Thread For People Who Like Pricing!

Business By Bridgette1129 Updated 19 Mar 2012 , 10:37am by Roxy073087

Bridgette1129 Posted 20 Feb 2012 , 8:52pm
post #61 of 104

That definitely does! I thought that was kind of where to start but didn't know if it was that simple. With that said though, marketing is something I wasn't really looking at. The advertising vs marketing article was very helpful!

AnnieCahill Posted 20 Feb 2012 , 9:31pm
post #62 of 104

Bridgette, are you already renting this commercial space? If so, you don't have your pricing worked out yet? I just want to see if I understand this correctly.

I am very happy and excited for you but I'm also concerned. I would get a business plan together ASAP.

http://www.businessknowhow.com/startup/business-failure.htm

If you fail to plan, you plan to fail. We want to see you succeed.

Bridgette1129 Posted 20 Feb 2012 , 10:45pm
post #63 of 104
Quote:
Originally Posted by AnnieCahill

Bridgette, are you already renting this commercial space? If so, you don't have your pricing worked out yet? I just want to see if I understand this correctly.

I am very happy and excited for you but I'm also concerned. I would get a business plan together ASAP.

http://www.businessknowhow.com/startup/business-failure.htm

If you fail to plan, you plan to fail. We want to see you succeed.




I completely understand your concern. I have my business plan 95% complete. The pricing things that I was confused about were just flat priced cakes. I like the idea of having simple flat prices cakes that aren't custom but was having trouble pricing them out. They are not on my menu currently. I have my pricing down perfect for custom cakes the start at X amount per serving.

Also, since I am in baking school full-time, I'm just starting this business small for now, that's why I don't have everything COMPLETELY figured out. I understand if you're reading all this thinking "What is wrong with this girl?!" Lol.

Also, I have not done a carved cake so I was asking for insight on that as I have not put that on my menu or figured out pricing on it yet.

ajwonka Posted 21 Feb 2012 , 3:17am
post #64 of 104
Quote:
Originally Posted by Bridgette1129

Quote:
Originally Posted by ajwonka

My smash cake is 4". The last 2 weekends I've done 2 & 3 tier custom 1st bday cakes. Each also ordered a smash cake. I explained that a 4" round, bc icing, same flavor as top tier (which yielded extra batter anyway), child's name = $5. Neither opted for that & each ordered a 4" with more custom decoration for $15. Seems silly to me but whatever!



Okay! Thanks! Is $15 your standard price for 4" or do you not offer them except for smash cakes? I sold one for a mini cake for Valentine's and charged $17 after a $3 VDAY discount. I don't have 4" on my menu but had them as a mini cake special for 2 (even though they serve more than 2).




I don't offer a 4", too much of a pain to ice those tiny things!

sillywabbitz Posted 21 Feb 2012 , 2:53pm
post #65 of 104

Wow,
This is definitely the best pricing thread to date! Couple of things that I haven't seen mentioned yet. Sorry if this is longicon_smile.gif

For smash cakes. I will do a free jumbo cupcake for the birthday kiddo same flavor and frosting as main cake with coordinating sprinkles. I make this before the cake so I'm sure not to run out of batter. Custom design smash cakes are charged by size and design.

I started with spreadsheets and switched to the Cakeboss software after seeing it in action. For me it's worth every penny. It has a section for all ingredients and supplies, boxes, boards etc and automatically calculates the cost you have in the cake. Also includes a section for hourly wage and overhead amts per order. I'm still working on calculating my overhead cost as far as electric, gas and water. I feel im guessing at these and i don't like that. But I have no problem with telling people my prices now that I know exactly what the cake is costing me out of pocket and for my time. It also does order tracking, sales tax and shopping lists which is awesome!

I read here on CC that some people price their cakes by level and I have kind of adopted this pricing structure.I don't want to feel like I'm nickel and dimming people for every little thing, filling, bow etc. The below is my pricing for buttercream cakes with fillings. Level one: cake would be basic buttercream cake,bc border and message, maybe simple decorations at 2.50 per serving. Level two cake would be level one plus basic fondant accents such as stripes, polka dots or plunger flowers or detailed buttercream work like BCT and a number or letter topper at 3.00 a serving. Level 3 would be more extreme detail such gum paste flowers ( up to a certain number), bow toppers, pearl borders, stenciling etc for $3.50 a serving. Then 3D carved cakes are priced by design and size. Up charge of $1 per serving on all cakes if covered in fondant instead of buttercream.

