A Question Nobody Has Asked........

Business By Annabakescakes Updated 8 Jan 2011 , 1:43am by Mama_Mias_Cakes

Annabakescakes Posted 7 Jan 2011 , 3:24am
post #1 of 46

SUCKER!! It's a pricing question...sorry.....But this one is different, i swear!

Before I get the same answer about ingredients and consumables and insurance and depreciation and HD fees and my salary and rent and all that, I have done that. And I can make a comfortable living at my pricing ($2.50 buttercream, $3.50 fondant, $4.50 carved) with just a few cakes a week, which is all I want to do. I just want to put my kids in private school and replace my carpet! Everything else is bonus.

I am going to be a commercial kitchen in garage business, appointment only. I have recently (re)looked at my "competition' in the area and they have both raised their prices. One place does nice clean work with a nice vintage '70's Wilton flair. Last year their prices were $1.75 a serving (!!!) and they only do buttercream, with some fondant accents. No carved cakes. I just checked out their website again and it now says they are $2.50 a serving, but they have some crazy-butt chart on there:

Wedding Cakes: $2.50 per slice

Sheet Cakes
1/4 Sheet $15.00 Serves15-20 guests
1/2 Sheet $22.00 Serves 35 guests
Full Sheet $40.00 Serves 60-70 guests

Round Cakes
6" $13.00 Serves 6-8 guests
8" $15.00 Serves 12-14 guests
10" $22.00 Serves 16-20 guests
12" $25.00 Serves 25-30 guests

Flavors
White - Yellow
Chocolate - Marble

Fillings
$1.00 extra per cake
Extras
Booties: $2.00 a pair
Basket Weave: $2.00 for 6" & 8"
$4.00 for 10" & 12"
Cake Drawings: $6.00
Piping: $10.00
Dipped Strawberries: $1.25 each
Cupcakes: $6 a dozen


Yes, it is shocking, I know!!! Plus I have about 30 flavors and fillings and that $2.50 a serving was to include fillings. She has 3 and mixes 2 of them to make 1 more. She is retail and in the city, about 12 miles from me.

So I am thinking that if she is getting this much for retro cakes with no imagination and 3 flavors, I should charge more, right?

The other bakery is actually talented, but pretty sloppy because they overbook weekly, they are retail as well and about 20 miles from me. They do fondant, 3D and deco pac cakes, and (hideous) nudes. (*shiver* REALLY hideous nudes) They have a base price of $3.10 buttercream, $4 fondant and I remember about $5 or more for carved cakes, about 4 years ago. They have a horrible website and petrified dummies collecting spiders and a roach problem. And fillings are included. They use sleeve fillings and mixes, with nothing added. Plus their icing cracks like nothing you have ever seen!

And I guess I should charge this much too, right? My thought is that people may wonder why it is so cheap. We have a cake lady or two that are legal, and about a dozen illegal. Of course the illegals pricing is all over the board. And the legal pricing is comparable, but they don't advertise pricing. (I called last year)

I was thinking of having the same pricing as the second bakery, but maybe a Budget Bride option, like rough iced with borders or with that funny comb they use at Walmart and borders. Or should I just stick to my pricing? I really do want to be affordable, but I want to be competitive. Plus I used to work at one of those places and I am sure to run into them and I don't want hard feelings and to "undercut" bakeries in my area.

Please help me, I feel so torn about this.

45 replies
playingwithsugar Posted 7 Jan 2011 , 4:11am
post #2 of 46

Not funny

Sorelle Posted 7 Jan 2011 , 4:26am
post #3 of 46

Just wanted to let you know that sugar and flour have both gone up in price this last year and will continue to go up even more this year, at least that is what has been projected by economist. If you were me I'd match her prices or maybe a little higher since you offer carved and fondant cakes.
I thought it was funnyicon_smile.gif

KarisCakes Posted 7 Jan 2011 , 4:28am
post #4 of 46

I don't know much about this, but I think their prices are fair, and I would stick pretty close to what they do. Like you said, you don't want to undercut them. But you can't go to far over them or people won't choose you.

cupadeecakes Posted 7 Jan 2011 , 4:36am
post #5 of 46

I started my prices very cheap and went up as my amount of orders went up and my skills improved. If you don't have enough business, keep your prices the same. If you are turning a lot of people down you can then raise your prices. Figure out what you want your work to stand for and stick to it. It you don't want to do the side comb/economy option, that's ok. A business can't be the cheapest and the best...... I don't want to do sheet cakes and $30 orders anymore. I have a 500 sq foot legal kitchen built onto my house. By myself in the kitchen, except for some husband help, we sold over $52k last year which I'm quite fine with. We are $3/round cake plus art at $20/hr and it includes delivery. Publix is $3 w/o delivery. I think I'll have in increase fairly soon. Best of luck to you!

