Raising Your Prices

Business By Dreme Updated 21 Jul 2011 , 2:47pm by cakecoachonline

Dreme Posted 17 Jul 2011 , 4:11am
post #1 of 8

Just been thinking and have a few questions about raising prices:

1. When you raised your prices what was the determining factor to how much your price was raise? Cost of goods, phasing out a certain product, clientele?

2. For those who have done it, how did people react? Good?Bad? What happens to your long standing clients? Did they stick with you or leave? Do the clients that can afford your new price act or seem any different than those before? Are they more demanding? Easier to deal with?

3. Did anyone switch their pricing method over? For example: from by the cake to per slice.

4. As far as presenting it to the client did you just put down a minimum order price or did you change the price per item on the menu.

5. How did you determine you minimum price?

6. How does your minimum price affect smaller serving products? Is the item just your minimum price then?

7 replies
Dreme Posted 19 Jul 2011 , 8:20pm
post #2 of 8

No one ever raised their prices?

KoryAK Posted 20 Jul 2011 , 12:14am
post #3 of 8

I think you just overwhelmed them with a laundry list of questions.

I recently raised mine. I have a retail shop, so I posted a notice in the shop, my website, and one facebook that they would be going up and when (about 10 days notice). That way I didn't feel any guilt if someone didn't get their order in before the cutoff. I raised cookie and coffee type items $.25-.50 each and my base price per serving went up about $.50. No one said jack, everyone is having to raise prices in this economy. Minimum wage goes up, milk goes up, gas goes up.... cake goes up. I probably could have raised them more.


A couple of times over the years I have done a large price jump and while there were customers that stopped coming, those were the small potatoes customers that I WANTED to stop coming. Higher price = either same work more money or less work same money.

crushed Posted 20 Jul 2011 , 12:39am
post #4 of 8

I am contemplating price adjustments as well. The cost of all raw materials has gone up and my profit margin is already pretty small.

I have one question though. Now I know that anyone under contract will receive the previously agreed upon price, but what happens when you say that prices go up on July 31 and you have a dates on your calendar for clients that aren't under contract? I don't sign contracts for anything other than Wedding clients and at this time, I am pay on delivery/pickup.

aligotmatt Posted 20 Jul 2011 , 12:45am
post #5 of 8

1. Cost of goods increase + giving myself a raise. I keep a close watch on price for the customer, to product cost, to time invested, to overhead costs... Sometimes the product cost goes up (like butter has gone from $1.28 a pound when I opened to $2.50 a pound now), overhead goes up (advertising, electricity.........) and sometimes I work my tail off and realize I deserve more money for the product I put out.

2. I don't really have long standing clients, some repeat stuff with brides sometimes, but mostly it's just a one time kind of relationship. So, I post in facebook, put it on my website, give a little warning. I have on my website all the time, due to the fluctuating cost of ingredients, prices may change, the only way to guarantee this pricing is to book your cake with a deposit.

3. I guess I don't get the price per serving vs. price per cake. When people say that to me, do you charge by the serving or by the cake, I say, I don't really understand what you want me to tell you. I can tell you I charge $5 per serving and a 6" round serves 12, or I can tell you a 6" round costs $60. I ask the number of servings so we can design a cake that is the right size for your event.

4. Presenting a price change? I would say change it all? I don't really know what you're presenting...

5. I determined my minimum price by what it's worth me working for. I have a home kitchen, 2 kids, live at the beach... and frankly, if I'm only going to make $100, I'd rather have the week off. Probably if I had a bakery and bakery rent and staff, I would have a lower minimum. But then I'd probably sell cookies and muffins and brownies, so it would need to be a lot lower than $250.00 icon_smile.gif

6. For smaller serving things, it does turn some people off. And sometimes I waive the minimum fee if I'm already working that week. And sometimes I just say, best wishes...

Quote:
Originally Posted by Dreme

Just been thinking and have a few questions about raising prices:

1. When you raised your prices what was the determining factor to how much your price was raise? Cost of goods, phasing out a certain product, clientele?

2. For those who have done it, how did people react? Good?Bad? What happens to your long standing clients? Did they stick with you or leave? Do the clients that can afford your new price act or seem any different than those before? Are they more demanding? Easier to deal with?

3. Did anyone switch their pricing method over? For example: from by the cake to per slice.

4. As far as presenting it to the client did you just put down a minimum order price or did you change the price per item on the menu.

5. How did you determine you minimum price?

6. How does your minimum price affect smaller serving products? Is the item just your minimum price then?


KoryAK Posted 21 Jul 2011 , 6:36am
post #6 of 8

Crushed: If I have an order on the books (as in at least partially paid for and on my baking schedule) then I don't care if I have a written contract for it or not (like you, I only do those for weddings) the price stays the same even if they make changes. If there is someone that I have only discussed cake with but they have not officially ordered it, then the price increase applies to them. For all pending wedding orders I send out an email saying if you book before the change date you get the old price, after is new price. What they do with that is up to them. Any pending non-wedding orders coming up I may or may not give a courtesy call to (usually don't have the email addys).

jason_kraft Posted 21 Jul 2011 , 7:37am
post #7 of 8

We've increased our prices an average of 5-10% each year, usually as a result of increased rent at our commercial kitchen. We have flat prices for different sizes of single-tier cakes, and a per-serving price for multi-tier cakes.

Our customers rarely notice, and when they ask about it we tell them the truth -- our rent has gone up so we have to increase our prices to match.

cakecoachonline Posted 21 Jul 2011 , 2:47pm
post #8 of 8

I had a scary conversation the other day with someone who wanted to make more cupcakes and build her business. So I asked her - how much are you charging for each cupcake - and the answer came back 'Oh I think it will be about £1 (we are in UK) - about............. Now clearly she had not made a list of ingredients, and considered what she pulled from her store cupboard, shopping time, parking fees etc. etc. It was an approximate guess - without a thought of her time involved. Whilst this is fine for the occasional batch of cakes - (but is it???) for someone who is serious about building a strong business, knowledge is power. Knowing the actual cost of the goods plus time to decorate is first. At that point - prices must be reviewed on a regular basis with the knowledge of the actual costs.

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