Has Been Asked But I Need Advice Before I Blow Up! Please

Decorating By sweetts99 Updated 20 Jul 2011 , 3:16pm by sweetts99

sweetts99 Posted 17 Jul 2011 , 8:56pm
post #1 of 30

This is kind of another question about prices and a venting please forgive me now. I have read alot of the posts about "How much should I charge" and I have been noticing that most comments go with the, depends on several things: Location, ingredients, what your time is worth, what are other in the area charging, ect... I totally get those answers and have worked hard to apply them to my cakes. Here is my problem:
After planning this cake, they decided they didn't like the cost... I was already making decorations, I really tried to work with them and I feel went out of my way, because they are close friends. I feel I took a rather big loss on the cake. What would you have charged?
Two tiers one 8in with 4 layers of cake and 3 BC.
One 6 in with 4 layers of cake and 3BC.
It was a chocolate fudge cake.
I handmade white chocolate MMF and dark chocolate MMF.
All the decorations are handmade. The Mario and Kart are white chocolate MMF mixed with some gumpaste.
I had $55 in supplies and I put 22 hours "labor" into the cake. I like what I do but sometimes when your closest friends argue with you about price and sizes, ...... anyway... I live in a large metropolitan area. I thought the price was good plus I was aready giving a discount because they are good friends... I am so hurt and upset. She asked well how much in supplies do you have and when I told her she was like, do you want to make a 50% profit! How do you figure that? I asked, what about my time? As it turns out I averaged about $2.15 an hour! So please all of you fabulous decorators out there, what would you have charged?

29 replies
psueb Posted 17 Jul 2011 , 9:17pm
post #2 of 30

I would have charged $110 for friends. 175 for regular customers. Your time and work is valuable. If they don't like your prices tell them to go to a cake shop, where they will spend three times as much or more. Or they can go cheap and go to Wal-mart where they will get a horrible cake that tastes like leftovers. Don't under value what you do. It is a service that usually is the highlight of any event. They want a crafted cake that shines, they need to pay for it. Just tell them that Duff's Charmed Cakes start at over a thousand dollars and watch them freak out. And that is the truth. They charge a fortune. We do the same work for a fraction of the cost.

jason_kraft Posted 17 Jul 2011 , 9:19pm
post #3 of 30

For a cake with $55 in supplies and 22 hours labor we would have charged $919.

$55 ingredients + (22 hours * ($15 hourly wage + $15 kitchen rent/hour)) + $20 estimated overhead + 25% profit = $918.75.

If we were able to legally sell cakes made from home (here in CA you are required to have a commercial kitchen) the price would be $507.

BTW the Mario Kart characters are copyrighted by Nintendo, so unless you got prior permission you would need to purchase licensed toppers instead of making your own copies of the characters in order to avoid copyright infringement. This would have the side effect of reducing the labor required to decorate the cake, lowering both your cost and the final price.

sweetts99 Posted 17 Jul 2011 , 9:28pm
post #4 of 30

The attachment link is not working. I tried to post a picture but it just won't go. The cake is in my photos if you would like to see it.

cakewhiz Posted 17 Jul 2011 , 9:39pm
post #5 of 30

I, too, have read many posts on what to charge. Unless the cake I make for a friend is a gift from me, I always charge a friend what I would normally charge a full paying customer. When I tell them the price, they then have the option of ordering the cake from me or going elsewhere. I always make sure my friend/customer knows the price of the cake up front, and I am paid two weeks prior to the event. I have never ever had a problem, I get the price I quoted, and we are both happy.

cakewhiz Posted 17 Jul 2011 , 9:39pm
post #6 of 30

I, too, have read many posts on what to charge. Unless the cake I make for a friend is a gift from me, I always charge a friend what I would normally charge a full paying customer. When I tell them the price, they then have the option of ordering the cake from me or going elsewhere. I always make sure my friend/customer knows the price of the cake up front, and I am paid two weeks prior to the event. I have never ever had a problem, I get the price I quoted, and we are both happy.

QTCakes1 Posted 17 Jul 2011 , 9:43pm
post #7 of 30

Sorry about your friends response. But I wouldn't have told her jack about my supply cost or labor. McDonald's doesn't discuss their whole sale pricing. They just let us know what a Bic Mac cost. And that's why you NEVER start on a cake until you have a non-refundable 50% down deposit. They know the cake cost up front and you don't waist your time and moeny and on a cake that your not going to get paid for any way. I know your upset, but considerate a valuable lesson in doing business...even with a "good" friend.

sweetpea223 Posted 17 Jul 2011 , 9:51pm
post #8 of 30

I don't start anything unless everything is 100% sure that they will get the cake. If I don't hear any response from them, that means it's a no. Whether they are friends or not, I would normally just cut a few dollars off the normal price of what I think is right for the cake.

jason_kraft Posted 17 Jul 2011 , 9:53pm
post #9 of 30
Quote:
Originally Posted by QTCakes1

But I wouldn't have told her jack about my supply cost or labor.