Annabakescakes Posted 7 Jan 2011 , 4:41am
post #6 of 46
Quote:
Originally Posted by playingwithsugar

Not funny


Sorry, there are SO many pricing posts on here, and i really haven't seen one like this. Here is a little cake for your trouble. birthday.gif

Annabakescakes Posted 7 Jan 2011 , 4:50am
post #7 of 46
Quote:
Originally Posted by Sorelle

Just wanted to let you know that sugar and flour have both gone up in price this last year and will continue to go up even more this year, at least that is what has been projected by economist. If you were me I'd match her prices or maybe a little higher since you offer carved and fondant cakes.
I thought it was funnyicon_smile.gif


I hadn't really noticed a whole lot, but eggs, I did. I am a doctored mix baker, I did notice my mixes went up .12 a box. but that is .01 a serving, or .01 for every two cupcakes. I wont sweat that, but I guess if they are continuing to rise, that is another matter. Thanks.
thumbs_up.gif

SBaker Posted 7 Jan 2011 , 4:50am
post #8 of 46

I always tell my students to price their products so that when at 3 a.m. and they realize they will not get to sleep that night and have to work the next day, they are still happy with what they are doing.....no matter what anyone else is charging.

Annabakescakes Posted 7 Jan 2011 , 4:55am
post #9 of 46
Quote:
Originally Posted by KarisCakes

I don't know much about this, but I think their prices are fair, and I would stick pretty close to what they do. Like you said, you don't want to undercut them. But you can't go to far over them or people won't choose you.




I wouldn't DREAM of going higher than them, lol! My BC base price was $2 last year, the new higher prices are for my overhead once I am legal.
I believe there is a market for everyone in a big city. (Cincinnati) Right across the river (20 miles) there is a cakery that is high end and they are for sale. Apparently it has switched hands in the last 2 years and are now no longer taking cakes, but the previous owner booked every weekend. Base prices were $6 and went up to $12. But i also read that Cinci is bankrupt. But that cakery was really snobbish, and I would like to be friendlier! More approachable and helpful. I guess it could be the prices, but I am not so sure.

KarisCakes Posted 7 Jan 2011 , 5:25am
post #10 of 46

I was actually glad to read this post, because I have been wondering if I was charging a fair amount. I don't charge my the serving because servings vary so much. I think the idea that a 10 inch cake could feed 16-20 people is ridiculous! It sure wouldn't feed that many in my group of friends! LOL! I am a cake mix baker, and I figured out that I spend about $8 for every cake mix I use, so I charge about $20 per cake mix. Therefore a 3 layer fondant decorated cake (like the christmas one I posted today) takes 2.5 cake mixes, and cost $50. I make less money per hour on small cakes, and more on big ones. I have to learn not to spend so much time on little cakes!

Annabakescakes Posted 7 Jan 2011 , 5:26am
post #11 of 46
Quote:
Originally Posted by cupadeecakes

I started my prices very cheap and went up as my amount of orders went up and my skills improved. If you don't have enough business, keep your prices the same. If you are turning a lot of people down you can then raise your prices. Figure out what you want your work to stand for and stick to it. It you don't want to do the side comb/economy option, that's ok. A business can't be the cheapest and the best...... I don't want to do sheet cakes and $30 orders anymore. I have a 500 sq foot legal kitchen built onto my house. By myself in the kitchen, except for some husband help, we sold over $52k last year which I'm quite fine with. We are $3/round cake plus art at $20/hr and it includes delivery. Publix is $3 w/o delivery. I think I'll have in increase fairly soon. Best of luck to you!




