Pricing Cake

Decorating By Serindy Updated 1 Jul 2011 , 1:21am by WhenTalentsCollide

Serindy Posted 30 Jun 2011 , 2:30pm
post #1 of 10

Hello, I am having some issue deciding how to price a cake. I have been making cakes for about a year but just as a hobby for family and friends, I have never charged for one. I would like to sell cakes in the future, but am in grad school right now, so I have minimal time.

An acquaintance asked me if she could order a cake. I checked and it is legal for me to bake out of my home to sell, and I will have time that week to make it. But I have NO idea how much to charge.

There are a couple of other people in the area that bake from their homes and I feel that for 2 of them, my cakes are equal in quality to theirs (the third women is far above my skill level, her cakes are truly amazing!) My sister offered to e-mail them and ask how much they would charge for a cake similar to what this person wants to order from me.

We have not been able to get a straight answer from anyone! They all requested a date before they would provide a price, even though my sister said that she didn't have a certain date in mind, she was just considering her options. Since no one would provide a quote without a date, she just picked a date. One woman said she is booked that day, and would not provide a quote. One woman said she would try to give us a quote by the end of the week but she was really busy so she might not get around to it. The third woman, I have not yet heard back from.

Did I go about this is the wrong way? Does this seem very unprofessional? I feel that I need to know how much others in the area sell their cakes for so that I price mine fairly based on my experience and skill level. I don't want to undercut them a lot and devalue the cakes, but I don't want to charge above what the market is either.

Does anyone have any advice? icon_sad.gif

9 replies
TexasSugar Posted 30 Jun 2011 , 2:48pm
post #2 of 10

While it is good to know what others are selling their cakes for, you really have to come up with your own price based off your own costs. It varies so much from person to person.

Here is a thread that will give you some idea on how to come up with your pricing.

http://cakecentral.com/cake-decorating-ftopict-694973-pricing.html

I also personally don't like the call around thing. But I think that comes from my day job. We get people that call wanting a estimate on how much we would charge to do their roof. They always want to give us some measurements, but they end up balking when we tell them we come out and measure/expect the roofs our selves. After a while you learn the phrasing people use when they are bidding a job and don't want to do the math to figure out how much it costs them.

jason_kraft Posted 30 Jun 2011 , 2:51pm
post #3 of 10

Instead of basing your prices on what other people charge, you should find out what your own costs are first, and then price accordingly. Your cost consists of ingredients, labor (# of hours needed to make the cake * your hourly wage), and overhead (annual costs for added utilities and insurance divided by # of cakes per year). Once you find out your cost, your price should be 20-30% higher.

You should also make sure you have business liability insurance before you sell cakes, homeowner's insurance policies typically exclude commercial activity. Also be sure to carefully record income and expenses for filing income taxes.

Bluehue Posted 30 Jun 2011 , 3:05pm
post #4 of 10

Welcome to CC Serindy...


There are two ways to calculate the final cost of your cake.
Some chage X ammount per slice and
some charge for the cake - then how many flowers/toppers/type of fillings/whether the cake is Fondant covered or BC covered....etc.

Me - i charge per slice (as in how many the cake will feed)
If my customers want their cake for Coffee size portions then less cake is required - compared to a customer wanting to serve Dessert size portions.

To get to your final figure - calculate you ingrediants - your time - and everything else that goes into making and creating the final product.
Electricity/Gas = re baking/mixing/running your dishwasher
Petrol = buying all ingrediants/Ribbons/Cake Boards/Supports ect.
Actual Ingrediants
And everything else that goes into making a cake.
Then remember to allow $'s for paying yourself.

I know how much it costs to create a cake - then i have my hourly rate for how long it takes me...depending on degree of difficulty and what needs to be added.

Perhaps you can Google some Cake outlets in your area(wherever that may be) and see what the general charge is for a single tier/3 tier ...etc.

It is very hard for anyone to say exactely what you should/could charge - as we all live in different corners of the world - and prices vary so much from Town to Town - State to State and Country to Country.

Some may charge $2.75 per coffee slice of cake - whereas others may charge $6.00 per slice

For a cake to feed 100 people the final cost could be either
100 x $2.75 = 275.00
or
100 x $6.00 = 600.00

Plus - it also depends on your level of cake making.

