Artsygurl Posted 6 Jan 2012 , 1:21am
post #1 of

Hi all!

So I've been going back and forth with the idea of a cupcake (or other dessert-type) business for, well...a couple years. Anyway, I've been doing some local research to find out how much bakers in my local area are charging. I got a surprising email from one bakery in particular when I asked how much they charge for cupcakes. Get this.....$10/basic dozen & gourmet/specially decorated ones start at $1.00 each!!!! How in the world could the small cupcake biz I would start compete with that?!?!

Their cakes are GOOD. I recently got married last year and saw them at a bridal show, so immediately I had to run over and sample their cake to see just how good it is and WOW...their flavors are to die for. So it's not like they're just some bakery that has no idea what they're doing.

They make everything from tortes to cupcakes to wedding cakes. When I was figuring MY costs for cupcakes I was thinking of charging $2.00 to $2.25 per basic flavor cupcake to $2.50 for a gourmet cupcake. My cakes are good, don't get me wrong, but how am I ever going to get business when theirs are just as good and only $0.83?!?!? That's just crazy!

So disappointing...I just can't figure how they could possibly turn any kind of profit with this pricing.

7 replies
carmijok Posted 6 Jan 2012 , 1:34am
post #2 of

They must have very low overhead, great wholesale prices and sell lots of volume. Or perhaps they charge more in other areas like wedding cakes. Maybe you should get a job there and learn how they do it! I'm only half kidding about that. icon_wink.gif

JillyPlot Posted 6 Jan 2012 , 1:35am
post #3 of

Maybe they don't make a big profit off of cupcakes, but make enough off other products that it offsets the costs?

Artsygurl Posted 6 Jan 2012 , 1:44am
post #4 of

They must have to charge out the (behind) for their wedding cakes to make a profit. They have a storefront and all so I can't imagine their overhead to be that low. They're only open 3 days a week. I just don't know how I would survive with them charging so little thumbsdown.gif

AnnieCahill Posted 6 Jan 2012 , 2:51am
post #5 of

You need to research the demographics in your area. Believe me, people WILL pay for a higher priced product if you market correctly.

There is a bakery in my town and all they use are DH mixes. They leave the cupcakes in the case for days and they get rock hard and dry. Their "buttercream" has no butter in it whatsoever. They charge $1.35 a slice for a wedding cake. And they have horrible reviews on Google and Yelp.

You have to target your marketing to the types of clients you want. You shouldn't just say "I want everyone to shop here." Do the research and see what you come up with. Make sure you are advertising and producing products which are conducive to what your target consumers would buy.

I would also beware the cupcake trend. It will pass (woot!-sorry I'm a cupcake hater) so you definitely need to set your sights on other desserts that maybe the competition doesn't offer.

Good luck!

jason_kraft Posted 6 Jan 2012 , 3:24am
post #6 of

If you want to get into the cake business, I would recommend working for them as an employee (or hourly contractor) until they go out of business. Then buy their assets for cheap and open your own place.

Being skilled at baking and decorating has absolutely nothing to do with being skilled at running a successful business.

Rachie204 Posted 6 Jan 2012 , 4:19am
post #7 of

jason, that made me laugh. While we can't say for sure how they charge so little, if they are pricing all of the cakes this low there is a good chance they won't be around much longer.

Annabakescakes Posted 6 Jan 2012 , 4:42am
post #8 of
Quote:
Originally Posted by jason_kraft

If you want to get into the cake business, I would recommend working for them as an employee (or hourly contractor) until they go out of business. Then buy their assets for cheap and open your own place.

Being skilled at baking and decorating has absolutely nothing to do with being skilled at running a successful business.


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