You have GORGEOUS cakes, Jenniffer! I spent about an hour checking out your cakes with my kids, about 3 weeks ago. I was so impressed, but my sweet little man said, "Wow, that cake is so beautiful, but you could do that, Mommy." I had to tell him that it's okay that some cakes are better than mommy's and these are better." But he is so sweet! I think you could definitely do an increase, you have the skill to justify it.

And i know that I have the skill to cost as much as the second bakery I mentioned. I go in there every couple months and I am amazed at the junk they put out. They don't even attempt to get even edges or smooth sides. or square corners.

I do want to be affordable for brides on a budget, and there are some cakes I am willing to do cheaply. When I see girls with horrible cakes I think, "Girl, we could of worked something out!" She could have cleaned my boys' bathroom and i would have done it at cost!

I am afraid that I will want to raise my prices or not be taken seriously if I am lower than bakery #2. But I want to save people from walmart. Can I have the best of both worlds?

Annabakescakes Posted 7 Jan 2011 , 5:31am
post #12 of 46
Quote:
Originally Posted by SBaker

I always tell my students to price their products so that when at 3 a.m. and they realize they will not get to sleep that night and have to work the next day, they are still happy with what they are doing.....no matter what anyone else is charging.




I have been there too many times to count! I have volunteered in the nursery at church on Saturday night with no sleep since Thursday, and then gone home and finished another cake and cleaned the kitchen, then volunteered again Sunday morning with 4 hours sleep in 3 days. But man, were they cute, and i needed the money.

Annabakescakes Posted 7 Jan 2011 , 5:46am
post #13 of 46
Quote:
Originally Posted by KarisCakes

I was actually glad to read this post, because I have been wondering if I was charging a fair amount. I don't charge my the serving because servings vary so much. I think the idea that a 10 inch cake could feed 16-20 people is ridiculous! It sure wouldn't feed that many in my group of friends! LOL! I am a cake mix baker, and I figured out that I spend about $8 for every cake mix I use, so I charge about $20 per cake mix. Therefore a 3 layer fondant decorated cake (like the christmas one I posted today) takes 2.5 cake mixes, and cost $50. I make less money per hour on small cakes, and more on big ones. I have to learn not to spend so much time on little cakes!




Yeah, a 10" serving 16- 20 is ridiculous, it serves more like 38. I have seen pricing like that, and honestly, it may "work out" a lot of times, but, makes no sense. A mix serves 12 and if I priced my cakes that way, it would be like giving away 2 servings for every 10 in my illegal prices. in $3 per serving prices, it is throwing away $16 for every $20 you make.

DaPom Posted 7 Jan 2011 , 6:08am
post #14 of 46

I don't have "set" prices for my cakes - by size or serving. Everything I do is custom, and I have to buy my supplies from the local grocery store just like everyone else, so I have a worksheet that I use to price my cakes. The more complicated the design, the more you pay. I have charged more for a 9" round cake than I have for a full sheet cake because of the level of detail.

I give the customer an estimate (close but I shoot to be on the high end) at the consultation and let them know I will get them a firm price and contract within 48 hours. I do this just in case the only grocery store in town decides that chickens are overworked and eggs are $3.50 a dozen this week instead of the $.99 they were last week. icon_surprised.gif

The only complaint I have had about my cakes is that there were not enough leftovers after the event. icon_lol.gif

Annabakescakes Posted 7 Jan 2011 , 6:12am
post #15 of 46
Quote:
Originally Posted by DaPom

I don't have "set" prices for my cakes - by size or serving. Everything I do is custom, and I have to buy my supplies from the local grocery store just like everyone else, so I have a worksheet that I use to price my cakes. The more complicated the design, the more you pay. I have charged more for a 9" round cake than I have for a full sheet cake because of the level of detail.

I give the customer an estimate (close but I shoot to be on the high end) at the consultation and let them know I will get them a firm price and contract within 48 hours. I do this just in case the only grocery store in town decides that chickens are overworked and eggs are $3.50 a dozen this week instead of the $.99 they were last week. icon_surprised.gif

The only complaint I have had about my cakes is that there were not enough leftovers after the event.
icon_lol.gif




I keep getting the complaint that they are too pretty to cut! icon_lol.gif

jason_kraft Posted 7 Jan 2011 , 6:18am
post #16 of 46
Quote:
Originally Posted by cupadeecakes

I started my prices very cheap and went up as my amount of orders went up and my skills improved. If you don't have enough business, keep your prices the same. If you are turning a lot of people down you can then raise your prices.



