Rant About Pricing...

Business By peg818 Updated 12 Nov 2010 , 5:52am by Annabakescakes

peg818 Posted 2 Nov 2010 , 11:56am
post #1 of 37

Well heres the back story. I do some specialty work for a local cake store, and help there when they need me, mostly near the holidays. So luckily i don't depend on this for a living.


Well, here is what really got me going. Yesterday i walked into the break room at work and there is an ad for baked goods for the holidays.

Cheesecake $15
cake $10
cupcakes 25cents each

There was a few more things on there, at equally ridiculous prices. The cakes and cheesecakes (there were different flavors listed for both these) did not have a size listed, and i know they don't decorate much, the only thing i have seen these girls do is star cakes.

I really would like to just take ahold of these women (one is old enough to be my mother) and shake the s#$t out of them. They can't even be covering their costs with prices like this (of course i'm figuring they are doing at least a 8 inch cake)


So if you have gotten this far in this post, please don't tell me to turn them in i won't.
But i'm curious how much it costs you in ingredients alone to make a cake

My basic cake (one recipe) cost me about $4.50
My basic icing (one recipe) cost me about $6.30
then the box and board and covering run between $1.50 and $2.00

This is figuring the costs of items not on sale as i can't always be guaranteed to buy on sale

36 replies
MissLisa Posted 2 Nov 2010 , 12:18pm
post #2 of 37

First of all............"turn them in" .........to who???

Secondly, there are such things as "loss leaders" that are used to get people into the store. Once there, the establishment hopes you will spend money on other items as well. The other items are marked at regular price and therefore they make a profit on them. Not one of my most favorite practices but it happens all the time in retail, maybe the owners of this shop figured they'd give it a try.

If you work with these people on a part-time basis, you might just inquire as to how they arrived at their pricing, keeping in mind that they are probably purchasing their supplies at wholesale prices which helps. Still, with those prices, it doesn't appear they are factoring in the time it takes for the actual labor.

peg818 Posted 2 Nov 2010 , 12:26pm
post #3 of 37

Oh dear they are not the store i help out at. These people work at my day job and are doing this on the side. I am certain they are not licensed. So these are not lost leaders to get someone in the store. There is no store to get into. These are three women that are related that seem to be wanting to make some extra money for the holidays. In the end they will be working themselves to death.

So that is what i meant buy turn them in. This has nothing to do with a legal business. And i'm not in business myself although i do help one out in an as needed basis.

My real question is how do you get your prices for ingredients so low that you can charge these kinds of prices. Cause i don't see how it can be done. Even buying in bulk, i have researched what costs are and know what they charge at the local restaurant supply store for cake ingredients. They really aren't all that much cheaper then the grocery store. In some cases they are more expensive. And the nearest Sams club/ BJs in an hour in either direction. And some of their stuff is cheaper but no so much so that i can save that much.

-K8memphis Posted 2 Nov 2010 , 12:31pm
post #4 of 37

I don't know about my prices & all--but it really is gut wrenching to hear of people working hard and more than giving it away. They've got 50 year old prices. They put the age in vintage.

hunzz71 Posted 2 Nov 2010 , 12:49pm
post #5 of 37

There is no way they are going to be making any money selling at those prices. It almost costs me $15.00 just to buy ingredients to make cheesecake if I don't buy my cream cheese at Costco. They are basically selling cupcakes at $3.00 per dz. I would really like to know how they came up with their pricing and what they were smoking at the time they decided on their prices.

giggysmack Posted 2 Nov 2010 , 12:55pm
post #6 of 37

These people have no clue what they are actually doing to legitamite business or they don't care!

kansaslaura Posted 2 Nov 2010 , 1:04pm
post #7 of 37

I guarantee you they have not taken the time to even figure out what they have IN the products.

They probabaly breezed through the Wal-Mart baking section jotted down prices, laughing that evil.........

" I'll undercut you and show you! I'll bring you to your knees" Laugh icon_evil.gificon_lol.gificon_evil.gif

Then they went right down the aisle in W-M and bought supplies from the giant they're about to slay...The only one laughing now is W-M because they're the only one making ANY $$ in this (possibly fictional, but I highly doubt it) senario!

See....This is their thought process. WOW we can get a cake mix for 1.00--and get 24 cupcakes! WOW.. if we get .25 per cupcake we'll get $6.00 and we'll make FIVE DOLLARS! WOOOO HOOO.. and think of it.. we'll sell 1000's of 'em!!

End of thinking. Period.