When I started this I went back and looked at every cake I had done and assigned it a level and determined what I should have charged for the cake. Most of the cakes were what I expected but I did discover that 6 inch cakes at the higher levels weren't worth the work and I think this is why people set minimums for orders. I don't have a minimum technically because I will do smaller cupcake orders but I basically don't do six inch cakes above level 2. They look dinky and are not worth the effort.

FYI, when I did a cake for a friend (the 8 inch Elvis cake in my pics). I used the level system and calculated the cost. It seemed expensive. So I re-costed using my level 1 pricing and charging per item for the figurine and the record topper. No matter which way I calculated it, it came out to $70 and that told me my pricing method is right for me.

Just wanted to put that out there in case people don't want to charge based on an item by item design.

I'm really enjoying this thread.

Bridgette1129 Posted 21 Feb 2012 , 6:58pm
post #66 of 104
Quote:
Originally Posted by sillywabbitz

I read here on CC that some people price their cakes by level and I have kind of adopted this pricing structure.I don't want to feel like I'm nickel and dimming people for every little thing, filling, bow etc. The below is my pricing for buttercream cakes with fillings. Level one: cake would be basic buttercream cake,bc border and message, maybe simple decorations at 2.50 per serving. Level two cake would be level one plus basic fondant accents such as stripes, polka dots or plunger flowers or detailed buttercream work like BCT and a number or letter topper at 3.00 a serving. Level 3 would be more extreme detail such gum paste flowers ( up to a certain number), bow toppers, pearl borders, stenciling etc for $3.50 a serving. Then 3D carved cakes are priced by design and size. Up charge of $1 per serving on all cakes if covered in fondant instead of buttercream.




Charging by level has interested me and now that I'm a business, I really am considering it. I love the idea that people (and I) don't feel like they're being nickel and dimed but I'm still getting paid for the extras they want.

The only question I have is how do you set this up on your website? I have seen some that have huge charts and it seems like it would be overpowering to customer. Do you use asteriks by the cakes or do you not use that system for flavors too and just design?

Thanks for the long post, I love them icon_smile.gif

cheeseball Posted 22 Feb 2012 , 6:29pm
post #67 of 104

*Sighs happily* This is what I love to see on this site. People willing to help each other. No drama.

Bridgette1129 Posted 22 Feb 2012 , 11:17pm
post #68 of 104

Sooooo, I delivered a cake (gratis) to my aunt yesterday for her birthday. She works in a hospital. She showed everyone the cake and they oo-ed and aww-ed and the whole sha-bang. Some even got to try it and I saw on Facebook that they loved it.

Well the person in charge of monthly birthday and other occasion cakes contacted me about half sheet cakes, as the bakery they ordered from for many years just went out of business.

I hadn't even priced out sheet cakes yet because I wasn't planning on selling them, but I thought what the hell it will be 1-3 cakes per month, guaranteed. So I searched CC for forums about sheet cakes and figured the cheapest I could sell a 2" tall HALF sheet cake WITH filling would be $70. It's 14 cups of batter! :|

She replied and this is part of what she said "We were paying $65 to $75 for a full half sheet, two layers with two fillings." I hate that she typed "full half sheet".... what does that even mean? And 2 layers with 2 fillings? Is that 2 fillings on top of eachother?

Would you reply? Would you ask for more clarification? When I emailed originally I said how many servings for a 2" cake and 4" cake, both with filling. I even asked how many servings they typically need but she didn't say. So I am unsure if $70 is right on the dot or they were paying $70 for a 4" cake. I am assuming they were paying $70 for 108 servings because she said I was out of her price range.

Thanks for any help or opinions you can provide!

sillywabbitz Posted 22 Feb 2012 , 11:45pm
post #69 of 104

First the definition of 1/2 and 1/4 sheet cakes vary from person to person so you absolutely need to figure out how many servings she's going for. It's better not to take the job than start selling yourself short. Ask your aunt if she has seen the birthday cakes in the past and how they were laid out. I'm not sure I understand the two fillings. This is good steady work if it doesn't become a hassle but don't price it so you're not making any money. You'll resent it and eventually it may keep you from taking other orders at full price.

