Pricng Issue

Business By Ekaba Updated 12 Feb 2012 , 7:37am by mommachris

Ekaba Posted 10 Feb 2012 , 3:37am
post #1 of 20

I got a call from a friend of my brother and his fiance about them wanting a cake, such as the below picture.

http://farm4.staticflickr.com/3312/3476537128_6c9a0b1e5e_z.jpg?zz=1

They are stating they don't have a lot to pay for this cake and even seem to think that it can be done in buttercream. Bottom line, This is a fondant cake that is going to require a lot of work. The sock monkey looks like it's made of modeling chocolate and there are tedious details.

I don't want to do all this work and have them think they are only going to give me fifty dollars for this. They are already ordering sugar cookies from me for the sock monkey theme, which I charged them a dollar each for. (I did some for another member of their family last year - a baby shower - which is how these people came to call me since they liked the taste and look of the cookies) So I don't have a problem with that.

Basically, I am not sure what to quote them, since I am in the process of trying to legalize things as far as doing this full time. I don't want to be know for doing cheap cakes, and then have them giving my card to everyone and then have them thinking they're going to pay a cheap price for my cakes and so on. Any advice? Thanks!

19 replies
costumeczar Posted 10 Feb 2012 , 3:42am
post #2 of 20

First of all, there's no way that bottom tier will look anywhere near the same if you do it with all buttercream. You could get away with the top in buttercream, but not the argyle. The diamonds are cut out of fondant, and I can't tell if it's iced in the light blue or if that's fondant, but with the amount of fondant decoratons on it you might as well be charging them for a fondant-covered cake.

I'd tell them that it will be whatever the regular price that you'd be charging will be, and that's going to be a lot more than $50. If they don't like it they should go shop around. There's no way that they'll find it that cheap unless they get something that looks awful. It's not a good idea to start handing out big discounts because you'll never get over that and they'll expect it for the rest of all eternity.

Apti Posted 10 Feb 2012 , 5:06am
post #3 of 20
Quote:
Originally Posted by Ekaba

I got a call from a friend of my brother and his fiance about them wanting a cake, such as the below picture.
http://farm4.staticflickr.com/3312/3476537128_6c9a0b1e5e_z.jpg?zz=1
They are stating they don't have a lot to pay for this cake and even seem to think that it can be done in buttercream. Basically, I am not sure what to quote them, since I am in the process of trying to legalize things as far as doing this full time. I don't want to be know for doing cheap cakes, and then have them giving my card to everyone and then have them thinking they're going to pay a cheap price for my cakes and so on. Any advice? Thanks!




If you are in the process of becoming legal, you may wish to stop providing cakes until you ARE legal. (I am a hobby baker, but until retirement was in medical equipment sales so I have a great deal of business knowledge.)

Alternatively, you can let them know that you are in the process of becoming a professional custom baker. Thank them for their previous orders and tell them you greatly appreciate the past opportunities to cover your costs while perfecting your craft. However, since you will soon be providing custom baked products, you will also be charging the new, higher prices which reflect your current skills as a custom baker.

Then--I'd quote a minimum of $2.50 per serving. They will probably pass out and scream. If they do, they are NOT your future customers! (By the way, you are waaaay undercharging for the custom sock-monkey cookies.)

Also, it is your responsibility as a baker to know what IS and what ISN'T possible as far as cake design, and to educate the client. If you don't feel you can replicate that cake in buttercream, tell that to your client and suggest a viable alternative.

mplaidgirl2 Posted 10 Feb 2012 , 5:18am
post #4 of 20

Why not do the cake in buttercream. And just make the diamonds themselves in Fondant. The cake is pretty large designs so it should take a long time in either medium.
I give people an option with the characters.. Either buy a toy or if you want me to make it its $20-$50 more depending on the detail.

Ekaba Posted 10 Feb 2012 , 11:18pm
post #5 of 20

Thank you so much, everyone, for your solid advice. I am about to send them a text(she just texted me a photo of the cake)telling them that it's a fondant cake that's detailed and requires a lot of work, and that a cake like that would go from 100-150(or is that too high) The cake would be six inch on top and eight inch on bottom. Probably rice cereal treats for monkey. I also told them i understand if they don't want to go this route. I really don't want to do the cake(I am positive I could make it)but being that they are close friends of my future sister-in-law, I am kinda stuck)if they are going to be cheap about it. As far as the cookies, yeah, I know I undercharged them, but I can't go back on it now lol. I did similar ones that my sister-in-law ordered last year and that's why these people are calling me now. I didn't really charge her that much for them because I am not really in "business" but I just want to go about all of this the right way without offending anyone. Any more advice before I send the return text?icon_smile.gif Thanks again!

costumeczar Posted 10 Feb 2012 , 11:38pm
post #6 of 20

A fondant cake with 6-8" tiers would go for $165 to start if I did it, and that's before you start putting monkeys on it!