For a custom cake, the amount of labor needed is an integral part of the price quote. Whenever we give customers quotes for anything beyond basic decorations we always mention the approximate number of hours that will be devoted to the cake, since many customers have no idea how much work is involved.

LoveMeSomeCake615 Posted 17 Jul 2011 , 10:02pm
post #10 of 30

Based on $55 materials and 22 hours of labor, we would have charged about $400.

I think it was kind of ridiculous of her to tell you you shouldn't be making so much profit, especially when she has NO idea what she's talking about! People who have never made cakes have no idea what goes into it, and she obviously wasn't taking an hourly wage for you into consideration. Most people don't realize that true profit is over and above cost of materials, wages, and overhead. Next time make sure your customer, friend or not, knows the cost ahead of time and has paid you in full before you turn your ovens on.

The nerve of some people! icon_rolleyes.gif

kakeladi Posted 17 Jul 2011 , 10:41pm
post #11 of 30

............She asked well how much in supplies do you have and when I told her she was like, do you want to make a 50% profit! ...........

Your answer to her is: "NO. There are 'hidden costs' besides ingredients: boards, boxes, use of mixer, clean up fees, fee for being away from my family 22 hrs, (dishwasher) soap & water to clean up; gas for heating oven; electirc so I could be up all night to finish your creation........" and whatever else you can think of that I didn't just nowicon_smile.gif

No you probably wouldn't say that but maybe it will make you think of something you could come up in rebuttle to her.
And as others pointed out.....does she not think places like McD makes a profit?? I understand their (and other resturants) profit on sodas (Coke etc) is something like 75%! Think about that the next time you order a *large* soda for $1.89 or more.

JessiesCreations Posted 17 Jul 2011 , 10:49pm
post #12 of 30

It sounds like you value their friendship more then they value yours..nonetheless you're in a crappy situation. I've taken some advice from a few bakers on here to always give an invoice and show friends/family the amount they would have paid for the cake and how much discount they are getting. I give a 30% discount for extended family/friends and free cakes for immediate family including the in-laws.

Oh and even though I prefer staying positive on FB, this situation would make me flip out a bit. I would probably make a little comment on FB about them in a way that's indirectly calling them out. Like "Just got done working on a beautiful cake but apparently the customer doesn't feel that my time is worthy of $2.15 per hour". Hmmm..that's actually pretty direct but you get your point across.

jason_kraft Posted 17 Jul 2011 , 10:52pm
post #13 of 30
Quote:
Originally Posted by kakeladi

And as others pointed out.....does she not think places like McD makes a profit?? I understand their (and other resturants) profit on sodas (Coke etc) is something like 75%! Think about that the next time you order a *large* soda for $1.89 or more.



The markup for fountain soda is usually in the 2000% range (that's a 95% profit margin, i.e. 9 cents of syrup, water, and packaging for a $1.80 drink), but that is balanced out by much lower (or negative) net margins on higher-value menu items, many of which require much more labor than a beverage. Many restaurants would not be able to stay in business if they did not sell beverages at the current markup. Here is a relevant article:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/05/22/BULP1JIC5F.DTL

Same story with movie theaters...they make very little profit from showing movies (most of the ticket price goes to the studio) so they have to rely on concession sales to stay in business.

Spuddysmom Posted 17 Jul 2011 , 11:06pm
post #14 of 30

[quote="jason_kraft"]For a cake with $55 in supplies and 22 hours labor we would have charged $919.

$55 ingredients + (22 hours * ($15 hourly wage + $15 kitchen rent/hour)) + $20 estimated overhead + 25% profit = $918.75.

If we were able to legally sell cakes made from home (here in CA you are required to have a commercial kitchen) the price would be $507.
quote]

This is really helpful info for those of us setting up under new Cottage Food Laws (WA, FL and TX). Thanks for the insight.

madcobbler Posted 17 Jul 2011 , 11:40pm
post #15 of 30

I charge everbody the same rate. If a friend, coworker, or family member asks me to make them a cake I charge them the same as a stranger off the street. Same amount of work and same cost for ingredients. This is our livelyhood. If I offer to make the cake for an event then it's free. It really doesn't matter what any of us would of charged. You have to charge enough to cover your costs and make enough of a profit that makes it's worth your while. I would simply state to your friend that you would like to make the cake for her and the price is x amount of money. I would never discount a cake because someone asked/guilted/manipulated me to. If you bring up the offer to discount your cake because you are feeling generous then great. It's important from early on in the cake business to draw the line in the sand with people.

