Shocked At Prices.. For Small Cakes

Decorating By labmom Updated 17 Jul 2011 , 2:54pm by jason_kraft

labmom Posted 14 Jul 2011 , 7:01am
post #1 of 57

I have been reading questions and posts on cakes that people have done and the prices. I saw one yesterday a 6" & 10 in cake for 100.00

I almost coulcn't believe it. Prices here in ohio are low,my prices are about the sam as walmart and I am afraid to ask more because of loosing business. I am lucky that all my business is from word of mouth and someone trying my cakes at events. But when it comes for giveing a prices I am scared to put a figure out there ... that is high.

I just did 2 ganach cakes that were a 10 and 9 inches.. nothing fancy at all, they wanted them just for family deserts. I charged them 45.00 for both.
My husband thinks I should have charged about 40 each.. My neice charges 100.00 for a 2 layer 1/2 sheet cake... nothing special about it.. I didn't have the courage to tell her I would have only charged 65.00

Maybe I should have her work for me, and price things.. she isn't scared to tell people a high price.

I hve custers that come about an hour away for my cakes. and have sent me much business. and they have always paid me more than what I have told the for the price of the cake.

I think I am going to take some time off during August when I took the whole month off and re work my business plan.. and see how the price hikes go.. and compare other places in the area. How do you feel about setting prices. I can see the wedding cake prices.. but just desert cakes.. ??

56 replies
KoryAK Posted 14 Jul 2011 , 7:23am
post #2 of 57

For me a tiered cake is a tiered cake, I don't care what event it is going to. I have a base price ($7.75 per serving) and it goes up from there for additional work (some simple things are included at that price). One round cake is a "party" cake for me and yes, is less per serving ($3.5-5 ish). Every area is different and every bakers skill level is different (I haven't looked at your photos so I'm speaking blind here) so you will have to price accordingly. I am assuming that if you're getting $1.80 ish per serving then your ingredient costs must be pretty low as well. If not, raise those prices, girl!

ame120103 Posted 14 Jul 2011 , 8:06am
post #3 of 57

I'm just starting out and am really uncomfortable with pricing also especially since most of my cakes are for friends but I saw that 6 and 10 for $100 and was shocked too. I have not done any wedding cakes but the 3 tier party cakes I've done I have done for $65-$70 and they are 6,8 & 10. I don't have kitchen rentals or anything so my cost do stay low. I take a few extra hours since I'm still learning and wouldn't dream of charging for those few lol.

scp1127 Posted 14 Jul 2011 , 9:28am
post #4 of 57

labmom, take a real hard look at your area and see if there may be a small market for specialty cakes. Keep you lower priced cakes and test the market by launching a few small, pricey cakes. Do the analysis by seeing how many luxury cars, big homes, lawn services, golf courses, private schools, pool services, etc., you get the picture. You may find that there is a small market. And you will probably find that there is no competition for this market. This is the market that I cater to in my bakery. My cakes are three times the prices if some of my competitors. Even though I already have the highest prices for my area, I am launching a line of 6 and 8 inch cakes that will be a premium line. If you find there may be a market, pm me and I'll share what I am doing.

indydebi Posted 14 Jul 2011 , 12:21pm
post #5 of 57
Quote:
Originally Posted by labmom

I have been reading questions and posts on cakes that people have done and the prices. I saw one yesterday a 6" & 10 in cake for 100.00

I just did 2 ganach cakes that were a 10 and 9 inches.. nothing fancy at all, they wanted them just for family deserts. I charged them 45.00 for both.

My neice charges 100.00 for a 2 layer 1/2 sheet cake... nothing special about it.. I didn't have the courage to tell her I would have only charged 65.00



Assuming all cakes in discussion are double layer, 4" tall ....

6/10" cakes serve 50, so the ones you saw were $2/serving.

9/10" cakes serve 70, so at $45 total, that's less than 65 cents per serving.

A 2-layer 1/2 sheet serves about 100 so niece is getting about $1/serving. You would have sold it for 65 cents a serving.

icon_confused.gificon_confused.gif

klutzy_baker Posted 14 Jul 2011 , 12:25pm
post #6 of 57
Quote:
Originally Posted by labmom



I just did 2 ganach cakes that were a 10 and 9 inches.. nothing fancy at all, they wanted them just for family deserts. I charged them 45.00 for both.
My husband thinks I should have charged about 40 each..




I don't charge for my cakes and don't usually get money for them, but I just made a cake for a party and was curious how much the ingredients cost...