I'm also a big believer in adjusting prices to compensate for market demand and your optimal work load. If you have too much idle time and you want to increase profits, you need to develop your competitive advantages and/or lower your prices (keeping them above your cost of course, with your wage factored in). If you find yourself turning down orders left and right, it's time to either increase capacity or raise prices.

The market's demand for your products is a function of your prices and competencies as well as those of your competitors. When facing competitors with insanely low pricing, your best bet is to focus on a target demographic that is less price-sensitive and play up your quality advantages. If you need more business while the aforementioned marketing strategy plays out, feel free to temporarily lower your prices with a "sale".

noahsmummy Posted 7 Jan 2011 , 8:31am
post #17 of 46

a little off topic... but are eggs really only 99c there???? they have just gone upto $2.71 here in aus!

indydebi Posted 7 Jan 2011 , 12:48pm
post #18 of 46
Quote:
Originally Posted by Annabakescakes

Yeah, a 10" serving 16- 20 is ridiculous, it serves more like 38. I have seen pricing like that, and honestly, it may "work out" a lot of times, but, makes no sense. A mix serves 12 and if I priced my cakes that way, it would be like giving away 2 servings for every 10 in my illegal prices. in $3 per serving prices, it is throwing away $16 for every $20 you make.


This also caught my eye. I'd LIKE to tell people, "Oh if they're telling you that a 10" cake only serves 16 people then they are trying to scam you into buying twice as much cake. Everybody knows a 10" cake will serve more than twice that many people!"

Seriously, think about it. I'm having a party for 25 people. They tell me a 10" cake serves 16, therefore I HAVE to buy two 10" cakes, costing me twice as much at their "cheap" pricing.

It ain't cheaper if I have to spend twice as much.

KarisCakes Posted 7 Jan 2011 , 3:12pm
post #19 of 46

I must not be understanding what you guys are saying. I was actually saying a 10 inch cake would serve LESS than 16-20 people. I was taking about a single layer, 10 inch, round cake. I assume you all must be talking about a cake of several layers. If not, do you really get 38 servings of cake out of a single 10 inch round? I use 1 mix in a 10 inch round, so I'm thinking it serves 12 or less, by the time you level and trim it.

Also, and I'm a newbie, so bare with me, what do you mean by legal and illegal pricing?

LindaF144a Posted 7 Jan 2011 , 3:54pm
post #20 of 46
Quote:
Originally Posted by indydebi

Quote:
Originally Posted by Annabakescakes

Yeah, a 10" serving 16- 20 is ridiculous, it serves more like 38. I have seen pricing like that, and honestly, it may "work out" a lot of times, but, makes no sense. A mix serves 12 and if I priced my cakes that way, it would be like giving away 2 servings for every 10 in my illegal prices. in $3 per serving prices, it is throwing away $16 for every $20 you make.

This also caught my eye. I'd LIKE to tell people, "Oh if they're telling you that a 10" cake only serves 16 people then they are trying to scam you into buying twice as much cake. Everybody knows a 10" cake will serve more than twice that many people!"

Seriously, think about it. I'm having a party for 25 people. They tell me a 10" cake serves 16, therefore I HAVE to buy two 10" cakes, costing me twice as much at their "cheap" pricing.

It ain't cheaper if I have to spend twice as much.




This is not a disagreement on this, but don't you think it depends on the occasion and where it is? I used to get this question all the time and I would tell people that same thing. Most of the time if it was a family gathering and they wanted to cut wedges, then a 10" would serve 16-20. But if they were having a bigger event at say a restaurant and they were being served by a server it would be cut differently and serve like 38. People always liked that answer. It seems if they were serving the cake personally, they wanted to look generous versus it being okay to get smaller servings from a restaurant. And this question usually came up on the smaller cakes we offered. People could not figure out how a 8" could serve up to 12 people, and neither could I! I took a 8" parchment circle and folded it out and it seemed like they were awful pieces. Most people would always buy a 10" for 12 people and we always heard how they did not mind leftovers. In fact we used to get customers who bought a 12" or 14" just to have leftovers.

jason_kraft Posted 7 Jan 2011 , 4:19pm
post #21 of 46

We tell customers that a 10" round double layer cake is 14-18 party-size servings, and we've found this is pretty accurate in practice assuming wedges are cut about 2" across at their widest. Wedding-size servings are typically half the size (2.75 sq in vs. ~5 sq in for a wedge), so we double the number of servings if the cake is for a wedding.

