I'm so excited! I'll be opening my bakery in March 2011. Other bakeries charge something like $2.50 for a regular sized cupcake and $5.00 for a jumbo. I think that's steep. But what I want to know is what's fair? I don't want to under cut my potential income but I don't want to over charge. So what do you think?
PS- I'm in Michigan if that helps....
Fair isn't what is going to make you money and ultimately stay open for business.You need to do research to find out what these items are selling in your area from Custom bakeries and not big grocery chain stores etc..Once you determine that and your operating costs you can determine price etc.
I agree with others. Do the research and be competitive without underpricing yourself out of business. I just recently realized that a batch of custom cupcakes are just as much work, if not more than a basic cake. You're doing just as much work, but multiple times, and on a smaller (which some could argue as being a more challenging) scale. I thought of this the other day when I realized that I had charged one of my friends $125 for a 50 serving 2 tier cake, and then another asked for 75 cupcakes, and, according to my pricing scale, would be paying only $140. And that included 75 fondant figures! This was my first lesson on cupcake pricing!
That's great. I agree that prices are determined by area but also but I also believe that skill level is a very important factor as well. These questions are asked quite often and it seems that skill level or quality of work, which I feel is very important, is never mentioned when someone is asking "how much should I charge?" Besides how much it cost you to produce your product and the average price others in your area are charging, your skill level should also be considered when determining your prices.
Good luck to you 
I also believe that skill level is a very important factor as well. These questions are asked quite often and it seems that skill level or quality of work, which I feel is very important, is never mentioned when someone is asking "how much should I charge?"
I agree! It is art to many after all..
ok so not to pee in your cheerios but:
How can you be opening a business in 2011 if you don't even know if a certain price is going to make you money? Where is your business plan? Where is your cost analysis? These are all things that need to be determined BEFORE you set an open date? You will most surely fail if you don't do the research beforehand.
Now, a bit of advice. Make a reverse timeline. Use your March 2011 date and work backwards from there. Do you have enough time to do the legwork before March 2011? From the time that I decided I wanted to open my place, it took me over 1 1/2 years to get all of the research done and I was slighly obsessive about it.
If basic cupcakes are in question, then skill level really doesn't need to be factored in. But, when pricing decorated ones or the decorations for them it should.
Basic cupcakes $1 a dozen
premium cupcakes $2 a dozen
with filling, add $1 a dozen
cupcakes come with basic decorations (sprinkles...) if desired. Other decorations available and are based on design.
These are fictitious prices.
How long has that other bakery been in business? A lot of bakeries use cupcakes and other small goodies as catchers or loss leaders. that may be the case with you...you can lower the price of your cupcakes to attract attention to your bakery. Not a bad idea at all. One must pick an item or items that will 'front' this area...cupcakes, in a full line bakery are ideal.
I agree with mamawrobin. Maybe decorating skill is not as important in basic cupcakes, but tasting the best is a skill. I am opening a business in a few months and I am in the process of going to every bakery, buying their products, and tasting them. One bakery has a strawberry shortcake cupcake recipe that is incredible and I can't do one better YET, but I will. I have searched every wedding cake web site and compared them to my skill level. Finding your place in the market is a complex formula.
Ya'll are absolutely right. There are multitudes of people opening a bakery without the basic knowledge of baking.
OP, are your cupcakes as good as the 'other' bakery's? Better? You must know the competition's strengths and weaknesses...get in there and taste the goods!
ETA: I don't believe baking is a skill like decorating. It does take the skill of reading and a bit of common sense. I believe baking is more the ability to follow simple written instructions.
That whole saying about how two people can bake the same recipe and it come out differently is a farse. If two people bake it the same way, it will come out the same.
KelleyM has a great statement on her Cakeboss site in regard to opening a cake business and pricing. It really spells it out nicely and puts things into perspective. You can go to this link and read it. Her site is very informative!
http://www.cakeboss.com/PricingGuideline.aspx
I am a lover of all things cupcake and I don't even bat an eye when paying $2.50 and $2.99 for my two favorite cupcakes in town. But what makes me pay that price is the taste. They are amazing!
The one that is $2.50 is a chocolate cupcake w/ chocolate icing and sprinkles and it is not decorated fancy at all...it looks like what my mom's looked like when we were kids. What makes this cupcake is the chocolate icing. They are a chocolate store and they use their own chocolate to make the icing. I don't know how they do it, but it is divine!!
The one that is $2.99 is decorated beautifully and is from a different store. The cake is unbelievably moist and it has a yummy cheesecake filling and icing. The flavors blend together beautifully.
I would not be a repeat customer if these cupcakes didn't taste good. Paying $2.50-2.99 for an average cupcake just wouldn't work for me.
Good luck with your new business!
All great points on pricing! Price is affected by area, sure... but the market will only bear a new product that tastes better, looks better, or is priced better--- or any combination of that.
Nida, I don't think the pricing you quote is too bad--- if it is a great looking, tasty cupcake.
I need to have a reason to buy your custom cupcakes, rather than those at Sam's or Walmart... right?
Good Luck!
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