The cake was a southern style devil's food 9'' 4 layer (two 2'' layers torted) with chocolate ganache and raspberry preserves in between the layers, with raspberry SMBC.

I calculated the thing cost ~$18 for just the amnt of ingredients that went into the cake. So if you are charging $45 for 2 ganache cakes, IMO you are undercharging...unless your ingredients are pretty inexpensive. But from my experience, chocolate and cream are pricey.

If you are in NE Ohio and it's that inexpensive, tell me where you shop (if you don't mind), b/c it would be worth the drive. (I'm in NW PA)

scp1127 Posted 14 Jul 2011 , 12:34pm
post #7 of 57

klutzy, that's my issue. My ingredient cost is higher than some competitors' retail price. $18 is close to my cost, some as high as $25, and tiramisu comes in at $35. Add to that the fact that I have spent years perfecting my recipes, the expensive pans, etc. There are people out the who eat well and that goes for dessert too. If you are wanting to offer a premium product, I hope it works for you in your area. The larger cities already have fine cakes available and it's a trend the people in smaller areas with higher incomes may already know about. You just need to let them know where to find you.

luddroth Posted 14 Jul 2011 , 12:53pm
post #8 of 57

Go to a decent family restaurant in your area and look at the dessert menu. You will not find any dessert, even a dish of plain ice cream, for the per serving price you are charging. Why should a specialty cake, with excellent ingredients, sell for less per person than a dish of ice cream?

klutzy_baker Posted 14 Jul 2011 , 12:55pm
post #9 of 57

scp1127--

I am in an interesting area. There are several colleges and Universities within a 20 mile radius of my town (my town also has a University). And judging from how my former professors eat, they like to eat well and are willing to splurge. The rest of the residents have far lower incomes..so there is quite a difference.

We do have a few fine dining establishments in the small city north of my town, but from what I can tell, the individuals who sell cakes are hard to find. I think they work on word of mouth alone and work out of their home. I'm sure they exist, but not too sure where icon_razz.gif
It's pretty hard to pin them down to actually see their work.

But as far as selling work, it is pretty daunting. LOL!! Maybe if my boyfriend would manage, but otherwise, I'm not too sure.

scp1127 Posted 14 Jul 2011 , 1:18pm
post #10 of 57

Klutzy, you already have an established business, so you have nothing to lose if you start selling a few select premium cakes and test the market. You just have to find a way to reach that market. I would sample to banks, insurance agencies, etc., in that area. These are places where there are higher incomes and they like to tell others about something new and special. In a small area, it doesn't take much to get the word out.

caymancake Posted 14 Jul 2011 , 2:08pm
post #11 of 57

Don't be afraid to charge what your work is worth! I live in a small community and was afraid to charge more for both my dessert cakes and custom cakes...then I started chatting with some of the other cakers on island and I realized how much I had been shortchanging myself!

One caker decorates the most gorgeous cakes but she bakes straight from the box (nothing wrong with that!) with the exception of a wasc all of my cakes are scratch and have fillings. She bakes single layer 3 inch tall cakes no filling etc.

I quoted a customer $80 for a two tier birthday cake with bc icing and fondant accents but decided I didn't want to take the order because the customer was griping about the price and i didnt want to deal with the drama and passed her on to the other caker. That caker charged her $160 for the same thing!

Guess what? The customer paid it! Kudos to my caker friend because her stuff is worth every penny IMHO and I felt like kicking myself in the butt for being too chicken to charge what I should be charging.

I have since stopped giving discounts and adjust my prices accordingly!

Moral of the story? Don't shortchange yourself!

caymancake Posted 14 Jul 2011 , 2:10pm
post #12 of 57

Btw, it takes time to go and purchase the ingredients, bake the cake, decorate it/ice it, purchase packaging to put it in and you have to clean up the mess afterwards...the time you're standing on your feet in the kitchen away from your family and friends should be worth something!

TexasSugar Posted 14 Jul 2011 , 2:39pm
post #13 of 57
Quote:
Originally Posted by labmom


I think I am going to take some time off during August when I took the whole month off and re work my business plan.. and see how the price hikes go.. and compare other places in the area. How do you feel about setting prices. I can see the wedding cake prices.. but just desert cakes.. ??




I hope when you are doing this, you take some time to price how out much it actually costs you to do a cake. I can't imagine how you covered all the supplies for a 2 tiered ganache covered cake plus your labor cost for $75.

Walmart is not your completion. What you offer and what they offer are different. Your overhead and their overhead is very different. What it costs you to make a cake and what it costs them to make a cake is very different.