OHOHOH!!! I have to add.. they have little dream bubbles over their heads and see themselves rolling about naked in all the cash they'll be raking in.. Ohh yea baby!! Bring it onnnnn!!

johnson6ofus Posted 2 Nov 2010 , 1:34pm
post #8 of 37

Same old story--- remember the "I love Lucy" episode where they make salad dressing? Went to TV to sell it, got lots of orders and $$$$$. And to "break evev" they deliver them on roller skates at the end? <sigh>.

That was 50 years ago- same principles apply now....

costumeczar Posted 2 Nov 2010 , 6:30pm
post #9 of 37

kansaslaura is right, that's probaly just what they were thinking in terms of how much they'd be "making" on that little venture...If you know these ladies you might want to tell them that you noticed that their prices are really low and if they realize tha they're probably not making any money once they pay for all of their expenses, including their electric and water bills. Then shut up, and let them mull it over. If they don't want to do anything about it that's their problem, but you'll at least have said somethng that might make them reevaluate.

peg818 Posted 2 Nov 2010 , 8:49pm
post #10 of 37

K8 you are right it is gut wrenching to see someone working so hard for so little money and in the process makes it harder for those who need to do this for a living.

costumeczar, i thought about bringing their low prices to their attention, but i'm afraid it would be too little too late. We all work in the same facility and they had their fliers everywhere, its a very small town and it would be just as hurtful to them to not honor those prices they have posted. So i have decided to keep my mouth shut and let it be. I do know because of this i wont be doing anymore cakes at work, cause people don't want to pay what you are worth before they certainly aren't going to want to pay now. icon_sad.gif

costumeczar Posted 2 Nov 2010 , 9:03pm
post #11 of 37
Quote:
Originally Posted by peg818

costumeczar, i thought about bringing their low prices to their attention, but i'm afraid it would be too little too late. We all work in the same facility and they had their fliers everywhere, its a very small town and it would be just as hurtful to them to not honor those prices they have posted. . icon_sad.gif




Ewww, that's true. Well, maybe these ladies will get a ton of orders, work their butts off, and realize that they made nothing and give up. If they're not legal anyway they're treading on thin ice, so who knows.

jason_kraft Posted 2 Nov 2010 , 9:22pm
post #12 of 37

I think it would be appropriate to approach them from a purely professional standpoint, mentioning how you've seen their flyers, and you have some experience with the process for starting a fully licensed and legal cake business. It would be even more helpful to have some info already printed up from your local health dept web site along with relevant contact information.

If you get a cold reception, give them a week or two, and if they still have flyers up I would contact the health department. You are certainly free to try waiting them out, but they may not care that they are losing money, they might just be doing it for fun, unaware that they are having an adverse effect on real local businesses.

Ladiesofthehouse Posted 2 Nov 2010 , 9:28pm
post #13 of 37

I have the same thing going on here. A wife of one of the firemen is hanging fliers all over town selling baked goods really cheap. She works out of her home and has 3 large dogs in the house. She is the person you walk by in the grocery store that always has dog hair all over her clothes. Everybody that buys from her knows this and they buy from her anyway so I guess some people just don't care where their food is prepared.

You do have the option of turning them in to the health dept (so do I) but personally I think the no profit/work your butt off all through the holidays scenario will do them in.

costumeczar Posted 2 Nov 2010 , 9:32pm
post #14 of 37
Quote:
Originally Posted by Ladiesofthehouse

You do have the option of turning them in to the health dept (so do I) but personally I think the no profit/work your butt off all through the holidays scenario will do them in.




Yeah, when they're trying to fill all of those orders for their 25cent cupcakes when they'd prefer to be going to a Christmas party they'll realize what they got themselves into.

3GCakes Posted 2 Nov 2010 , 9:49pm
post #15 of 37

25cents isn't even a fair price for a cupcake at a school bake sale.

I've been in the position to just tell them I'll give them the money I would have spent on ingredients and save me my time and hassle having to make them.

Kitagrl Posted 2 Nov 2010 , 10:00pm
post #16 of 37
Quote:
Quote:

See....This is their thought process. WOW we can get a cake mix for 1.00--and get 24 cupcakes! WOW.. if we get .25 per cupcake we'll get $6.00 and we'll make FIVE DOLLARS! WOOOO HOOO.. and think of it.. we'll sell 1000's of 'em!!