If you really want to get out of it you can tell them that you decided not to sell anything until you have a license and insurance, but this is how much it would be...

FromScratchSF Posted 10 Feb 2012 , 11:43pm
post #7 of 20

Yeah, perspective - I'd be in the $400-500 range for that cake. Argyle is HARD.

Awesome cake though. I'd pass on doing it.

Ekaba Posted 11 Feb 2012 , 12:06am
post #8 of 20

This cake has a lot of work to it, but I would do it for the right price. Then she also does not have a way to come and pick it up so I'd have to drive it there, and on and on. I am this close to walking away from it all, including the cookies. I am not trying to sound flaky, but you know how you just don't feel 'right' about something and it keeps niggling you in the back of your head? It's one of those things. I hardly know these people and I feel they are using my brother and his fiance to get over on me with a cheap deal, since we're "all friends". Even tried to convince me that doing the cake would be good for me too because of all the business I would get from the 200 or so people showing up for this event! lol. That right then and there tells me they don't want to pay a lot for this. My biggest fear is not having the liability and God forbid someone gets sick or what have you. Again, really really appreciate the information since I am new to all this pricing stuff.

Apti Posted 11 Feb 2012 , 12:15am
post #9 of 20

FromScratchSF and costumeczar are both excellent resources for advice on smart business decisions.
$150 would probably be a reasonable, "family/friend" price for a 6"/8" tiered cake*. I go along with the advice above. Quote a "almost-licensed-this-is-my-full-time-business-price" for the cake, provide the cookies, call it done. You will not be offending them, they are asking "how much the cake will be?" and all you are doing is telling them how much it will be. If they want to buy it for $150, yay. (By the way, the pricing estimates are based on a cake that measures up to custom bakery taste and appearance.)

*Using the Wilton wedding serving guide (industry standard for licensed, full-time bakeries), a 6/8 tier would serve 36. Even if you only charge $90 ($2.50x36=$90) PLUS your time/skill for the sock monkey, the cake is going to be priced at around $110 at low-low pricing.
http://www.wilton.com/cakes/making-cakes/baking-wedding-cake-2-inch-pans.cfm


I would suggest you spend the time needed to prepare a business plan, purchase CakeBoss software, and find out BEFORE you are licensed what you should be charging and who your target customers will be. People who have gotten cheap cakes/cookies in the past are probably NOT going to be your target customer base.

Here is a superb article on pricing from the CakeBoss website:
http://www.cakeboss.com/PricingGuideline.aspx

------------------

Just saw your response that came up while I was typing. Add delivery charges to the $150 (minimum). The current rate for mileage is: 55.5 cents per mile. Google the directions and add that to your cake price.

They probably will not order either the cookies OR the cake when you add the delivery fee.

If you truly want to walk away from the entire thing, tell them what costumeczar recommended:

"If you really want to get out of it you can tell them that you decided not to sell anything until you have a license and insurance, but this is how much it would be..."

Ekaba Posted 11 Feb 2012 , 2:40am
post #10 of 20

I actually have the cakeboss softwarer, but haven't really used it much yet. But I am planning to use it, as my main purpose of purchasing it was to see how much I should be charging for my cakes. I am still learning, but I don't think I do too bad and I want to be fair to myself as well as the client. Thanks again for wonderful advice everyone, it's really a load off !

underthesun Posted 11 Feb 2012 , 4:36pm
post #11 of 20

After researching cake shops in the nearest large city, I started two years ago at $4.00 a slice for fondant. $5.00 per bow and $50 per large animal. I would probably have charged another $20 for the design. Total for a 6 and 8" = $224.00
Now, I find myself with more experience. I have to turn cakes down because I'm booked. I charge $5.00 per fondant slice, $75.00 for the monkey, $15.00 per bow and at least $50 for the design ($15.00 per hour to do argyle - probably two hours of work), plus cost = $335.00. For close family, I'd do it as my we gift or maybe 80%.
Cost of goods is important! I own a bakery/take out lunch and we keep our cost of goods at 30% or less of our retail pricing.
Keep track of the hours it takes you and keep it in mind as your business grows. Don't list your pricing on your website and this way you can change your prices as you gain experience.
Last year 90% of my cakes were 2 tier. This year, 100% of my cakes are 3 tier plus.

kelleym Posted 11 Feb 2012 , 5:34pm
post #12 of 20
Quote:
Originally Posted by costumeczar

A fondant cake with 6-8" tiers would go for $165 to start if I did it, and that's before you start putting monkeys on it!