While it is nice to see what other people in the area are charging you have to make sure you are comparing apples to apples and not apples to oranges. Your prices need to cover your costs, labor and profit. It doesn't do you any good if you are charging Walmart prices and losing money on the cake.

As far as the dessert cake question...

If the dessert cakes are more specialty cakes that have ingredients that would cost way more than say a basic white cake with buttercream would, then I wouldn't charge any less for them even if they aren't decorated, because they do cost more to make.

bakerliz Posted 14 Jul 2011 , 2:49pm
post #14 of 57

Don't forget to think about the gas you used to get all the ingredients, the electricity from running your oven/dishwasher/water heater/lights and that doesn't even include your time.

I understand your dilemma, I have a hard time quoting higher prices too...My husband on the other hand, seems to value my time and effort much more than I do sometimes icon_biggrin.gif He always breaks it down to determine the profit that I make off a cake and then how much time I spent on it (shopping, baking, dish washing, making fondant, decorating, dish washing again). The next thing he says is "Would you take a job that only paid you $6 an hour?" The answer is always no, and then I adjust my prices. icon_smile.gif

And BTW, your cakes are great! You definitely deserve more!

kathie-d Posted 14 Jul 2011 , 3:24pm
post #15 of 57

Different areas definitely have different markets but $100 for a 6" and 10" is under priced in my books. My base price for that sized cake would be $196 for basic decoration.

I am delivering a 2 tier 4"and 6" this morning. Total cost with delivery (I charge $20 for anything under $200) $120. Do some people baulk at my prices? Sure they do. But I am not working my butt off and spending time away from my family for nothing. My time is worth something and I am finally starting to realize that AND be comfortable in my pricing.

I had a couple contact me the other day wanting a shower cake, an 8" round with a fondant teddy bear on top decorated etc. My quote $125. They said they were not prepared to spend THAT kind of money on a shower cake. My response " No worries, I understand my custom cakes don't fit into everyone's budget. Thanks for getting back to me!" While I really think "go to Walmart!"

Jess155 Posted 14 Jul 2011 , 3:32pm
post #16 of 57

On an international forum, prices are obviously going to vary widely. If you have the same skill and overhead as WalMart, yes, you should price similarly. If your skills and ingredients are higher quality than WalMart, then of course you should charge more. Your skills and time are worth something.

BTW yes, I have seen cakes on here that people think they should charge $xxx for and I wouldn't let it out the door -- haven't looked at your cakes, so I'm not talking about yours.

AnotherCaker Posted 14 Jul 2011 , 3:34pm
post #17 of 57

I start my two tiers at $150 to $175, period, no less than that I don't care what is on them. And I mean a 4/6 two tier. So do the math on the per serving for that. They usually are a bit involved with decos, but honestly, when you add up the time involved, the English drum it sits on, the ingredients....$150.00 for two days (maybe more if there are pieces that needed to dry, gp flowers, fancy monograms, etc.) of work is pretty much not that much money in the grand scheme of things.

I get that the customer can see it quite differently, but I have plenty of them that are just fine with it. That's all I care about.

AnotherCaker Posted 14 Jul 2011 , 3:36pm
post #18 of 57
Quote:
Originally Posted by Jess155


BTW yes, I have seen cakes on here that people think they should charge $xxx for and I wouldn't let it out the door -- haven't looked at your cakes, so I'm not talking about yours.




That's a BIG part of it for sure, and difficult to discuss in a place like this I'm afraid. icon_sad.gif

TexasSugar Posted 14 Jul 2011 , 3:43pm
post #19 of 57
Quote:
Originally Posted by Jess155

On an international forum, prices are obviously going to vary widely. If you have the same skill and overhead as WalMart, yes, you should price similarly. If your skills and ingredients are higher quality than WalMart, then of course you should charge more. Your skills and time are worth something.




I'm not sure how anyone could have the same overhead as Walmart.

A lot of grocery stores have frozen cakes shipped in, premade/precolored icng shipped in, and they limit the time that the employee can spend on a cake to 30-60 mins.

katj012 Posted 14 Jul 2011 , 7:25pm
post #20 of 57

I'm also a baker starting out, and one of the best decisions I made (although it was a bit o' money) was to download CakeBoss software. I think someone else on here created some sort of spreadsheet in Excel that's similar, but both have the same general idea - you put in your recipes, you go in and put all the costs of ingredients (the lists are HUGE) and then it calculates the cost per recipe for you to make the cake. You can include overhead, your hourly work, taxes, etc... it has helped me SO MUCH in my pricing.

pennywells Posted 14 Jul 2011 , 7:42pm
post #21 of 57

We are located in Ohio and we have no problem charging higher amounts. If people want them they will pay for it. Plus it has to be worth your while to make it. I was charging lower amounts when I first started out of the house and after I calculated how much I was actually making, it was only about 2.00 an hour. Not worth the time or effort or mess.

