Another Pricing Question

Business By Totally-Frosted Updated 30 Aug 2011 , 2:56pm by jason_kraft

Totally-Frosted Posted 29 Aug 2011 , 10:12pm
post #1 of 3

Hi All, I know we get a lot of questions about pricing but I'm a little confused. I know that when pricing you include labor, overhead, ingredients, etc. I know all of that. However, I have a little confusion as to exactly how do those that price their cakes per serving actually price their cakes???

1. Do you charge a per serving price PLUS add on for labor, ingredients, etc?
2. What does the per serving price include (boxes, ingredients, overhead, etc.)?
3. Does your per serving price include anything at all?

For example, if I have my basic buttercream/design cakes being charged at $2.50/svg and I have a cake for 60 people. Would my example look something like this...

2.50/svg x 60ppl = 150.00 base price
PLUS labor $11.50/hr x 5 hours = $57.50
PLUS overhead and ingredients = $60.00

Total cost for cake = $267.50

or would the total cost of the cake be the per serving charge because it already includes ingredients, etc?

I hope I explained my question clearly. I'm trying to figure out is it best to charge just a per serving charge PLUS labor OR just figure out labor and ingredients plus any extras like figures and let that be the total charge? Thanks in advance for your help.

2 replies
TexasSugar Posted 30 Aug 2011 , 2:28pm
post #2 of 3

Your costs, labor, overhead and profit become your price per serving.

Using your numbers...

PLUS labor $11.50/hr x 5 hours = $57.50
PLUS overhead and ingredients = $60.00

You need to charge a bases of $117.50 to cover cost of making a cake for 60 people. You'd actually want to add in extra for profit. So lets just round up to say that your cost for that cake would be $150, when you factor in profit of $32.50.

So you would take your $150 that it would cost you to make the cake, then divide that by the number of servings. So you'd have a price per serving of $2.50. You have to charge at least 2.50 a serving to cover the cost of making the cake, your labor and profit.

Your costs for things like boxes, dowels, boards, plates... should be factored into the cost of the cake. Ingredients covers the items you use to make the actual cake and icing, but you need to charge for the things that you have to use to put the cake together. That should all be factored into the price per serving.

Extras add on top of the price per serving would be delivery and set up fees if you have them.

jason_kraft Posted 30 Aug 2011 , 2:56pm
post #3 of 3

You'll also want to add an extra charge over and above the per-serving price if there are complicated decorations that don't necessarily scale with the size of the cake. For example, if a customer requests a custom cake topper that takes 6 hours to make (with $10 of ingredients and a $15/hour wage), that cake topper will cost you $100 (with a price of $120-130) whether the cake has 20 servings or 200.

For things like decorations on the side of the tiers, incorporating that cost into the per-serving price would be more appropriate, since a larger cake = more decorations = more labor.

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