Low Ball Pricing...rant!

Business By cakesdivine Updated 18 Aug 2010 , 1:51pm by cakesdivine

cakesdivine Posted 17 Aug 2010 , 8:01pm
post #1 of 30

ARRGH!!

Ya know I don't have a problem with other cakers in my area if everyone is on the same page with pricing, BUT what irks the t-wilikers out of me is seeing an illegal caker who has lowball or inconsistant pricing.

Found a site today of a woman in my area (literally a few miles from me) doing cakes for a party venue from her home kitchen. She admittedly uses Wilton character shaped pans and the most she charges for what she calls 3D cakes is $25! $15 for a small one,

But if you order any other type cake she charges $2.50-$3 per serving for a basic BC cake (more in line with the area). Then she lists her cupcake price...

$5 per dozen.... icon_eek.gif

You can't even go to Walmart and get a dozen iced cupcakes for that price!

The pricing is all over the map!

What hurts the most is the owner of the party venue knows me and has seen my work and tasted my stuff and was amazed. I did her husband's nieces wedding cake a few years ago. But this woman goes to church with her. What she doesn't realize is that she is putting her company at risk by allowing this non licensed caker do all her party cakes.

It is one thing to fly under the radar for friends and aquaintences, it is quite another to be the sole provider of cakes for an event venue, and then top it off by giving away your product hurting those of us who are playing by the rules. icon_razz.gif

29 replies
jason_kraft Posted 17 Aug 2010 , 8:16pm
post #2 of 30

If commercial home baking is illegal in your area, contact the health department. Problem solved.

Texas_Rose Posted 17 Aug 2010 , 8:16pm
post #3 of 30

With those prices, she's probably barely breaking even on supplies. When she realizes that she isn't making any money, she'll either burn out or raise her prices to something like normal.

I know someone who lives a couple miles from you who was doing cakes when she was my neighbor in an apartment complex, I wonder if it might be the same person.

There's an illegal baker on CL who's been advertising like crazy the last couple years. I looked at one of her ads the other day to see if she ever improved and she's opening a bakery across from the Witte. I bet you know who I mean, her ads have been titled "Professional Fondant and Buttercream Cakes" and she was offering decorating classes at her home for a while.

cakesdivine Posted 17 Aug 2010 , 8:26pm
post #4 of 30
Quote:
Originally Posted by Texas_Rose

With those prices, she's probably barely breaking even on supplies. When she realizes that she isn't making any money, she'll either burn out or raise her prices to something like normal.

I know someone who lives a couple miles from you who was doing cakes when she was my neighbor in an apartment complex, I wonder if it might be the same person.

There's an illegal baker on CL who's been advertising like crazy the last couple years. I looked at one of her ads the other day to see if she ever improved and she's opening a bakery across from the Witte. I bet you know who I mean, her ads have been titled "Professional Fondant and Buttercream Cakes" and she was offering decorating classes at her home for a while.




Really? Where/What is the Witte? I comb CL ever so often and haven't seen anything of the like. Once in awhile I advertise on CL mainly to push my econoline cakes, but did recently advertise lessons. And I definitely am legal!

cakesdivine Posted 17 Aug 2010 , 8:28pm
post #5 of 30

I know she is going back to school (via her FB page) to become a nurse. I bet the cake biz stops once she starts that and/or gets a nursing position. But then again maybe not

Texas_Rose Posted 17 Aug 2010 , 8:32pm
post #6 of 30

The Witte is a museum on Broadway. And it's not your ad, I've seen your ads before icon_biggrin.gif The girl I'm talking about was advertising lessons when she still needed some herself.

I got tired of seeing CL wallpapered with her ads. She had a bunch of borrowed photos on her website and I emailed all the decorators whose cakes I recognized and told them she was using her photos. It was kind of fun...lots of them sent me copies of the emails they sent her.

cakesdivine Posted 17 Aug 2010 , 9:02pm
post #7 of 30

Wow how did I miss her ads?

Oh jasonkraft, it isn't my style to be a whistleblower. Besides I am a big supporter of the Texas cottage food law campaign to make it legal to do from one's home. I would love to stop paying $100 everytime I walk into the rental kitchen I use.

jason_kraft Posted 17 Aug 2010 , 9:07pm
post #8 of 30
Quote:
Originally Posted by cakesdivine

Oh jasonkraft, it isn't my style to be a whistleblower.



If she's advertising in your market and accepting paid orders without being licensed, she will eventually be caught. The longer it takes for someone to turn her in, the more penalties and back taxes she will have to pay, not to mention the increased exposure to liability while she is operating outside the law.

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Besides I am a big supporter of the Texas cottage food law campaign to make it legal to do from one's home. I would love to stop paying $100 everytime I walk into the rental kitchen I use.