We are not in a big city either and our area was hit very hard by the economy. If they don't want it because it is to expensive then your out maybe a couple of dollars profit and just lot 6-12 hours of your time.

cakestyles Posted 14 Jul 2011 , 7:57pm
post #22 of 57
Quote:
Originally Posted by labmom

I have been reading questions and posts on cakes that people have done and the prices. I saw one yesterday a 6" & 10 in cake for 100.00

I almost coulcn't believe it. Prices here in ohio are low,my prices are about the sam as walmart and I am afraid to ask more because of loosing business. I am lucky that all my business is from word of mouth and someone trying my cakes at events. But when it comes for giveing a prices I am scared to put a figure out there ... that is high.

I just did 2 ganach cakes that were a 10 and 9 inches.. nothing fancy at all, they wanted them just for family deserts. I charged them 45.00 for both.
My husband thinks I should have charged about 40 each.. My neice charges 100.00 for a 2 layer 1/2 sheet cake... nothing special about it.. I didn't have the courage to tell her I would have only charged 65.00

Maybe I should have her work for me, and price things.. she isn't scared to tell people a high price.

I hve custers that come about an hour away for my cakes. and have sent me much business. and they have always paid me more than what I have told the for the price of the cake.

I think I am going to take some time off during August when I took the whole month off and re work my business plan.. and see how the price hikes go.. and compare other places in the area. How do you feel about setting prices. I can see the wedding cake prices.. but just desert cakes.. ??




I haven't read anyone's responses yet, I HAD to answer this post immediately.

I'd like you to sit down and figure out how much your ingredients and supplies cost you to make these 2 cakes.

Every single ingredient you used, including the cake board, box etc.

Than, figure out how long it took you to mix, bake, level, fill, ice, decorate, clean up your kitchen (oh and how long it took you to make your ganache and fillings). Probably at least 3 to 4 hrs right?

Now figure out how much you made on these 2 cakes after your cost of ingredients and I'm not even including the cost of electricity you used to bake these cakes, and the water you used to clean up after you made these cakes.

Tell us how much you actually made for profit on these 2 cakes.

I bet you actually used some of your family's food budget to make these cakes and didn't make more than $5 to $7 total.

Is that worth it to you? Maybe it is, I don't know, but I think you're actually paying people to take your cakes and you don't even realize it.

This is an honest, not trying to hassle you, question. Is it worth it?

FromScratchSF Posted 14 Jul 2011 , 8:05pm
post #23 of 57

The advice to learn the income of your market is very good advice, but you also need to take it one step further - you need to ask yourself if the style of your decorating appeals to those in the higher income brackets and if your brand is appealing to them. This is general advice/opinion, I don't have the faintest clue of your area so I think to keep this easy I'm going to share the BEST blog in the world.

http://www.thinksplendid.com/

Read the whole thing. Every post. Everything she says makes so much sense I am in process of getting branded and having my website redone to clean up my online image so I can appeal to weddings in the $50,000 range, which is where I want to be (and is dooable in my area). I am also refining my decorating.

Good luck!
Jen

BlakesCakes Posted 14 Jul 2011 , 8:24pm
post #24 of 57

On my phone,so short, I am in oh as well. I do not se myself as competing w/walmart. I compete w/ other "cake artists"---better ingredients, more artistic, more personal, more labor. So, I charge a lot more. If people want dessert, they go elsewhere. If they want
a show cake that tastes good, they come to me and don't argue cost. Rae

AnotherCaker Posted 14 Jul 2011 , 8:28pm
post #25 of 57
Quote:
Originally Posted by labmom

I saw one yesterday a 6" & 10 in cake for 100.00



I just noticed the size you are referencing. Wow! A 6 and a 10 is not a small cake, sorry. That's dessert for 45 people. Forty-five.

TexasSugar Posted 14 Jul 2011 , 8:31pm
post #26 of 57
Quote:
Originally Posted by cakestyles



Tell us how much you actually made for profit on these 2 cakes.

I bet you actually used some of your family's food budget to make these cakes and didn't make more than $5 to $7 total.

Is that worth it to you? Maybe it is, I don't know, but I think you're actually paying people to take your cakes and you don't even realize it.