Bridgette1129 Posted 23 Feb 2012 , 1:07am
post #70 of 104
Quote:
Originally Posted by sillywabbitz

First the definition of 1/2 and 1/4 sheet cakes vary from person to person so you absolutely need to figure out how many servings she's going for. It's better not to take the job than start selling yourself short. Ask your aunt if she has seen the birthday cakes in the past and how they were laid out. I'm not sure I understand the two fillings. This is good steady work if it doesn't become a hassle but don't price it so you're not making any money. You'll resent it and eventually it may keep you from taking other orders at full price.




Thank you. I ended up sending her a nice email asking for clarification. I just didn't know if it was right since she politely shot me down. But I did email her so we will find out if it's the same size cake! It would be very nice to have a steady cake order without losng money! I will have to turn it down if it isn't the same size. That would mean the business was selling them for almost as cheap as costco! Costco sells half sheet cakes for $16.99 :|

rubiarubia Posted 23 Feb 2012 , 7:11am
post #71 of 104

This thread is incredible! Thank you to everyone who has contributed!

I'm also in the midst of trying to price everything. Luckily, I only have 3 local competitors (direct, there are other competitors but not that are hitting the same sort of market), and they all charge about $3/serving. So that gives me a solid starting point.

So I have a few different questions:

For those who do custom cakes, do you offer decor customization? Or do you just do something simple unless they specify otherwise? And if you DO offer complete customization, is this all over the phone, email, consultations, or..? Thus far, I've just done custom messages, and my cakes are simply but elegantly decorated.

While a major facet of my business is special-order cakes, I'm also doing custom desserts for restaurants. In fact, I just got my first account yesterday! I'm starting out just doing desserts for a beer/food pairing event they have once a month (which is convenient because I have a line of desserts made with local craft beer). Their budget is really tight this month due to a new head chef, and the addition of desserts at kinda the last minute, so I'm charging them just what's in their budget. It will yield a VERY low profit for me, and I've told them that this can be an introductory price, and we will re-negotiate for future events. So the question is, what is a normal profit margin to expect for things like this? It is catering, I suppose, to some degree, although it's for resale at a restaurant. I'm providing dessert for 60 people, two items (small servings). Again, I'm not looking for specific prices on what I should charge, but just profit margin. I'm also going to be doing their future banquet desserts, so I need to set up some sort of pricing schedule (and hopefully getting other restaurant accounts!). Thoughts?

I thought I had more questions, but can't think of them for now. Thanks again, everyone!

costumeczar Posted 23 Feb 2012 , 11:52am
post #72 of 104

I have a flat price that includes most decorating that would be on a "regular" wedding cake. That way I don't have to add ten cents here and ten cents there for every little thing. If someone wants a huge cascade of gumpaste then I'd add on for that, but for most designs I just have one all- inclusive price.

I had a client the other day who said that they went to someone who was adding on for everything, and it really put them off. I think that when you start doing that the customer perceives it as being nickel and dimed to drive the price up, so it's better to avoid that.

Stephy42088 Posted 23 Feb 2012 , 2:06pm
post #73 of 104

http://www.mysweetlifeshop.com/pricing.html
Here is my webpage for pricing. It definitely needs some work and tweaking, which I will do as time goes on. I actually created it out of pure frustration because I was spending so much time on small celebration cakes that tend to be so overly detailed where as many of the wedding cakes I do are simply iced in white buttercream and then flowers are added...easy peasy. But again, the pricing page needs some work so let me know what you all think and I hope it helps some of you as well! icon_smile.gif

erin12345 Posted 23 Feb 2012 , 2:47pm
post #74 of 104

It is helpful to me as I find pricing so difficult. I like the idea of having a sample picture to correlate with the pricing level. Thanks for the ideas.

