Best Way To Conduct Pricing Market Research?

Business By tsal Updated 17 Nov 2010 , 12:34pm by indydebi

tsal Posted 16 Nov 2010 , 10:50am
post #1 of 8

What's the best (most courteous) way to go about determining competitor pricing? Should I email bakeries with a pic of a cake they have made and ask how much they charged for that particular cake? I find that bakers around here are somewhat secretive about pricing. When I call, they always encourage me to come in and sit down (because they assume I want to buy a cake). I would never pretend and waste someone's time like that, obviously. But I have yet to get someone to say, "Buttercream starts at XX and fondant at XX."


7 replies
AbouttheCake Posted 16 Nov 2010 , 11:55am
post #2 of 8

Your best bet is to price out your costs first and figure your pricing. If you have to adjust for your area (because some areas just can't get the same profit margin) then call around.

You could call a baker and ask and just tell them you're a new baker near the area and want to be sure you are not undercutting them. icon_wink.gif

AmysCakesNCandies Posted 16 Nov 2010 , 1:26pm
post #3 of 8

I sometimes get information from Brides when they come for consults, it helps sometimes to listen to your potential customers. I adjust my prices every January and avoid changing them throughout the year so my quotes all expire at the same time and it is less confusing. This is my first year in North Carolina and I just started out using my old pricing from where I lived before, well I have had several brides comment on how much cheaper my cakes were than others they met with, so clearly my prices are going up in January. I have started researching and found that Some of the bakeries (mainly store front bakeries) have some general pricing listed online. So I took all the online info I could find. I have also emailed other bakers and asked them where thier buttercream & fondant wedding cakes start price wise. All of us who have a cake bussiness can quickly say off the top of our head a general price range for our cakes- so its not a lot of extra work. It doesn't give me an exact quote but it gives me an idea if I am in the ball park. .

TexasSugar Posted 16 Nov 2010 , 3:22pm
post #4 of 8

While you sorta want to be in line with other bakeries it is more important to figure out what you have to make on your cakes to pay for the supplies/labor/profit. Everyone has different expenses and overhead so it is hard to compare with them for what you should be charging.

A Bakery that uses cake mixes, one that bakes from scratch and one that bakes with the best of the best ingredients will all have different expenses when shopping for ingredients. As will a bakery that shops bulk vs one that doesn't.

My day job is at a roofing company. Sure we could call around and find out what other people are charging. But we have to make sure we are charging enough for our materials, labor costs for our employees, insurances, office rent plus other expenses and still make a profit at the end of the day.

tsal Posted 16 Nov 2010 , 8:50pm
post #5 of 8

Good points TexasSugar, but I fund that it takes me a long time to make a cake (8-10 hrs total), perhaps because I don't have a ton of cakes under my belt - so, the question becomes, how do I charge for time if I'm slow? Or maybe I'm not slow? I'm still trying to figure that out! Caking is tine-consuming so it's hard to judge!

TexasSugar Posted 16 Nov 2010 , 9:06pm
post #6 of 8

Those are the personal things you have to factor in and you have to be realistic about the timing. I would say work with an average number. Do a couple of cakes and keep track of it and see if you feel it is a reasonable time or if you are infact just taking forever.

As you improve you can always up your price per hour to accommodate that.

If our crew takes longer to complete a job than we factored in, then we take a hit on the profit. But on the next job they may finish faster, there for we make more profit. In the end some things will average out.

cheatize Posted 17 Nov 2010 , 3:38am
post #7 of 8

When I calculate time, I use what I think a reasonablly experienced person would take to do it. I know I am slow and the client shouldn't have to pay because I'm really pokey right now. However, I don't want to use a time that is so fast that it's unrealistic goal for me to attain.

indydebi Posted 17 Nov 2010 , 12:34pm
post #8 of 8

following up on what Texas said, my husband's family is in the car repair biz and it's very common for the car repair industry to bill labor based on "book time". the repair manuals state how long a particular repair should take and that's waht is charged for labor. If the book says 4 hrs, the customer is billed for 4 hrs labor. If the guy gets it done in 2 hours, the shop makes a profit. If it takes 6 hrs, the shop takes a hit.

It's a very common practice. When I worked in manufacturing and had to quote out a special construction item, we had an established average mfg'ing time. If the machine broke or if we had to re-do it (similar to dropping a cake and havign to rebake or fondant tears and we have to re-roll it), then we ate the expense.

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