I am also a big supporter of legalizing commercial home baking, but until such a law is passed in your state, you have to follow the rules and get a commercial kitchen like everybody else, or you face the consequences. No exceptions.

cakesdivine Posted 17 Aug 2010 , 9:11pm
post #9 of 30

Yes but I don't feel it is my place to out her. Let her continue as is and get caught, she will suffer the consequences.

jason_kraft Posted 17 Aug 2010 , 9:15pm
post #10 of 30
Quote:
Originally Posted by cakesdivine

Yes but I don't feel it is my place to out her. Let her continue as is and get caught, she will suffer the consequences.



You are actually doing her a disservice by allowing her to continue unabated...but if you have a moral issue contacting the local health department yourself, you can send me a private message with the necessary info and I'll take care of it.

smokeysmokerton Posted 17 Aug 2010 , 9:43pm
post #11 of 30
Quote:
Originally Posted by jasonkraft

You are actually doing her a disservice by allowing her to continue unabated





Yeah, do her a favor. It is your moral obligation icon_rolleyes.gif

jason_kraft Posted 17 Aug 2010 , 9:51pm
post #12 of 30
Quote:
Originally Posted by smokeysmokerton

Yeah, do her a favor. It is your moral obligation icon_rolleyes.gif



I do view it as a moral obligation...when someone is doing something that might get them hurt (physically or financially) I will do my best to correct the error.

I personally don't think it's right to allow someone to continue down a bad path until someone else steps up or they have a catastrophe, but I recognize that other people may have different opinions and that's perfectly OK. icon_smile.gif

cathyscakes Posted 17 Aug 2010 , 10:13pm
post #13 of 30

Yes, but unless you report everyone speeding, or littering, or countless other violations, because someone could get hurt, its being a little transparent, its about business. So just be honest. I just don't understand why you would want to take care of it for someone else, I sure wouldn't want to get involved, its none of our business.

myslady Posted 17 Aug 2010 , 10:13pm
post #14 of 30

I think you should tell her what you said.

Quote:
Originally Posted by cakesdivine

ARRGH!!

It is one thing to fly under the radar, it is quite another to then give away your product (charging less that retail bakeries) hurting those of us who are playing by the rules. icon_razz.gif


mamakasst Posted 17 Aug 2010 , 10:17pm
post #15 of 30

this is way off topic but what is this cl everyone keeps mentioning?

jason_kraft Posted 17 Aug 2010 , 10:24pm
post #16 of 30
Quote:
Originally Posted by cathyscakes

Yes, but unless you report everyone speeding, or littering, or countless other violations, because someone could get hurt, its being a little transparent, its about business. So just be honest.



This was covered before in another rant thread (which was deleted) so I don't plan on continuing the back-and-forth over morality, which is inherently subjective. Feel free to send me a private message if you want to discuss it.

I will briefly address your point though -- if someone is committing a minor violation such as littering or driving 5mph over the speed limit, I won't report it. However, if someone is driving 100mph and weaving on a highway, you can bet I'll report that, since they are endangering their physical health.

Similarly, if a home baker makes cakes for close friends and family only and they do not advertise, I really don't care if they accept money, since their liability risk is still minimal (as it's doubtful close friends and family will sue) and their sales volume is low enough to not be a significant tax issue. However, once you start advertising and making deals with venues, that's a different story.

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I just don't understand why you would want to take care of it for someone else, I sure wouldn't want to get involved, its none of our business.



See my previous posts. It's actually not "about business" for me, since this particular unlicensed bakery has no impact on my business whatsoever. I'm just doing it for the fun of "tattling" on someone else.

I'm kidding about the last sentence. Really. icon_lol.gif

jason_kraft Posted 17 Aug 2010 , 10:25pm
post #17 of 30
Quote:
Originally Posted by mamakasst

this is way off topic but what is this cl everyone keeps mentioning?



CraigsList.

Texas_Rose Posted 17 Aug 2010 , 10:25pm
post #18 of 30
Quote:
Originally Posted by mamakasst

this is way off topic but what is this cl everyone keeps mentioning?




CL=Craigslist

Try going to the craigslist for your area and entering cake in the search box. You'll probably see a bunch of people selling cakes from their homes.

I live in a big city but I can think of at least 25 that I see advertising regularly, some licensed, but mostly home bakers. I know other people who make other foods and sell them from home too...it's not legal but there's no point in tattling on everyone. They're going to do what they do and probably the health department won't bother shutting them down unless they actually make someone sick.

smokeysmokerton Posted 17 Aug 2010 , 11:46pm
post #19 of 30
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by smokeysmokerton

Yeah, do her a favor. It is your moral obligation icon_rolleyes.gif


I do view it as a moral obligation...when someone is doing something that might get them hurt (physically or financially) I will do my best to correct the error.

