50 and for a 10" is $78. For fondant, it's $75 for an 8" and $117 for a 10" (I charge 25 cents per cubic inch of cake).

bobwonderbuns Posted 19 Apr 2010 , 3:33pm
post #11 of 15
Quote:
Originally Posted by indydebi

Ok, I'm getting my mom-voice and my mom-finger out on this one! icon_twisted.gif

A 10" 2-layer square serves 50. You charged less than $1/serving. My plain BC price would have been WAY over $100!

An 8/10, 2layer square serves 32/50 = 82 servings. I don't even want to do the math to see how much money you lost on that one. It will just make me cry.

You've GOT to get a GOOD basic price-per-serving just to give yourself a starting point! If you need to add a charge here and there to cover things like fondant accents, etal, then do so. But get a good base price.

My impression from your pricing is that you are suffering what a lot of cakers (and sorry to say, it's mostly women who do this) suffer from: Fear of making people "mad" at your pricing. Fear that they "won't LIKE" you because of your pricing.

This is not a popularity contest. It's not personal ... it's business. It costs what it costs. If they don't want to pay it, that's fine.

It's NEVER ok to take an order that puts you in red as opposed to not taking the order. With the prices you've listed, you'd be money ahead if you refused the order. WAY ahead.




Okay I have a question on this: I agree whole heartedly and I do the same thing you advised BUT lately I'm getting a bunch of people contacting me saying "that's too expensive" yada yada yada. I try to tell them "cheap cakes ain't quality and quality cakes ain't cheap", "if you want WalMart go to Walmart" and the like. But it seems like I'm not even given a chance to educate these people on cake pricing. Any thoughts or suggestions?

LuvLyrics Posted 19 Apr 2010 , 3:40pm
post #12 of 15

Your daughter is 12 and she is already making this type of cakes???? impressive !!! regardles of her age, you need to charge the right cost, she made 2 beautiful looking cakes and she should get paid for it!!! For me every cake it's different, I know that many people charge per slice and then gumpaste flowers, and other xtra things it's extra $$... and sometimes, we spend so much money to make a cake that if we don't charge enough we loose more than what we make... good luck and don't be afraid of charging just b/c of her age !

Sagebrush Posted 19 Apr 2010 , 6:24pm
post #13 of 15

Ditto what LuvLyrics said.

Talent is talent, regardless of what package it's wrapped up in... be it a pre-teen girl, or a newbie decorator, if you can do that good a job, you should get that good a price.

Similarly, ingredients & overhead costs are the same regardless of your age or experience.

blueirus Posted 19 Apr 2010 , 6:36pm
post #14 of 15

Oh a side not, what a great talent! Kuddos to her =)

Meghan1010 Posted 19 Apr 2010 , 10:03pm
post #15 of 15

FYI she works out of my mother-in-laws catering kitchen...so we are licensed (free and clear). icon_smile.gif

Quote by @%username% on %date%

%body%