Annabakescakes Posted 7 Jan 2011 , 4:22pm
post #22 of 46
Quote:
Originally Posted by KarisCakes

I must not be understanding what you guys are saying. I was actually saying a 10 inch cake would serve LESS than 16-20 people. I was taking about a single layer, 10 inch, round cake. I assume you all must be talking about a cake of several layers. If not, do you really get 38 servings of cake out of a single 10 inch round? I use 1 mix in a 10 inch round, so I'm thinking it serves 12 or less, by the time you level and trim it.

Also, and I'm a newbie, so bare with me, what do you mean by legal and illegal pricing?




I do mean a 2 layer, which is typically how a round cake is prepared. A 1 layer is just not as nice looking, IMHO. And I do understand that you meant it would serve less. And a 1 layer 10" serving 16 sounds right to me. I am a wedding cake cutter more often than I would like to be, and I serve the standard wedding sized pieces, cut like Debi recommends http://cateritsimple.blogspot.com/2009/06/it-serves-how-many.html I use 3 mixes to make a 10" 2 layer cake.

And I can tell you, that I LOVE my cake, I can eat the trimmings by the handful, but a 1"x2"x4" slice, iced and filled is PLENTY! And unless people are gluttons, or football players, then it is generally enough for most, especially after a meal. If you are eating it as a meal, then maybe not. I always ask my Brides whether they are having a meal or appetizers and when they plan to serve the cake, and if there is alcohol, and if it is free. All that factors into how much cake you need.

And by illegal and legal prices... It is illegal in 36(-/+) states to sell ANY food out of your home. It is illegal in my state. So I do not charge quite as much as I would like since I operate "under the radar" I do not have the "overhead" such as license, insurance, business fees, rent, employees, and all that. Once I am legal, I will have most of all that, and more, and therefore will charge more to make up for it.

If you are selling your cakes, I suggest you look into whether or not it is legal in your state. You can look at the "sticky" in the index of this forum, that is written my KellyM or call your local heath dept, or dept of agriculture.

Annabakescakes Posted 7 Jan 2011 , 4:29pm
post #23 of 46
Quote:
Originally Posted by jasonkraft

We tell customers that a 10" round double layer cake is 14-18 party-size servings, and we've found this is pretty accurate in practice assuming wedges are cut about 2" across at their widest. Wedding-size servings are typically half the size (2.75 sq in vs. ~5 sq in for a wedge), so we double the number of servings if the cake is for a wedding.




OMG, I cannot imagine eating that much cake after a meal! I assume that there is no other food at the party? I don't even deal in party sized servings, that is huge! (And I became a big girl since my last baby, and I don't eat pieces that big.) I let people know what size to cut it, and give them a quick rundown of how to cut it.If they want giant pieces, they can order a bigger cake.

Annabakescakes Posted 7 Jan 2011 , 4:40pm
post #24 of 46
Quote:
Originally Posted by indydebi

Quote:
Originally Posted by Annabakescakes

Yeah, a 10" serving 16- 20 is ridiculous, it serves more like 38. I have seen pricing like that, and honestly, it may "work out" a lot of times, but, makes no sense. A mix serves 12 and if I priced my cakes that way, it would be like giving away 2 servings for every 10 in my illegal prices. in $3 per serving prices, it is throwing away $16 for every $20 you make.

This also caught my eye. I'd LIKE to tell people, "Oh if they're telling you that a 10" cake only serves 16 people then they are trying to scam you into buying twice as much cake. Everybody knows a 10" cake will serve more than twice that many people!"

Seriously, think about it. I'm having a party for 25 people. They tell me a 10" cake serves 16, therefore I HAVE to buy two 10" cakes, costing me twice as much at their "cheap" pricing.

It ain't cheaper if I have to spend twice as much.




I use this as my motto when shopping for all cleaning and health a beauty products. I buy generic everything I can, but if I have to use twice as much, then I buy the "good stuff" which is normally priced at 50% more. Like if I buy Palmolive dish soap for $1.50 and have to wash all my dishes with twice as much, or buy the Dawn, at $2.25 and wash them with half as much then the Dawn is cheaper!