I personally don't think it's right to allow someone to continue down a bad path until someone else steps up or they have a catastrophe, but I recognize that other people may have different opinions and that's perfectly OK. icon_smile.gif




Fair enough. I personally am of the opinion that adults make their own decisions and it isn't my responsibility to "protect" them. If she got busted tomorrow, I wouldn't be clutching my pearls and wailing about how I failed her. She's a big girl. It's different than injecting myself into a situation that doesn't concern me. If someday, like in op's case, it did affect me, then I might do something about it(I'm not in business, so the jury's still out) because business is business and whether she is such legally or illegally, she's calling herself one so she's fair game...but I wouldn't consider it my moral obligation. I'd consider it protecting my business.

cakesdivine Posted 18 Aug 2010 , 2:36am
post #20 of 30

Since she is a friend of a friend of mine I completely plan on informing her of her non-legit status. It is very possible that she has no idea what she is doing is illegal. I also plan on recruiting her in the fight to make home kitchens in Texas legal to bake from. So instead of hurting her and making an enemy and possibly hurting my friendship with our mutual friend, I choose to go about it in a different way and educate her about how it is, let her know her pricing is all over the map and needs to be consistant with our area's price point and within her own prices, AND recruit her to the Tx cottage food law cause. And possible in the end have a new friend with a shared interest. Yes, It hit a nerve with me, there isn't much business to be had in our little rural area as it is, and so it does sting a little when you see others doing it without paying the same out of pocket expenses and playing by the rules, but you sometimes have to take a step back and see how you might be able to turn it around to your favor instead of cutting off ones nose to spite ones face icon_smile.gif

The_Caketress Posted 18 Aug 2010 , 2:45am
post #21 of 30

I wouldn't worry about it if I were you. You are not in the same market as her and nor would you want to be. She will always attract discount bargain hunters and let her have them. If you ever have a client who just can't afford you, send them her way. You create beautiful cakes and will only attract clients who appreciate your work. Cheaper cakes only make your cake look better by comparision and set a higher value.

Mencked Posted 18 Aug 2010 , 2:48am
post #22 of 30

I just did a quick search of CL for cakes in my area and get this price list! Legal--I think not!!!
Pricing
Cakes and Decorations
* All Tiered Fondant Cakes are priced at $1.25 per serving.
* All Tiered Wedding Fondant Cakes are priced at $1.75 per serving.
* All 3D Cakes(Carved)are priced at $1.50 to $2.00 per serving.(Depending on the complexity)
* Any Gumpaste or Fondant Figurines are priced at $1.00 each
* Any 3D Wedding Flowers are priced at $.50 each (Gumpaste or Fondant Flower)
* All Rice Krispy Treats decoration add-ons are priced at $2.00
* Topper prices fluctuate depending on availability.

cakesdivine Posted 18 Aug 2010 , 2:50am
post #23 of 30

I do agree with you Lori, infact I am looking into relocating to the closest bigger city to open a storefront. Decided my little rural area locals just are not going to put out the money for a quality custom cake. I will still service the destination brides that come to our resort area to have their weddings, they usually come from Houston and have money to afford my prices. I get very few local brides because most of the people who live in this area are either dirt poor or rich beyond belief, but are severe penny pinchers who act as if they are penniless...LOL! So am doing alot of research to see which closest town is less saturated with cakers/bakeries and open shop there.

CutiePieCakes-Ontario Posted 18 Aug 2010 , 2:58am
post #24 of 30

CakesDevine: If you do decide to speak to her, perhaps you could mention that she may also be hurting your mutual friend's business. If the MF is recommending her, and she's not legal (and someone gets sick (for example)), then the MF's business will also suffer by association.

Mencked: Those prices are unbelievable! But $1.00 for fondant or gum paste figurines! Is she nuts?? icon_eek.gif

cakesdivine Posted 18 Aug 2010 , 3:29am
post #25 of 30

Cutie Pie - that is just what I had planned on telling my friend. icon_wink.gif

mbark Posted 18 Aug 2010 , 3:56am
post #26 of 30

hmm, I am in southern CA & checked craigslist, only found one that appears to be someone baking from home but not sure. maybe L.A. is good about cracking down on people who advertise cakes on CL

cathyscakes Posted 18 Aug 2010 , 4:33am
post #27 of 30
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by cathyscakes

Yes, but unless you report everyone speeding, or littering, or countless other violations, because someone could get hurt, its being a little transparent, its about business. So just be honest.


This was covered before in another rant thread (which was deleted) so I don't plan on continuing the back-and-forth over morality, which is inherently subjective. Feel free to send me a private message if you want to discuss it.

I will briefly address your point though -- if someone is committing a minor violation such as littering or driving 5mph over the speed limit, I won't report it. However, if someone is driving 100mph and weaving on a highway, you can bet I'll report that, since they are endangering their physical health.