QTCakes1 Posted 18 Jul 2011 , 12:06am
post #16 of 30
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by QTCakes1

But I wouldn't have told her jack about my supply cost or labor.


For a custom cake, the amount of labor needed is an integral part of the price quote. Whenever we give customers quotes for anything beyond basic decorations we always mention the approximate number of hours that will be devoted to the cake, since many customers have no idea how much work is involved.




I know labor is a part of the cost. I've been in business many, many years. That is why I have no problem giving a per serving price that covers material and labor cost. I don't tell them "Well you know my butter is xyz per pound and I'll need 20 lbs. Not to mention it takes me xyz to make such and such decorations and I like to make so much an hour making them". WHen I tell them the per person serving, they are knowing what it cost them. They don't need to know what it cost me, so they can know my profit margine. That is no customer's business. And I don't have anyone telling me "Wow! You want to make 50% profit". Not everyone on here is ignorant to the business aspect. And if you break down your cost to your customers, that may be what works for you. But I know next to know one that does that...unless they are a mechanic.

jason_kraft Posted 18 Jul 2011 , 12:11am
post #17 of 30

My point was I consider at least an approximation of the amount of labor for the cake as part of the price quote. It's not written into the quote but when premium decorations are involved we mention that it will take an X hours for the requested decoration before we give a price. Telling the customer how much time is involved does not reveal your cost nor your profit margin, but it does help justify the price.

jessicakes63 Posted 18 Jul 2011 , 12:21am
post #18 of 30

I am a VERY NEWBIE, just took up this cake decorating hobby when I found myself in an empty nest situation....I've always been interested and dabbled but am really into it now.....started just making cakes for friends and began getting calls for orders. One thing I learned QUICKLY is that we dont talk "how much do you charge for a cake" we now talk "how many servings do you need? I charge $______ per serving" I dont know, I guess people think we have all the money and time in the world to donate cakes!

peetz Posted 18 Jul 2011 , 3:13am
post #19 of 30

All these issue are the reasons I do not sell cakes, and most likely never will. It just seems to ruin the art of cake decorating when you have to haggle over price. I just tell my friends my work is priceless therefore the cake is free. icon_surprised.gif)

cakestyles Posted 18 Jul 2011 , 3:30am
post #20 of 30

So did they end up not paying you for the cake?


3 words....Get payment upfront.

Kitagrl Posted 18 Jul 2011 , 3:45am
post #21 of 30

I dunno about the 22 hours labor part...hmmm....I don't think that should come into the equation, necessarily.... someone else could do the same cake in 8 hours, but that doesn't mean they should charge less because they are faster....

Pricing is not only based on what the going rate is in the area, but also your expertise and how professional your work looks. I don't recommend people who are just starting out (OP, I do not know how much experience you have, so I'm not directing this at you) should not be charging as much as those with more experience...you have to give your pricing room to grow as your experience grows.

If it takes you 22 hours to make a medium sized tiered cake, then some of that should be chalked up to continuing to learn how to do cakes, not being paid for all of it.

But yes, do be sure to get at least some sort of sizable deposit before purchasing an ounce of cake supplies for any given cake.

Totally saying all of the above in kindness....

AliBakes6167 Posted 18 Jul 2011 , 4:09am
post #22 of 30

This type of thing sucks especially if it's a friend...........who's being ignorant! I'm going into business soon (part time) selling cupcakes/cakes. My co-workers have been given huge discounts up till now. If they ask - why was it $2 last time and now your charging $3? well i'm going to explain that now it is my job, which I need to get paid for & since I may need to rent a kitchen I need to count in those costs as well ($10/hr plus tax). If you don't know what to quote them upfront, think about it for a while, figure it out & get back to them with a price before you start working on it.

p.s. your cake is awesome, I wouldn't expect it to be any less than $250. If they really wanted a cheap cake, they could get two nasty tasting circle cakes from the grocery store, plop one on top of the other & get some mario cart figures to put on top. That would probably cost her over $50 anyway, and it would taste and look like *%$#!

<3

LoveMeSomeCake615 Posted 18 Jul 2011 , 4:15am
post #23 of 30
Quote:
Originally Posted by AliBakes6167

If they really wanted a cheap cake, they could get two nasty tasting circle cakes from the grocery store, plop one on top of the other & get some mario cart figures to put on top. That would probably cost her over $50 anyway, and it would taste and look like *%$#!




I think I saw Sandra Lee do that! icon_wink.gif

Texas_Rose Posted 18 Jul 2011 , 4:40am
post #24 of 30

If you were doing wedding-size servings, that's 39 servings of cake, so it was about $2.82/serving. That's a decent price...maybe add $25 for the figure on the top.

