Question About Different Type Of Cakes And Tortes....

Decorating By Vellvet Updated 30 Oct 2011 , 3:47am by lorieleann

Vellvet Posted 29 Oct 2011 , 4:19pm
post #1 of 8

Hello everyone! I found this forum a couple of days ago and already found a lot of very useful info.

Baking cakes is my hobby and is slowly becoming my passion. My friends have convinced me to start selling my cakes. I want to give it a try just amongst friends and their friends, etc. and if anything comes of it, I will start an official business.

It seems that most poeple on this forum make traditional american birthday, wedding, etc. cakes which are somewhat different than what I specialize in.

I wanted to get input from the forum about pricing. I read other posts where it has been suggested to calculate the costs of ingredients, time spent, other costs, etc. The problem that I am running into with this approach is that my cakes do not take long and are not too expensive to make. But does that mean they should be sold for cheap? To me (and anyone who has tried them) they are worth a million bucksicon_wink.gif

Here is an example of one of my cakes. I call this one the Dacquise Torte with Walnuts and Dates. It's 2 layers of merengue with a dolce de leche cream center. It's 10" in diameter and can be cut into approximately 10 portions.

[img]https://lh6.googleusercontent.com/-2Xl3lw42THc/Tqi3BrZvApI/AAAAAAAAACw/J1O3SxDksds/s720/IMG_3019.JPG[/img]

If image does not show up, try this:

https://lh6.googleusercontent.com/-2Xl3lw42THc/Tqi3BrZvApI/AAAAAAAAACw/J1O3SxDksds/s720/IMG_3019.JPG



How much can I charge for a cake like this. I was thinking $45. Is that reasaonable?

7 replies
jason_kraft Posted 29 Oct 2011 , 4:27pm
post #2 of 8

The general advice to price based on ingredients, labor, overhead, and profit margin is a guideline, the profit margin component can adjust as high as the market will bear.

What is your cost for that 10" cake, including the per-order overhead cost (liability insurance, advertising, license fees, inspection fees if your state requires a commercial kitchen, etc.)?

Vellvet Posted 29 Oct 2011 , 4:32pm
post #3 of 8

Since I do not have a registered business, the costs that you listed are close to zero for me.

My concern is that I can't charge too little right now, even when selling to friends. If I do end up making a legitimate business out of this, I don't want to have to raise the price and dissapoint my regular customers.

jason_kraft Posted 29 Oct 2011 , 4:34pm
post #4 of 8

Until you put together a business plan and find out what all the costs involved in an officially licensed business will be in your state, it will be impossible to price your products accurately. In the meantime I recommend not charging at all.

Vellvet Posted 29 Oct 2011 , 4:45pm
post #5 of 8

Thanks for your input.

If anyone has any suggestion on what a reasonable price for one of my cakes would be, I would appreciate iticon_smile.gif

MimiFix Posted 29 Oct 2011 , 5:53pm
post #6 of 8
Quote:
Originally Posted by Vellvet

Thanks for your input.

If anyone has any suggestion on what a reasonable price for one of my cakes would be, I would appreciate iticon_smile.gif




Greetings Vellvet, welcome to CC!

Are you asking people to come up with a number to get you started, so you can bypass figuring out your true cost? At the very least, take each product and break down the ingredient cost so you know what each item costs you to make. Then add overhead and time. There's no point in paying people to be your customers.

If you are thinking about starting a business to make money, Jason Kraft is our #1 resource for the cold facts. (Not to slight anyone else, but Jason seems to be the most vocal, so to speak...) I know his advice can be scary if you're not a business-oriented person, but he gives excellent advice and doesn't charge much!!

Bridgette1129 Posted 29 Oct 2011 , 7:18pm
post #7 of 8
Quote:
Originally Posted by MimiFix


If you are thinking about starting a business to make money, Jason Kraft is our #1 resource for the cold facts. (Not to slight anyone else, but Jason seems to be the most vocal, so to speak...) I know his advice can be scary if you're not a business-oriented person, but he gives excellent advice and doesn't charge much!!




thumbs_up.gif

lorieleann Posted 30 Oct 2011 , 3:47am
post #8 of 8

the standby formula for figuring cost here is pretty reliable. Not knowing what your cost of ingredients is, or where you are located (city/rural, and country?) makes it pretty difficult to accurately say, "yeah, i'd charge $45 for that. Go for it!"

If you don't want to base your price on costs and labor, then comparison shop like products in your area to see what the market is able to accept. It shouldn't be hard to scope out pastry bakeries and see where they are pricing fancy dessert cakes, and then i'd say go a bit lower because you are working under the table for friends and family. Since a cake without decoration and personalization is often served for dessert and not as the centerpiece of a party as a birthday cake or shower cake, you also want to keep in mind that folks may be just as inclined to go with a Costco dessert cake instead (many of which are very tasty and a good value for the money--not talking their sheet cakes!). Not saying that there isn't a market for speciality dessert cakes and that they aren't wonderful, just that you have a bit of a harder sell with a price that is 3X the amount of a competitor.

And for the most part, if you are selling to family and friends then run the $45 by them. If they order cakes, then you know that that is what your immediate market will bear.

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