This sooo made me laugh!

howsweet Posted 2 Nov 2010 , 10:17pm
post #17 of 37
Quote:
Originally Posted by peg818


costumeczar, i thought about bringing their low prices to their attention, but i'm afraid it would be too little too late. We all work in the same facility and they had their fliers everywhere, its a very small town and it would be just as hurtful to them to not honor those prices they have posted. So i have decided to keep my mouth shut and let it be. I do know because of this i wont be doing anymore cakes at work, cause people don't want to pay what you are worth before they certainly aren't going to want to pay now. icon_sad.gif



So you do cakes as well and you were thinking of reporting them? Maybe I missed something(?). It seems to me that they will learn they are working for nothing and stop. And there is nothing saying they can't change their prices and put out new flyers. They'd only have to honor the prices where people were keeping the old ones.

peg818 Posted 2 Nov 2010 , 10:34pm
post #18 of 37
Quote:
Originally Posted by howsweet

Quote:
Originally Posted by peg818


costumeczar, i thought about bringing their low prices to their attention, but i'm afraid it would be too little too late. We all work in the same facility and they had their fliers everywhere, its a very small town and it would be just as hurtful to them to not honor those prices they have posted. So i have decided to keep my mouth shut and let it be. I do know because of this i wont be doing anymore cakes at work, cause people don't want to pay what you are worth before they certainly aren't going to want to pay now. icon_sad.gif


So you do cakes as well and you were thinking of reporting them? Maybe I missed something(?). It seems to me that they will learn they are working for nothing and stop. And there is nothing saying they can't change their prices and put out new flyers. They'd only have to honor the prices where people were keeping the old ones.





No if you reread my first two posts in this you will see that turning them in isn't an option for me. I just wouldn't do that. Although i do, cake legally be it not often. I am a firm believer of karma. And i think most of us started illegally.

I think i'm just saddened that they would be selling so cheaply. BTW it isn't that hard to get legal here through the dept of ag.

howsweet Posted 2 Nov 2010 , 10:45pm
post #19 of 37

I misread this in your OP. I'm so sorry. I was reading too fast and thought it said you were asking if you should turn them in.

Quote:
Quote:

So if you have gotten this far in this post, please don't tell me to turn them in i won't.


jason_kraft Posted 2 Nov 2010 , 10:49pm
post #20 of 37
Quote:
Originally Posted by peg818

No if you reread my first two posts in this you will see that turning them in isn't an option for me. I just wouldn't do that.
...
BTW it isn't that hard to get legal here through the dept of ag.



Why is it not an option? It's not as if they will be fined or thrown in jail, the Dept of Ag will just tell them what they need to do to get legal. You can even contact the Dept of Ag anonymously, or just mail them a copy of the flyer without a return address.

I just don't see how it's better to let them work themselves to death while losing money and siphoning customers from other businesses, potentially leading to other people losing their jobs. If they have other incomes to support them, this business venture could end up lasting years, are you prepared to wait that long?

-K8memphis Posted 2 Nov 2010 , 11:03pm
post #21 of 37

I don't know--I've related this before but it was before some of you were here--we had 4 cakers turned in by these two chicks who were in business together--here in Elvistown--it was awful--the entire cake community was appalled--the Health Department was pissed--the two chicks went out of business within weeks even though they had had a booming business--they had literally turned in their own cousin--ouch.

It doesn't feel good to watch it happen. It didn't feel good to the ones who got shut down. It sure din feel good to the two chicks either. They were ostracized. It was unpleasant all the way around. Family reunion much? They turned in a little widow who'd been caking for 20 years. Co-ome o-on.

So that's just what happened here a few years ago.

adventuregal Posted 2 Nov 2010 , 11:09pm
post #22 of 37

I'm a consumer and still eat at my favorite bakery for waffles every Sunday...and I think I'd be turned off if I saw a 25 cent cupcake. It would definitely make me question the quality of the product AND the mental state of the baker. That being said, I don't think anyone who buys from her will be someone you'd want as a potential customer. icon_rolleyes.gif
And not to continue a pesky subject, but I saw your comment:
" I am a firm believer of karma. And i think most of us started illegally. "
I refused to earn my money illegally so I waited until I was legal and think there are more gals (and guys) that take this route as well icon_smile.gif Instead of enabling people to do business illegally we should try helping and educating them to do the opposite. There are alot of resources to become legal with help-maybe these ladies need some information. It could end up being a very good thing for them thumbs_up.gif

peg818 Posted 2 Nov 2010 , 11:10pm
post #23 of 37

Jason,

I don't do cakes as a sole income so yes i can wait for years if need be. Not a problem, i have a good job. And yes they can work themselves to death for their own stupidity (guess thats where karma would come in)

My main question was what does it costs you to make a cake. I know that it costs me about $13 to make a two layer 8in cake with box and board.