This is an honest, not trying to hassle you, question. Is it worth it?




At $45 for a 9 and 10 in ganached covered cake, I'm not sure she even made enough to cover supplies at all. I know I have spent well over $20 on chocolate to make ganache for a cake.

Wikipedia says min wage in Ohio is 7.40 and hour. So if she only worked for 4 hours (which I bet it was longer than that) that's already $29.60 worth of labor.

That only leaves $15.40 to go towards cost of supplies and ingredients. Everything else would have been out of her pocket.

I'm with cakestyles, while I enjoy making cakes, and do think people should have the opportunity to have nice cakes, I do not think anyone should be taking money away from their family to supply other people a cake when they ask you to make it. Offering is one thing, but when someone asks you to make a cake, something they would have to pay someone else to do, you should get a fair value for not only your product, but also the time it takes you. That is time away from your life, your family and so on.

cakestyles Posted 14 Jul 2011 , 8:43pm
post #27 of 57

Exactly!

It's so hard for others to value our work if we place so little value on it ourselves.

BizCoCos Posted 14 Jul 2011 , 8:55pm
post #28 of 57

dear Labmom (or the original poster, sorry), I do feel for you. while I feel that some prices are ridiculous and some of the cakes are mediocre (all over the web), I have fallen victim to the following: they will not buy at such a price, guess what, yes they are buying-just not from you, look at your neice, lucky her) good luck to you, but please if you value your time and skill charge at least the minimum wage for your state and then add an amount you fill comfortable with.

I spent 3 weeks on flowers and 2 days on a cake, it was a gift, so the ckae should have cost no less than 3, 000. Would someone have bought it from me, no way, but they would have happi;ly paid an established baker without bling, happy caking.

By the way, Walmart is able to charge low prices on all their products due to lack of insurance and benefits to associates, recently they are having monetary problems, but they have consistently made a huge profit in this horrible recession, nope, don't work for them or any other family member or friend. they have been in the news a lot recently.

creativethoughts Posted 14 Jul 2011 , 9:08pm
post #29 of 57

I cant say much more than what everyone else has said except:

Quote:
Originally Posted by labmom

I have been reading questions and posts on cakes that people have done and the prices. I saw one yesterday a 6" & 10 in cake for 100.00

I almost coulcn't believe it. Prices here in ohio are low,my prices are about the sam as walmart and I am afraid to ask more because of loosing business.




Really?... REALLY?!???!?!? icon_confused.gif

Have you tried a Wall-mart cake? First thing you need to do is make up a batch of cupcakes. just make something simple like a vanilla or chocolate, dont forget to make some buttercream to go on top. Then you need to go and buy a small package of Wall-mart cupcakes (you should be able to find a package of 6). Then you need to sit down and try them both! If your baking doesn't taste 100x's better then I don't know what to tell you!

I'm sure that you've gotten this from every one else by now but you need to value your self, your baking, decorating and your time more! when people come to you for a cake they are not just coming to get a cake that they can get from Wall-mart, they are coming to get a cake that they can only get from you! Not only that but they are coming to you for a design that they can only get from YOU!

I'm not sure how you or others might feel but I'm not the kind of person to care about the price. You say that you have prices like wall-mart but your cakes must taste good because...

Quote:
Originally Posted by labmom

I hve custers that come about an hour away for my cakes. and have sent me much business.




There is no way that I am going to drive for an hour just to get a cake that I could get at Wall-mart! Sure the price is low, but if I'm driving an Hour to get to you and and Hour to get back I'm not caring that much about the price as I am thinking of how good your cake is!

Two more things. I kind-of already said this but I will say it again: If you under price your self then your not taking yourself seriously. And if you don't take your self seriously then your customers might not be taking you seriously either. On the bright side you did say:

Quote:
Originally Posted by labmom

and they have always paid me more than what I have told the for the price of the cake.




Your customers know how to value your work and want to pay you what they are worth. To me it sounds like you shouldn't have any problem raising your prices because most of them are already paying that price even if you don't ask for it.

I hope that when you evaluate your prices you will take this and what others have said into consideration. Fact: if you undercharge and over work yourself then you WILL burn out. And it would be sad for you to burn out on something that you love to do!

ChilliPepper Posted 14 Jul 2011 , 9:10pm
post #30 of 57

$100 for a six and a ten is way too cheap!!! I charge a minimum of £75 for this sized cake, with simple decoration, which is about $150 or a little less I think. You need to raise your prices and be paid according to the level of your work.

CP x

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