sillywabbitz Posted 23 Feb 2012 , 4:30pm
post #75 of 104
Quote:
Originally Posted by Stephy42088

http://www.mysweetlifeshop.com/pricing.html
Here is my webpage for pricing. It definitely needs some work and tweaking, which I will do as time goes on. I actually created it out of pure frustration because I was spending so much time on small celebration cakes that tend to be so overly detailed where as many of the wedding cakes I do are simply iced in white buttercream and then flowers are added...easy peasy. But again, the pricing page needs some work so let me know what you all think and I hope it helps some of you as well! icon_smile.gif




Thank you for posting this. This is exactly how I visualize my pricing page which I haven't gotten up and running yet but I am now much more confident of how it will look. Also you fixed 2 of my biggest problems. I notice that your first pricing level starts with fondant accents and a basic topper. I had mine as plain buttercream but I realized no one really wants anything that plain or more importantly I don't want to make anything that plain. Anyway you inspired me to ditch my level one and switch everything up. I also like that you say fondant covered cakes are priced seperately. I don't do many fondant cakes and it was really going to clutter up my pricing page if I included it.

Thanks again for sharing.

AZCouture Posted 23 Feb 2012 , 5:45pm
post #76 of 104
Quote:
Originally Posted by costumeczar

I have a flat price that includes most decorating that would be on a "regular" wedding cake. That way I don't have to add ten cents here and ten cents there for every little thing. If someone wants a huge cascade of gumpaste then I'd add on for that, but for most designs I just have one all- inclusive price.


Me too basically. My pricing allows for a good amount of detail. So if someone wants something that's relatively simple, then I'm making out good that day.

Bridgette1129 Posted 23 Feb 2012 , 5:59pm
post #77 of 104
Quote:
Originally Posted by Stephy42088

http://www.mysweetlifeshop.com/pricing.html
Here is my webpage for pricing. It definitely needs some work and tweaking, which I will do as time goes on. I actually created it out of pure frustration because I was spending so much time on small celebration cakes that tend to be so overly detailed where as many of the wedding cakes I do are simply iced in white buttercream and then flowers are added...easy peasy. But again, the pricing page needs some work so let me know what you all think and I hope it helps some of you as well! icon_smile.gif




Your pricing page is great! It's nice to see examples. Do the customers respond well to this?
Thanks!

costumeczar Posted 23 Feb 2012 , 8:03pm
post #78 of 104
Quote:
Originally Posted by AZCouture

Quote:
Originally Posted by costumeczar

I have a flat price that includes most decorating that would be on a "regular" wedding cake. That way I don't have to add ten cents here and ten cents there for every little thing. If someone wants a huge cascade of gumpaste then I'd add on for that, but for most designs I just have one all- inclusive price.

Me too basically. My pricing allows for a good amount of detail. So if someone wants something that's relatively simple, then I'm making out good that day.


thumbs_up.gif

costumeczar Posted 23 Feb 2012 , 8:19pm
post #79 of 104

I don't know who it was (sorry, it's the screen names that get me) but someone emailed me from this thread, so I thought I'd post my response. It just explains how I do my pricing and why I don't have a price chart on my website:



Since I do everything custom I don't put prices on my site because it's too complicated. I do have a basic range listed on this page http://www.acaketoremember.com/flavors-and-pricing.html but what was happening was I used to have a price per serving, then people would come in and not understand that fondant cost more, or the design they wanted wasn't as "simple" as they thought, etc.



I changed to a per-cake price a while ago, not a per-serving price. This is an article I wrote about that: http://acaketorememberva.blogspot.com/2009/11/how-i-price-my-wedding-cakes.html I actually have a blog entry going up (I think next week), that has my serving chart on it. It gives a range of servings, and what I did was just use the average and multiply that by a price per serving to get the cost of the cake. So it's one flat price per cake, with a serving range, and the bride can decide if she wants that range or wants to go up or down. I hope that makes sense, it makes sense to me, but not always when I try to explain it!



If people call me or email and want to know how much a cake will be, I can look at the chart and tell them that it would be this much without having to mess around with design issues, since I've included the cost of most designs in the price per cake. If something is simple that's an easy day for me, but if someone wants something more complicated I'll still be getting a decent profit for it.



