I Need Help With Pricing

Decorating By bluejeannes Updated 29 Oct 2010 , 6:59pm by bluejeannes

bluejeannes Posted 29 Oct 2010 , 4:15pm
post #1 of 7

Since I have no idea about pricing I really need some help! If I were to charge $40.00 for an 8" basic 2 layer cake iced with buttercream, then how much should I charge for the next size up? Like say they want a 10" cake (buttercream), do you think charging $10.00 more (so $50.00 in total) sounds about right? Then say it would be $10.00 for each size up? So a 14" would be $70.00. Does that sound right?

6 replies
cakes22 Posted 29 Oct 2010 , 4:26pm
post #2 of 7

I wouldn't do it by the size, but the servings. So a 8"round could serve 20 (according to Wilton) I would charge x amount per serving. You also have to figure in your costs and what your time is worth. Only you can figure that one out icon_smile.gif

Hth

bluejeannes Posted 29 Oct 2010 , 5:47pm
post #3 of 7

by the serving? Ok, what's a resonable price per serving? Im horrible at math and Im horrible at figuring out prices. What do some of you charge per serving?
I just thought of something...why is it different charging by the serving rather than the size? If an 8" serves 20, then what's the difference charging for 20 servings or for 8"? (like I said, Im horrible at math!)

cakes22 Posted 29 Oct 2010 , 6:16pm
post #4 of 7

There is a sticky at the top of the forum with a price matrix, it does the math for you. I suck at math too, and I found that using the matrix helped a lot.
Most cakers charge by the serving, especially if your doing larger cakes like for a wedding or a tiered cake. I used to price per cake, but found that I was ripping myself off. I wasn't including time, electricity, water for washing dishes etc.
So what I did was add up my costs to make a cake (easy enough, if your by a dozen eggs for $1.69 divide that by 12 it works out to about 14 cents per egg) do that for all your ingredients. You can then figure out your other charges, then do a flat rate of .... say $10 to cover water/hydro etc. Then find out how much your time is worth. What's minimum wage where you live? It like $9.50 where I am. So add up the time it takes you to complete a cake from the first egg crack to the last decoration. If it takes you 2.5 hours multiply that by your hourly rate. Then you have a general idea as to what it costa you and what you want to charge.
I know some who figure out what it cost to the cake and add $30 or $40 regardless.
It's kinda tricky, but if you do it per cake size, I bet you'll find your not charging enough.
The main thing is not to sell yourself short. Your time is valuable so charge accordingly. If you just charge enough to cover your costs your not doing yourself any favors. You will be surprised what people are willing to pay for a great cake.
I start at $3.00 and go from there (and I think that's on the low end) if there are gumpaste/fondant decorations price goes up. Fruit filling : price goes up etc.
That again

jason_kraft Posted 29 Oct 2010 , 6:21pm
post #5 of 7

We price party cakes by size, but we price wedding cakes (which don't typically have standard sizes and are often heavily customized) by serving. To figure out a price for party cakes based on size, first figure out how many party size servings each size cake will serve. Party-size servings are 50% larger than wedding-size servings, so if Wilton says an 8" wedding cake serves 20, you'll want to multiply that by 2/3.

Instead of having a flat per-serving price for party cakes, we price smaller cakes with a higher per-serving price to encourage people to upgrade and to reflect the lower marginal costs of making a larger cake. For example, our 8" cake serves 12 and starts at $39 for basic BC -- that's $3.25/serving. Our 12" cake serves 26 and starts at $64, or ~$2.50/serving.

To figure out how much to charge per serving (and by extension the price of your party cakes) you need to first determine your costs, including ingredients, labor, and overhead such as liability insurance and licensing fees (on a per-cake/per-serving basis). Take this number and add 20-30% for your profit margin, that should be your price range.

CWR41 Posted 29 Oct 2010 , 6:36pm
post #6 of 7

When pricing by serving, keep in mind that a serving size is 8 cu. in. or else you're giving away extra cake for free.

Party size: 2" x 2" x 2" (8 cu. in.)
Wedding size: 1" x 2" x 4" (8 cu. in.)

bluejeannes Posted 29 Oct 2010 , 6:59pm
post #7 of 7

whew...my head is spinning!
I'll have to re-read all this stuff really slowly to understand better, but this is all great info! I'll have to figure everything out (I'll get my hubby, he's GREAT at math!)
I find Im not really confident when it comes to pricing. I don't want to over price, but then I don't want to under price as well. I talked to someone who spent a small fortune on a cake they bought from someone and they said, although they loved the cake, they wouldn't spend that much again unless for a special occasion. I don't want to be just special occasions, I want every birthday (not just the first birthday) you know what I mean.
But then I don't want to be selling myself short either! So it's hard to find the happy medium in between!

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