Whats it cost you, and how do you lower your costs when costs are rising all over?

adventuregal Posted 2 Nov 2010 , 11:17pm
post #24 of 37

K8memphis
where you live they shut you down just because of a complaint? In my area the health dept contacts and educates the person and let them know how to become legal. Therefor, it's up to the baker to take the next step OR basically shut themselves down. I find it really sad that the community ostracized the two legal bakers-they probably spent alot of money and worked really hard to make quality products for the public. .

-K8memphis Posted 2 Nov 2010 , 11:43pm
post #25 of 37
Quote:
Originally Posted by adventuregal

K8memphis
where you live they shut you down just because of a complaint? In my area the health dept contacts and educates the person and let them know how to become legal. Therefor, it's up to the baker to take the next step OR basically shut themselves down. I find it really sad that the community ostracized the two legal bakers-they probably spent alot of money and worked really hard to make quality products for the public. .




Cluster eff. The community was hard on 'em but they brought it on themselves. I do not know for sure or anything but I'd figure the family thing would be nuclear compared to the tiny blip the community could dish up 'cause they are not even cakin' now. Game over. Their own clients did not bale on them that I know of.

Here you have to have commercially zoned property to do cakes so the HD did explain all that and gave all the girls time to do that too with a very real deadline. But I mean one chick who got shut down (I guess cease and desist is a better term) was advertising in the phone book too. I even contacted her previous to the drama and said, "whoa heads up--get outa the freaking phone book!"

Yes they worked hard and yes it's sad. They started in their own home kitchen just like lots of other mortals and the cousin? the cousin they ratted out? taught them and helped them in the beginning.

Gee thanks, Cuz.

How you really gonna get passed that family wise y'know? In this case I think it was a dumb decision that created more negative than positive. Just my impression here on the sideline.

costumeczar Posted 2 Nov 2010 , 11:44pm
post #26 of 37
Quote:
Originally Posted by peg818

Jason,

I don't do cakes as a sole income so yes i can wait for years if need be. Not a problem, i have a good job. And yes they can work themselves to death for their own stupidity (guess thats where karma would come in)

My main question was what does it costs you to make a cake. I know that it costs me about $13 to make a two layer 8in cake with box and board.

Whats it cost you, and how do you lower your costs when costs are rising all over?




To answer your basic question, After all expenses are paid I generally hover around 1/3 of all income going toward expenses, so my net is about 2/3 of my gross. That includes everything, advertising, ingredients, professional memberships, etc. It might be a little more or less depending on what happened that year, but it's always around there.

-K8memphis Posted 2 Nov 2010 , 11:48pm
post #27 of 37

Yes one annonymous phone call.

adventuregal Posted 2 Nov 2010 , 11:52pm
post #28 of 37

Yeah, it doesn't sound like the best decision they made, but at the same time you can turn someone in anonymously...so I don't know why they didn't just take that route. I know of atleast one professional baker on here that will turn someone in on the spot. I sympathize with the older cousin, but we live in a different world now. It would be nice for all of us if we could just stay in our kitchens and work every day-I know I'd like it. Back to the main topic, I'm sure they will realize their prices aren't worth the labor and the whole thing will putter out.

all4cake Posted 2 Nov 2010 , 11:55pm
post #29 of 37

Sam's was selling their cases of cupcakes for less than 18 each (used to be 96 per case then went to 144 per case)

it'd be a small profit but a profit nonetheless

they also sell cases of whole, undecorated cheesecakes and cake layers....

just a thought, but could they be doing that?

There were several that did just that at the club I worked....oh, gosh...and one would buy those cream cakes, remove it from the packaging and place it in a box to give the impression she made them (her words, for real)

costumeczar Posted 3 Nov 2010 , 12:29am
post #30 of 37
Quote:
Originally Posted by all4cake

Sam's was selling their cases of cupcakes for less than 18 each (used to be 96 per case then went to 144 per case)

it'd be a small profit but a profit nonetheless

they also sell cases of whole, undecorated cheesecakes and cake layers....

just a thought, but could they be doing that?

There were several that did just that at the club I worked....oh, gosh...and one would buy those cream cakes, remove it from the packaging and place it in a box to give the impression she made them (her words, for real)




If they're doing that then they're still dumb. Any piddly cash they make doing that would be eaten up with gas to go back and forth with their bounty from Sam's, then they'd be making, oh,probably about $2 an hour.

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