It actually works better for me to have people call and talk to me, or send me email photos of cakes they want and ask how much it would be. Once you get a personal contact with people you can start to sell to them, but using a chart on a website doesn't give you the chance to tell them WHY they should pay you your price for a cake. If they see a higher price in print they'll just say "I can't afford that", but if they talk to you they might understand that they're paying for your experience and skill, not just for the cake.

Bridgette1129 Posted 23 Feb 2012 , 9:59pm
post #80 of 104
Quote:
Originally Posted by costumeczar

I don't know who it was (sorry, it's the screen names that get me) but someone emailed me from this thread, so I thought I'd post my response. It just explains how I do my pricing and why I don't have a price chart on my website:




It was me who emailed you. Thanks for taking the time to explain this! It helps a lot.

I have a per serving price right now, but I also haven't done wedding cakes yet. I'll have to try this way and see what I come up with!

costumeczar Posted 23 Feb 2012 , 11:11pm
post #81 of 104
Quote:
Originally Posted by Bridgette1129

Quote:
Originally Posted by costumeczar

I don't know who it was (sorry, it's the screen names that get me) but someone emailed me from this thread, so I thought I'd post my response. It just explains how I do my pricing and why I don't have a price chart on my website:



It was me who emailed you. Thanks for taking the time to explain this! It helps a lot.

I have a per serving price right now, but I also haven't done wedding cakes yet. I'll have to try this way and see what I come up with!




Well duh, that shows how alert I am, haha! icon_rolleyes.gif

JillycakesEtc Posted 24 Feb 2012 , 9:24pm
post #82 of 104

OMG!!! I love this topic!! It seems like so many people don't want to discuss specifics?? We are all responsible for doing our own market research but, this has been so helpful to me!!! Thank you!!! Keep the comments coming!!

BTW-what would you/whomever charge for this: 8" 2 layer, choc/choc, covered in fondant, roses, etc.
http://www.linkedin.com/redirect?url=https%3A%2F%2Fwww%2Efacebook%2Ecom%2Fphoto%2Ephp%3Ffbid%3D356159617739240%26set%3Da%2E315828135105722%2E79985%2E308382942516908%26type%3D1%26ref%3Dnf&urlhash=BqUV&_t=tracking_disc
Thanks!!!

jason_kraft Posted 24 Feb 2012 , 9:41pm
post #83 of 104
Quote:



To come up with an accurate price you need to add up your costs for the product (ingredients, labor, and overhead) then add a profit margin (usually in the 15-30% range).

We would probably charge around $100 for that cake, but that doesn't really help you much since our costs will be different from your costs.

JillycakesEtc Posted 24 Feb 2012 , 9:54pm
post #84 of 104
Quote:
Originally Posted by jason_kraft



To come up with an accurate price you need to add up your costs for the product (ingredients, labor, and overhead) then add a profit margin (usually in the 15-30% range).

We would probably charge around $100 for that cake, but that doesn't really help you much since our costs will be different from your costs.




Thank you so much!! I just want guidance in this arena...I would never get upset if someone quoted what I felt to be high or lowicon_smile.gif. I did this cake for my mother but, she asked what I would normally charge for this and I told her $75-80 and she about fell over...lol! I just wanted to know if I was on the right trackicon_smile.gif. Thanks so much!!!!!

Bridgette1129 Posted 24 Feb 2012 , 10:36pm
post #85 of 104
Quote:
Originally Posted by JillycakesEtc

Quote:
Originally Posted by jason_kraft



To come up with an accurate price you need to add up your costs for the product (ingredients, labor, and overhead) then add a profit margin (usually in the 15-30% range).

We would probably charge around $100 for that cake, but that doesn't really help you much since our costs will be different from your costs.



Thank you so much!! I just want guidance in this arena...I would never get upset if someone quoted what I felt to be high or lowicon_smile.gif. I did this cake for my mother but, she asked what I would normally charge for this and I told her $75-80 and she about fell over...lol! I just wanted to know if I was on the right trackicon_smile.gif. Thanks so much!!!!!




