Cake Pricing

Business By Laur1402 Updated 22 Feb 2012 , 4:55pm by kelleym

Laur1402 Posted 12 Jan 2012 , 10:54pm
post #1 of 9

I am BRAND new to the cake making business... It's a hobby that has always consisted of making cakes for family/friends. However, I recently made a friends wedding cake that had 250 guests and now I am getting requests to make more.. It was a lot of fun to make, but as I'm sure everyone knows extremely time consuming. I am definitely willing to make more cakes but not sure what to charge or where to begin?! Here is a picture of the wedding cake. How much would something like this go for? Thanks in advance for any help!! icon_biggrin.gif
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8 replies
jason_kraft Posted 12 Jan 2012 , 11:23pm
post #2 of 9

For 250 servings that cake would typically be in the $750-1500 range depending on the area.

Which state are you in? You'll want to make sure you can legally sell cakes made from home, some states require licensed commercial kitchens.

msthang1224 Posted 12 Jan 2012 , 11:25pm
post #3 of 9

Hi,

That's a beautiful cake, awesome job!!

Cake pricing is very difficult SOMETIMES but there is hope icon_smile.gif what I suggest you do is call around to some of yr local bakeries or cake decorators in yr area and ask them what this cake would cost. Explain details of cake and get what they charge. It will help you get a start on how much you would charge for yr creations.

Looking at yr cake and details, time, ingredients, supplies, me myself, I would charge btwn $800-$1000 which would include all of the above plus rental of cake base and delivery.

HTH

Laur1402 Posted 13 Jan 2012 , 1:52am
post #4 of 9

Thanks for the great information! I'll definitely look into what other bakery's charge.
I am located in Arizona (phoenix metro).. Where would I find that information?

msthang1224 Posted 13 Jan 2012 , 2:15am
post #5 of 9

You can try your government website or Agricultral website or information line for your state

suepers Posted 13 Jan 2012 , 7:42pm
post #6 of 9
AzCakeGuy Posted 21 Feb 2012 , 11:55pm
post #7 of 9

Suepers,

Great information. Just wanted to add to your post, I would definitely recommend anyone who runs a business out of their home to get their food service card and register with the Home Baked and Confectionary Goods program...

I know a lot of people may be scared off by this (I know I was), but the food service test can be taken entirely online... you watch about 2 hours of videos and answer questions in between sections... the questions are very easy -- if you watch the videos closely, they give all of the answers. Then, when you pass the test, you simply print a certificate and take it down to your local food worker office and get your photo ID.

Registering with the Home Baked and Confectionary program is even easier... I believe there were 3 or 4 questions... simple things, like the name of your business, address, etc. icon_smile.gif Registration is free and easy.

For those that are really trying to make a business out of creating cakes, I would also recommend registering your business name with the AZ Corporate Commission ( http://www.cc.state.az.us/divisions/corporations/filings/forms/index.asp ) and getting a business license / TPT for the city you live in. Registering your business with the AZ Corporate Commission should be around $150, which would include registering your name and the newspaper filing fees you need to pay as well. Not too difficult there.

The business license isn't too expensive either (Goodyear is $75/year)...

Now... some people ask me, why get a business license/Transaction Priv Tax.... Well, it's true that getting these would probably require you to pay taxes on the items you sell (assuming they are taxable)... BUT, what it does for you can also be a great benefit....

Many other businesses allow you to use your business license/TPT... by doing so, you don't pay tax on items you purchase... Some of these places:

Sams Club (I save a lot here)
Restaurant Depot (I-17 and Bethany Home)... again, saves a ton of money
Bake Me a Cake Supply (I-10 and Estrella Parkway)... no tax on any of your cake supplies
Costco (I don't have a membership here, but others have tad me you can use your TPT here as well)

As you can see, you can save a lot of money by simply having your business license and TPT.

I would really recommend it to everyone. You can save a lot of money on items you purchase for you business!

Thanks!

FromScratchSF Posted 22 Feb 2012 , 12:33am
post #8 of 9
Quote:
Originally Posted by msthang1224

Hi,

That's a beautiful cake, awesome job!!

Cake pricing is very difficult SOMETIMES but there is hope icon_smile.gif what I suggest you do is call around to some of yr local bakeries or cake decorators in yr area and ask them what this cake would cost. Explain details of cake and get what they charge. It will help you get a start on how much you would charge for yr creations.

Looking at yr cake and details, time, ingredients, supplies, me myself, I would charge btwn $800-$1000 which would include all of the above plus rental of cake base and delivery.

HTH




No disrespect MsThang, but this is horrible advice that drives me nuts every time I see it here.

I hate to sound abrasive, but calling around to bakeries to find out what they charge has zero relevance on what YOU can charge when you are brand new, have zero experience (no formal training) and baking out of your house. They have a shop, which means rent, employees, liability insurance, equipment leases, delivery vehicles, bulk ingredients, pay city, county, state, & federal taxes, may or may not provide healthcare, have display cases of product that may or may not sell, and a whole list of other expenses that a home baker will never have.

Pulling pricing out of thin air based on what "everyone else" charges in your area is a great way to never understand how to run your business and become profitable. Asking random internet people from all over the world what they would charge if they made that same cake is no help either because you don't have my overhead, recipes, or experience. You didn't even state what the cake was... 5 box mixes and some crisco icing? Or a gourmet, top shelf artisan organic scratch cake? Massive price, time and skill difference.

The only way you can figure out your pricing is to do your own homework, which involves adding up your expenses, how long it will take you to make any cake, your overhead, and how much profit you want.

I suggest doing a search here on CC, this topic comes up daily, you could probably learn a lot just from reading the archives.

Good luck!

kelleym Posted 22 Feb 2012 , 4:55pm
post #9 of 9
Quote:
Originally Posted by FromScratchSF



No disrespect MsThang, but this is horrible advice that drives me nuts every time I see it here.

I hate to sound abrasive, but calling around to bakeries to find out what they charge has zero relevance on what YOU can charge when you are brand new, have zero experience (no formal training) and baking out of your house. They have a shop, which means rent, employees, liability insurance, equipment leases, delivery vehicles, bulk ingredients, pay city, county, state, & federal taxes, may or may not provide healthcare, have display cases of product that may or may not sell, and a whole list of other expenses that a home baker will never have.

Pulling pricing out of thin air based on what "everyone else" charges in your area is a great way to never understand how to run your business and become profitable. Asking random internet people from all over the world what they would charge if they made that same cake is no help either because you don't have my overhead, recipes, or experience. You didn't even state what the cake was... 5 box mixes and some crisco icing? Or a gourmet, top shelf artisan organic scratch cake? Massive price, time and skill difference.




I disagree. You have to know the market value of custom cakes in your community. If she blindly comes up with a price of $1.50 per serving based on her experience and expenses, then she becomes one of the dreaded undercutters, who are devaluing the product and putting bakeries out of business. You have to have a starting place, and finding out what the going rate is, is a good one. Likewise, if she doesn't know the market value, and comes up with a price per serving of $10.00 when everyone else is in the $3 - $5 range, her business is dead in the water. You have to know the market.

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