This is one of the funniest things I have ever read. icon_lol.gif

costumeczar Posted 11 Feb 2012 , 6:59pm
post #13 of 20
Quote:
Originally Posted by kelleym

Quote:
Originally Posted by costumeczar

A fondant cake with 6-8" tiers would go for $165 to start if I did it, and that's before you start putting monkeys on it!


This is one of the funniest things I have ever read. icon_lol.gif




Well hey! The monkeys cost extra! icon_wink.gif

mcaulir Posted 11 Feb 2012 , 8:49pm
post #14 of 20
Quote:
Originally Posted by Ekaba

Thank you so much, everyone, for your solid advice. I am about to send them a text(she just texted me a photo of the cake)telling them that it's a fondant cake that's detailed and requires a lot of work, and that a cake like that would go from 100-150(or is that too high) The cake would be six inch on top and eight inch on bottom. Probably rice cereal treats for monkey. I also told them i understand if they don't want to go this route. I really don't want to do the cake(I am positive I could make it)but being that they are close friends of my future sister-in-law, I am kinda stuck)if they are going to be cheap about it. As far as the cookies, yeah, I know I undercharged them, but I can't go back on it now lol. I did similar ones that my sister-in-law ordered last year and that's why these people are calling me now. I didn't really charge her that much for them because I am not really in "business" but I just want to go about all of this the right way without offending anyone. Any more advice before I send the return text?icon_smile.gif Thanks again!




Close friends to your future sister-in-law is practically nothing to you. Close friends to my sisters-in law are people I see very occasionally at my nieces and nephews birthday parties and that's it. These aren't people for whom you need to be providing any kind of discount.

I do free cakes for lots of people, including my sisters-in-law. They're family. Their families and friends are close to nothing to me and I don't do free stuff for them.

Ekaba Posted 11 Feb 2012 , 9:49pm
post #15 of 20

Walked away from all of it. They were supposed to come by this morning with the money and it's now 5pm, without a peep from them, and I called them a number of times(I am very funny about punctuality and taking people's word for things) so I just sent them a text and told them I couldn't do it. End of story. I know now, at least, not to get myself into something like this ever again....

Norasmom Posted 11 Feb 2012 , 10:24pm
post #16 of 20

That takes you out of an awkward situation. I bet they realized it couldn't be done at their price point!

Apti Posted 12 Feb 2012 , 1:02am
post #17 of 20
Quote:
Originally Posted by Ekaba

Walked away from all of it.




thumbs_up.gif

BizCoCos Posted 12 Feb 2012 , 2:41am
post #18 of 20

best thing, good luck

howsweet Posted 12 Feb 2012 , 2:57am
post #19 of 20

Glad to get to the part where you walked away! Just for fun, I quoted it out as a 5 over an 8 and it came to $270 for that cake. And I'm starting to notice my prices are on the low side.

You have to consider the cost of your ingredients, too. With my recipes, that cake would take about a pound of butter, 2lb powdered sugar, and $6 worth of fondant, figure $2 for the base - that's already about $12, so these guys basically were thinking you would do this for $37 after expenses?

mommachris Posted 12 Feb 2012 , 7:37am
post #20 of 20

Good for you!
You'd be hating every minute in the kitchen making those cookies and despising yourself if you ended up making the cake, too. icon_wink.gif

Also, you said something about not being able to charge them more for the cookies because you had done some for family at that price last year. Well, that was then and prices are jumping like crazy. I'd love to buy a loaf of bread for a buck fifty but those days are over in my grocery store.
A 'past' price has no effect on today's order.
Just wanted to remind myself, too since I caught myself last week almost quoting the same price for a cake that I made last spring. Bumped it up $15 and still got the order. icon_biggrin.gif

mommachris

Quote by @%username% on %date%

%body%