Sorry i haven't given you an exact dollar ammount for say a 2 tiered cake - but without a picture or knowing what kind of creation you wish to make - its a little hard to do so.

Let us know where you are - and if you can post a ink to the kind of cake you wish to make - that might help us.

Again - welcome to CC

Bluehue. icon_smile.gif

southerncross Posted 30 Jun 2011 , 3:17pm
post #5 of 10

http://www.maisiefantaisie.co......-cake.html

I price my cakes at $3.50 to $4.00 a serving (but then I'm in a poor rural area)...if anyone complains, I'm going to show then the cake on this link ...it's $875( serving plate not encluded!) ...I calculate that cake would serve 30 very small portions which works out to just under $30 a serving!...see, even if I raise my prices to $8 a serving, it's a bargain (smiles)

Serindy Posted 30 Jun 2011 , 4:38pm
post #6 of 10

Thanks everyone for your advice and kind welcome! I think I will do as you all recommended and spend a bit of time figuring out my actual costs and go from there. I had never really done that before since I was just doing it for my own enjoyment and giving them away.

And I will definitely have to check into the insurance thing.

For anyone who was wondering, the cake that this lady wants is pretty much a replica of the 2 tier blue beach cake in my photos. It's not a complicated cake at all, just 2 round tiers covered with fondant. Making and painting the chocolate shells does take a bit of time but I have lots of practice so am pretty fast at it.

Thanks again everyone!

Bluehue Posted 30 Jun 2011 , 4:43pm
post #7 of 10
Quote:
Originally Posted by Serindy

Thanks everyone for your advice and kind welcome! I think I will do as you all recommended and spend a bit of time figuring out my actual costs and go from there. I had never really done that before since I was just doing it for my own enjoyment and giving them away.

And I will definitely have to check into the insurance thing.

For anyone who was wondering, the cake that this lady wants is pretty much a replica of the 2 tier blue beach cake in my photos. It's not a complicated cake at all, just 2 round tiers covered with fondant. Making and painting the chocolate shells does take a bit of time but I have lots of practice so am pretty fast at it.

Thanks again everyone!




Your welcome - and may i say - thats a gorgeous coloured cake you mentioned thumbs_up.gif

What size where those tiers?

Bluehue

gatorcake Posted 30 Jun 2011 , 5:50pm
post #8 of 10
Quote:
Originally Posted by southerncross

http://www.maisiefantaisie.co......-cake.html

I price my cakes at $3.50 to $4.00 a serving (but then I'm in a poor rural area)...if anyone complains, I'm going to show then the cake on this link ...it's $875( serving plate not encluded!) ...I calculate that cake would serve 30 very small portions which works out to just under $30 a serving!...see, even if I raise my prices to $8 a serving, it's a bargain (smiles)




What is the relevance of a high end UK bakery to the prices you charge? Simply because they are able to charge that level due to the clients they serve does not mean your prices are justified. Note I am not saying they are not. (I think your scheme seems quite reasonable and fair). Rather that what some high bakery charges does not make you reasonable.

If your prices are fair for the market your serve then they are fair and not more reasonable because you could be charging $30 per serving simply because you cannot (not because of the level of skill but because you would not have the customers who could afford to pay that much). No need to show them what some high end bakery charges to justify your legitimate pricing scheme.

southerncross Posted 1 Jul 2011 , 12:40am
post #9 of 10

It was a joke, Gatorcake

WhenTalentsCollide Posted 1 Jul 2011 , 1:21am
post #10 of 10

Yes, first thing to do is to figure out what it's costing you to make a cake, including electric, gas, any utilies... and you don't need to figure this out exact, juts kind of give an estimate... i typically factor in $2 per cake i bake for untilies, including the making of BC...

next, obviously you should figure out how much it cost for ingredients which is easy enough...

from there, you can just say i want to make a certain profit percentage or figure in an hourly wage for your time... i personally don't figure time into the equation at this point cause it takes me longer to make things since we are somewhat new... i simply say i think this cake is worth this much, and go from there...

the good way to do it though is per serving and on a skill level... fondant work should be more, cause it's more costly and also more time consuming... then if you are doing extra fondant work for characters or decorations figure that's another level cake... some people do level 1,2,3 and price accordingly for each level... what level something is will be somewhat subjective, but it's your business so price as you see fit...

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