Similarly, if a home baker makes cakes for close friends and family only and they do not advertise, I really don't care if they accept money, since their liability risk is still minimal (as it's doubtful close friends and family will sue) and their sales volume is low enough to not be a significant tax issue. However, once you start advertising and making deals with venues, that's a different story.

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I just don't understand why you would want to take care of it for someone else, I sure wouldn't want to get involved, its none of our business.


See my previous posts. It's actually not "about business" for me, since this particular unlicensed bakery has no impact on my business whatsoever. I'm just doing it for the fun of "tattling" on someone else.

I'm kidding about the last sentence. Really. icon_lol.gif


I'm glad you explained yourself, but if you cared for the offender, why not call her to explain what could happen to her, instead of getting her fined, or in trouble. Maybe she doesn't know all of the legalities. I have been decorating cakes for over 30 years, and I never knew I could get into trouble. I only bake for family,and close friends, usually for free, sometimes I take money for ingredients, but according to people on here, if I take any money its illegal. I never knew that. So, here in Oregon its legal to bake out of my house, but its just a hobby for me, I don't want a business, but I don't want someone turning me in for baking a cake for a family member that gave me 20 bucks for ingredients. I would never advertise or solicit business, so I can understand the op predicament, and I guess she could confront her if she feels threatened. I just couldn't figure out why you would want to do it. I really don't think someone weaving in and out of traffic at 100 mph is the same as someone baking a cake. O.k. i'm done, we are all entitled to our opinions, and i'm sure we'll never agree, I just would never do that to someone.

jason_kraft Posted 18 Aug 2010 , 4:59am
post #28 of 30
Quote:
Originally Posted by cathyscakes

I'm glad you explained yourself, but if you cared for the offender, why not call her to explain what could happen to her, instead of getting her fined, or in trouble.



If you know the person or it's a FOAF situation, then I agree you should talk to them first about getting legal. However, a stranger might not react so kindly to someone telling them they are breaking the law, no matter how politely you phrase it. People are usually not fined by the health department for running an unlicensed shop, but they are shut down until they get the necessary inspections. It's about as much "trouble" as a speeding ticket.

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I really don't think someone weaving in and out of traffic at 100 mph is the same as someone baking a cake.



Then you don't understand the liability involved in selling food commercially. A single food poisoning incident could potentially cost you hundreds of thousands of dollars in legal fees and compensatory/punitive damages. If you have a legit business with liability insurance, you pay nothing. If you have an unlicensed business, there's no way you can get liability insurance, so you are stuck with the bill, and you could lose all your personal assets (including your home).

More info:
http://cake-business.com/blog/2007/06/liability-insurance-for-a-home-business/

That's why I'm not too concerned with people "selling" cakes to close friends and family, since they are more likely to settle worst-case situations without involving the courts. Strangers will have no such qualms about taking your personal assets.

And FYI, for states with home baking laws, there's really no reason not to form a business. You don't have the added expense of a commercial kitchen, and if you lose money (for example, making cakes for free for family) you can usually deduct the losses against your other personal income. Losses for hobbies cannot be deducted.

indydebi Posted 18 Aug 2010 , 5:17am
post #29 of 30
Quote:
Originally Posted by cakesdivine

Yes but I don't feel it is my place to out her. Let her continue as is and get caught, she will suffer the consequences.


and how does she "get caught" if everyone is sitting around waiting for someone ELSE to "catch" her? icon_confused.gif

cakesdivine Posted 18 Aug 2010 , 1:51pm
post #30 of 30

Debi, there is a lady in my area that was shut down by the HD about 8 years ago. She now uses the local coffee shop's kitchen to do her cakes (which is in the same strip center my dance studio is in). She is a very mean and vendictive person, and will out anyone she discovers is doing this from their home in a heartbeat. This is a very small community. It won't take long for her to discover this other lady exists.

This same woman called when we opened our dance studio telling me how excited she was that we were starting a studio in our community, and that she has 3 daughters who have been taking in the town over but they only use teenagers to teach. She was excited about her kids learning from professionals. She also said that she could guarantee about 12 other students would follow at her recommendation because the kids all want to stay together since they had been dancing in the same class for the past few years.

As the conversation continued she started telling me we should offer birthday parties (something I already had implemented for our studio anyway to cross promote Cakes Divine) and she does cakes and would give us a great rate on the cakes. I thanked her and told her that we already had birthday parties in place and the information was on our website, and then I told her I own Cakes Divine and handle the cake for the parties.

She went ballistic on me! Started screaming at me that how could I own a cake business and be any good as a dance teacher, then she hung up on me. The next day the coffee shop which is owned by a mutual friend, now offered decorated cakes by this lady...LOL! She never did bring her daughters, but alot of those kids from her children's class came to our studio and are still there icon_smile.gif

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