The supplies for that cake would not have cost me $55, and I thought my supplies were a little on the high side.

Also, Kitagrl has a valid point about the number of hours...as your experience and skills increase, the time needed to do most cakes will decrease.

carmijok Posted 18 Jul 2011 , 4:43am
post #25 of 30

I just saw Robert Irvine on the Food Network doing a Restaurant Impossible show. This one had a daughter running a restaurant with no experience on food costs or what to charge for her food on the menu. He gave a very simple equation which, to my mind seems to work pretty well for cakes. It's cost of ingredients for a dish times 3 to cover labor, and overhead. When you figure it out this way, her cake should have been $165...which doesn't seem too over the top...or too cheap. Just a thought.

Kitagrl Posted 18 Jul 2011 , 2:02pm
post #26 of 30
Quote:
Originally Posted by carmijok

I just saw Robert Irvine on the Food Network doing a Restaurant Impossible show. This one had a daughter running a restaurant with no experience on food costs or what to charge for her food on the menu. He gave a very simple equation which, to my mind seems to work pretty well for cakes. It's cost of ingredients for a dish times 3 to cover labor, and overhead. When you figure it out this way, her cake should have been $165...which doesn't seem too over the top...or too cheap. Just a thought.




I think that's probably a great formula for people starting out or doing semi-basic designs but probably not for weddings or larger cakes, or very professional designs....

Baker_Rose Posted 18 Jul 2011 , 2:52pm
post #27 of 30

The food cost of 33% is a FOOD base, not a bakery base. If you cost a basic cookie out and it ends up that it only costs (in ONLY ingredients) you 5 cents to make, you don't sell it for 15 cents, you sell it for the same 50 cents a piece ($6-dozen) that you sell all your cookies at. Another cookie may cost you 25 cents, so you make more on some, less on some.

Many years ago, before culinary school, I tried to cost each type of cookie I sold instead of one per dozen charge and customers were confused and it made me nuts. So I have all cookies be one cost with a few exceptions.

You have to include your labor. Period. That is the largest cost of most cakes, especially if you are able to cost ingredients in bulk or wholesale. If someone said to me "you want to make 50% profit???!!!!" then I would very simply tell them that I am making 0% profit, the price reflect the fixed costs of the cake plus variable cost of labor. If you want a cheaper cake, order one with a lower cost of labor.

Come on, when they are at their job are they being paid?? Per hour?? Then we should be paid, per hour. It's a very simple concept. I am starting to think that people just want a cheap cake because they are getting it from a 'friend' or a 'family member'.

Tami icon_smile.gif

TexasSugar Posted 18 Jul 2011 , 3:04pm
post #28 of 30
Quote:
Originally Posted by sweetts99


After planning this cake, they decided they didn't like the cost... I was already making decorations, I really tried to work with them and I feel went out of my way,




At this point I would have stopped working the decorations, and would have suggested they look somewhere else.

I don't do friend's discounts, mostly because all of my cakes are for family and friends. But the other side is, if the people in my life that know that time that goes into a cake doesn't want to pay me for my time, why should I waste it doing them a favor?

If someone is already balking at the price of the cake, they aren't going to magically get over it.

For me, copyright issue aside, I wouldn't have charged less than $144 for a 6in and 8in fondant covered cake.That is 36 servings at $4 a serving.

LoveMeSomeCake615 Posted 18 Jul 2011 , 3:08pm
post #29 of 30
Quote:
Originally Posted by TexasSugar

But the other side is, if the people in my life that know that time that goes into a cake doesn't want to pay me for my time, why should I waste it doing them a favor?




YES. thumbs_up.gif

sweetts99 Posted 20 Jul 2011 , 3:16pm
post #30 of 30

Thank you everyone! I have been reading all of your posts and really trying to be objective and not stuborn. I never even thought about the copy right problem so that is something I am going to have to be more careful about. Thank you for reminding me.
I have been doing cakes for about 11 years now but have always worked in BC until the last 2 years, so yeah I am still learning, and sculpting is new for me also. I kind of figured alot of you out there could have done this one alot faster than me lol. I obssess over EVERY detail so much that it seems to take me alot longer I think. When I am more comfortable I should get faster.
I did ask them for their budget and was told there was not one. I was told to charge them just like anyone else. My problem is that this friend is the one who is always telling me "You need to charge more, you are not charging enough for your work". I guess in the long run, this cake has cost me more than the loss of money, it has cost me a friendship, and that is just not worth the price of flour and sugar.
I will take all of your advice and try my best to apply it to my work. Thank you!

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