Holy Price Discrepancy, Batman!

Business By Jessi83 Updated 20 May 2010 , 12:11pm by indydebi

Jessi83 Posted 18 May 2010 , 3:36pm
post #1 of 11

So, I've been trying to figure out a little price list. Now, it was recommended that I get price lists from local bakers and go from there...well, they're SOO different! I'm going to list their prices below. Now these are for round cakes, two layers, buttercream, "standard decoration". Baker 1 has had her own/been in the business for quite a bit longer than Baker 2.
Baker 1 Baker 2
6" $20 $12
8" $26 $24
10" $32 $36
12" $40 $53
14" $48 $76

See what I mean? Now, I can tell that Baker 2 prices per serving, but I can't quite figure out how Baker 1 prices. This is making it difficult for me to figure out my prices, comparing with local bakeries! I just can't believe the difference! I'm so confused icon_cry.gif

10 replies
ttehan4 Posted 18 May 2010 , 3:49pm
post #2 of 11

Add both bakers prices together and divide by 2. It will give you an average price per cake then divide the average price per cake by the # of servings. Then see if that price per serving works for you with all your cost and time.

6" average price 16.00
8" 25.00
10" 34.00

Get what I mean.

TexasSugar Posted 18 May 2010 , 3:55pm
post #3 of 11

While I think it is helpful to know what they charge you also have to consider your overhead first.

Do you know how much it costs you to make a cake? How much you want to make an hour/how long it takes you to do a cake? How much profit you want?

adamsmom Posted 18 May 2010 , 4:08pm
post #4 of 11

I agree with TexasSugar. While it is important to do your homework on what other bakeries are charging untimately you need to know what your cost & overhead is. Then add that with what you would like to make per hour for time involved to make, decorate and clean up (yes, I include the clean up time too). This will give you an idea of what you need to get out of each cake (or per serving). I did both of those things (local bakery proces and my cost) and that's how I came up with my final prices. Don't stress too much over it. As long as you're comfortable with what your cost/profit margin is, then go with it. I'm sure your creations will be worth what you end up charging! Best of luck!

sweetcakes Posted 20 May 2010 , 2:30am
post #5 of 11

Are these bakeries or just bakers prices? It always amazes me when i see peoples prices (just some) and i think they really haven't figured out how much the cake is costing them to make. Putting my recipes into cakeboss and seeing how much that cake is costing in total supplies and overhead was an eye opener. Use their prices as a guide but look at their work too, then calculate your recipe prices along with your abilities and price accordingly.

EvMarie Posted 20 May 2010 , 2:53am
post #6 of 11

I'm coming from a "cookie" perspective...

I like getting an idea of local prices. Judge the level of work & taste. And, of course, calculate your costs & time. Some where in your mind you should be leaning toward a range of prices in your head. Also, do you do something these bakers don't? That will affect your pricing as well.

With me, I don't believe I have found anyone in my area that will make custom cookie favors with fancy tags & bows. There are ladies maybe an hour outside of me...but for the immediate area it makes sense that I can price my fancy cookies at a bit of a premium.

At the end of the day, the prices you come up with based on all the info everyone has talked about will just "feel right".

You will always have those who say you're too high or too low. But, just refer back to your black and white facts & of course your gut.
icon_smile.gif

indydebi Posted 20 May 2010 , 3:55am
post #7 of 11
Quote:
Originally Posted by Jessi83


..........Baker 1..........Baker 2
6"........$20...............$12
8" .......$26...............$24
10"......$32...............$36
12"......$40...............$53
14"......$48...............$76


\\\\

Baker2 seems to be $1/serving, which I find to be nuts!! It would be interesting to know if she really sells a cake for approx 100 servings (6/10/12) for $101? icon_eek.gif

Not sure of Baker1's logic .... A 6" that serves 12 for $20 .... or a 12" that serves 56 (over 4 times as much cake) for only twice the price. icon_eek.gif

Good advice given in the above posts .... you really need to determine YOUR costs before you determine what your price will be. Knowing the competition is a good thing and it's a good guideline ... but dont' set your pricing based on theirs because of overhead differences. HEre's a thread with my list of "ingredients" in a cake that most people forget to factor: http://cakecentral.com/cake-decorating-ftopict-680978.html

jennicita Posted 20 May 2010 , 6:22am
post #8 of 11

Baker 1 is just going up in 6 to 8-dollar increments. Of course if s/he had any understanding of geometry s/he would know that whenever you increase the diameter of a circle, the area increases at a much greater rate! For every increase in size, his/her price per serving is falling. No idea how that person could even stay in business! Or keep his/her sanity!

In other words, there is a logic to Baker 1's pricing, just not any business logic. Those prices should not be used as a guideline since they don't make any sense whatsoever from a business perspective.

Do it the smart way and listen to indydebi!

Jenny

Texas_Rose Posted 20 May 2010 , 9:03am
post #9 of 11

If they got a feeling that you were fishing for price comparisons, one or both of them may have given you fake prices just to mess with you. Also, they may be pricing low and then have upcharges for every little thing.

You should figure out a price per serving and start with that. It will look lower to people than a list of prices per size and be easier for the average customer to understand.

costumeczar Posted 20 May 2010 , 11:02am
post #10 of 11

If I charged those prices I'd be working for less than minimum wage.

indydebi Posted 20 May 2010 , 12:11pm
post #11 of 11
Quote:
Originally Posted by Texas_Rose

Also, they may be pricing low and then have upcharges for every little thing.


Oh, excellent point!

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