My 8" start around $42 so depending on how much time the roses took... I'm not sure. Probably $70? I'd have to price out the fondant and figure out how much labor that would take. Probably not less than $70 but maybe more.

mystsparkle Posted 24 Feb 2012 , 11:37pm
post #86 of 104

I'm going to jump in and ask a pricing question to: Im just getting my prices ready to really start advertising and such: When it comes to the margin (correct word?) for the ingredients cost, what is your mark up? I went through 20%,33%,60%,80%and 100%, and decided (possibly not sure really) to go with 33% mark up and then add for the time it would make to make the batter/frosting/fondant/bake it/frost it/fondant it...etc...and went with $20 an hour..so for my 8inch cake covered in fondant (just the basic 4 inch/filled (another ?..do you torte all your cakes, so it has 3 fillings?) covered in fondant I would be charging the customer $30. And my cost would be $15 (for ingredients). does this seem like enough mark up? I don't do wedding cakes (right now) so most of my cakes are for birthday's and do include a lot of fondant decorations (ie figures, lots of designs, etc) so on top of that I was thinking of saying an additional $25 design fee per hour...but it's obvious it will be more than the $30 because there most likely will be more designs...am I rambling now? Anyways, $30 starting cost of a fondant covered 8inch round, too high, too low? Also, should i just bump up the price to something higher to already cover decorations? Thanks guys!

jason_kraft Posted 24 Feb 2012 , 11:51pm
post #87 of 104
Quote:
Originally Posted by mystsparkle

I'm going to jump in and ask a pricing question to: Im just getting my prices ready to really start advertising and such: When it comes to the margin (correct word?) for the ingredients cost, what is your mark up? I went through 20%,33%,60%,80%and 100%, and decided (possibly not sure really) to go with 33% mark up and then add for the time it would make to make the batter/frosting/fondant/bake it/frost it/fondant it...etc...and went with $20 an hour..so for my 8inch cake covered in fondant (just the basic 4 inch/filled (another ?..do you torte all your cakes, so it has 3 fillings?) covered in fondant I would be charging the customer $30. And my cost would be $15 (for ingredients). does this seem like enough mark up? I don't do wedding cakes (right now) so most of my cakes are for birthday's and do include a lot of fondant decorations (ie figures, lots of designs, etc) so on top of that I was thinking of saying an additional $25 design fee per hour...but it's obvious it will be more than the $30 because there most likely will be more designs...am I rambling now? Anyways, $30 starting cost of a fondant covered 8inch round, too high, too low? Also, should i just bump up the price to something higher to already cover decorations? Thanks guys!



I'm not sure how you're getting a price of $30 if ingredients are $15 and your labor is $20/hour, unless you can put together an 8" cake with fondant in 5 minutes. $20-25/hour is a little high but may be doable, if the order takes 2 hours to complete with $20 in overhead you are looking at a cost of $75-85 and a price in the $90-100 range with a 20% profit margin.

I believe in applying markup to all your costs (ingredients, labor, and overhead). This makes the calculation easier since you can just add up your costs and apply the markup to the total instead of marking up some cost components and not others, plus it builds in extra padding to account for less than perfect efficiency. 20% is a good goal for a profit margin if your market supports it, and home-based businesses with less overhead and no rent may be able to hit 30%. (These numbers are for a comprehensive markup, if you are marking up only ingredients these percentages will be much higher.)

costumeczar Posted 25 Feb 2012 , 12:51am
post #88 of 104

Yeah, $30 for an 8" fondant cake is waaaay too low. Mine is $110 which includes the decorations etc, but if they want it plain white then they still pay $110 unless I'm feeling nice that day. Although most people who want an 8" fondant cake want something fancier.

GarciaGM Posted 25 Feb 2012 , 12:54am
post #89 of 104

mystsparkle, it's also important to notice how labor expense is different from profit margin. For example, in jason_kraft's formula, paying yourself $20/hour is your labor expense, but you still want to include a profit margin on top of that. A lot of people treat the hourly wage as their profit, but thinking about it from a business owner's perspective, if you had to pay that hourly wage to an employee, you aren't keeping any profit for your business. I think using a formula where you apply a profit margin to all costs is a much more sound business model.

Bridgette1129 Posted 25 Feb 2012 , 12:56am
post #90 of 104
Quote:
Originally Posted by mystsparkle

(another ?..do you torte all your cakes, so it has 3 fillings?)




Yes.

Quote by @%username% on %date%

%body%