But a lot of people just don't "get it", and are suckered in by that kind of pricing.

jason_kraft Posted 7 Jan 2011 , 4:48pm
post #25 of 46
Quote:
Originally Posted by Annabakescakes

OMG, I cannot imagine eating that much cake after a meal! I assume that there is no other food at the party? I don't even deal in party sized servings, that is huge!



A frosted 10" round double layer cake has about 10,000 calories. Splitting that up into 14-18 pieces yields 580-745 calories per slice. That's quite a bit less than serving sizes for slices of cake at restaurants, which are typically in the 800-1300 calorie range.

You can argue that people shouldn't be eating that much for dessert, but (in my experience at least) that's the reality of how much cake people eat at parties.

Annabakescakes Posted 7 Jan 2011 , 4:52pm
post #26 of 46
Quote:
Originally Posted by noahsmummy

a little off topic... but are eggs really only 99c there???? they have just gone upto $2.71 here in aus!




It depends on where you go, and where they are in the ebb and flow of their fluctuation. In the last year I was able to get them for .89 cents at Aldi, $1.18 at Walmart, and $1.35 at Kroger, and $2.20 at Remke. I don't shop at Remke, I just saw it in their ad. My DH does most of the shopping, so I have no clue what the prices are right now.

Remke also sells a $1.20 cake mix for $2.60. You get a can of generic green beans for $1.30, but at Walmart it is .60 cents.

All these stores are practically within shouting distance of each other, so I shop around, when I shop.

-K8memphis Posted 7 Jan 2011 , 4:59pm
post #27 of 46

My cakes would probably have many more calories than those figures if that is the average amount. Although that's a new one on me to slice and dice it by calorie count.

A 2" wedge cut from a 10" cake is a massive serving to me.
Five inches long and four inches tall--that's big.

When I had my tea-room I could not sell desserts to save my life. So I cut them into smaller bites and asked if they would be interested in a bite of dessert. And the whistle blew and the dessert train started chugging out of the kitchen and into the dining room. Whooot whoooo

Same size serving, same price, cut up in smaller bites. Go figure but it worked.

-K8memphis Posted 7 Jan 2011 , 5:03pm
post #28 of 46

And no doubt about it--I can eat twice that (big) amount or more but I'm not gonna be seen with that big a piece of cake on my plate at one time ugh uh no way.

Add it all up from breakfast through dinner and you can probably assemble half the cake again but a little at a time thank you very much.

icon_biggrin.gif

Annabakescakes Posted 7 Jan 2011 , 5:05pm
post #29 of 46
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by Annabakescakes

OMG, I cannot imagine eating that much cake after a meal! I assume that there is no other food at the party? I don't even deal in party sized servings, that is huge!


A frosted 10" round double layer cake has about 10,000 calories. Splitting that up into 14-18 pieces yields 580-745 calories per slice. That's quite a bit less than serving sizes for slices of cake at restaurants, which are typically in the 800-1300 calorie range.

You can argue that people shouldn't be eating that much for dessert, but (in my experience at least) that's the reality of how much cake people eat at parties.




That is nearly half to over half the recommended calorie intake for most people for a whole day. And when DH and I go out to eat, we split a dessert. Yeah, Dh can eat the whole thing, but I can't. And I out weigh him by 15 pounds. And he is 4" taller than me, so I don't need the calories.

Speaking of which...Do any of you ladies know how to lose weight? I have never had to, and I am so fat right now. I am hating life! I make myself sick when I see my clothes or when I see me without them! Can you PM me? Or maybe I should start a thread in the lounge? Are there any threads like that already? I can't get the darn search engine to yield any good results for anything. I gotta make lunch right now though.

Annabakescakes Posted 7 Jan 2011 , 5:09pm
post #30 of 46
Quote:
Originally Posted by -K8memphis

And no doubt about it--I can eat twice that (big) amount or more but I'm not gonna be seen with that big a piece of cake on my plate at one time ugh uh no way.

Add it all up from breakfast through dinner and you can probably assemble half the cake again but a little at a time thank you very much.

icon_biggrin.gif




That is my problem, a little piece of cake all day long, straight to my thighs!

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