Am I Charging Too Much?

Business By jena2727 Updated 1 Mar 2012 , 4:57pm by Pebbles1727

jena2727 Posted 1 Mar 2012 , 1:49pm
post #1 of 8

Okay, I am pricing an order for a Mario theme cake. The client is having 35-40 people. This was a referral from a friend so I had sent some ideas and pricing for my friend to pass on. Of course the client liked the tiered cake with fondant accents. (See picture below) My price for this cake was about $127. Which I am pretty sure most are going to say it's under priced. I am using Alice's Pricing Matrix until I can afford to buy Cake Boss. The client said this was a bit out of her price range and asked if we could scale it down a bit and get the price around $70. I've cut everywhere I can think to get the price lower but that's only a few dollars. She asked about doing a smaller cake and adding cupcakes to make up the difference. Thats fine but you are still looking at the same serving number so the price isn't going to go down much. Also as I am just starting my business, I'd really like to do the cake. More so to add to my portfolio than the money! I need the money but it's a really cute cake! I am fighting myself so hard because I know if I start throwing out discounts for no reason it will hurt me later on. Sorry for the rambling!!
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7 replies
bluedaisies Posted 1 Mar 2012 , 1:52pm
post #2 of 8

I have this problem often... I just had someone want a 2 tier cake for $20.. lol

My opinion, if you REALLY want to do the cake, like for fun/pics/etc then go for and give her the discount. Otherwise, tell her that's the price and move on. icon_smile.gif

Pebbles1727 Posted 1 Mar 2012 , 2:06pm
post #3 of 8

Subtract the modeling cost for any fondant figures and purchasing of toys. Get her to provide those for you, which is what needs to be done due to copywright anyways. That should cut the cost some.

jena2727 Posted 1 Mar 2012 , 2:24pm
post #4 of 8

Oh goodness!! $20???? I personally wouldn't even spend the $70 on a cake for my child's birthday. I know my time is worth more than that but I most certainly understand when people are blown away by the pricing which is why pricing is so difficult for me. I adjusted the pricing slightly and gave her two options with cupcakes. I guess I ll wait and see what she says and then decide if I want to lower my profit...

TexasSugar Posted 1 Mar 2012 , 3:57pm
post #5 of 8
Quote:
Originally Posted by jena2727

...The client is having 35-40 people....My price for this cake was about $127...




The cake in the picture looks to be a 6/10 which would be 50 servings. Not counting the decorations (I wouldn't do them myself), it would be atleast $150 from me. A 6/8 combination would be 36 servings, at $108.

Quote:
Originally Posted by jena2727

...The client said this was a bit out of her price range and asked if we could scale it down a bit and get the price around $70.




Instead of trying to scale down, I would tell her what you can make for $70. It isn't going to be the same as the big cake, because she doesn't want to pay for that cake either. For me at $3 a serving I could make a cake that is almost 24 servings, so an 8in round is what I would offer at that price.

Quote:
Originally Posted by jena2727

...Also as I am just starting my business, I'd really like to do the cake. More so to add to my portfolio than the money! I need the money but it's a really cute cake!




If you want to do the cake for your portfolio, then do it. But I, personally wouldn't do it for her. I'd do it and give it away to a shettler or fire department (call first before you plan that out) or to who ever. Someone that would appreciate the work you put into it, and not try to cheat you out of your time and expenses. You have already told her you can not go any lower and still give her what she wants. It is time she either picks something different or she goes to a grocery store and gets a cake in her price range.

Quote:
Originally Posted by jena2727

...I am fighting myself so hard because I know if I start throwing out discounts for no reason it will hurt me later on.




Giving discounts to everyone that asks is not going to make you any money. And in the cake world doing grand cakes for very little pay is the best way to end up with cake burn out.

If you give her a cheap price, what are you going to do when she refers you to a friend and tells them, "just tell her you can't pay that price but can pay this. She gave me a $127 cake for $70." Or you give a price to someone and they say, "well you only charged so and so so much."

jena2727 Posted 1 Mar 2012 , 4:51pm
post #6 of 8

Thanks for the input!! I calculate my servings at Wilton size or less. So I calculate a 6/10 at 40 servings. The top 2 characters I wouldn't be making, I'll order those. I need to go with my head and do the right business thing and stick with my price!!

Thanks everyone!

Pebbles1727 Posted 1 Mar 2012 , 4:52pm
post #7 of 8
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If you give her a cheap price, what are you going to do when she refers you to a friend and tells them, "just tell her you can't pay that price but can pay this. She gave me a $127 cake for $70." Or you give a price to someone and they say, "well you only charged so and so so much."




That's true, and people do this quite often even if you don't offer discounts on a regular basis or to everyone. Just had someone to contact me and she wanted a smash cake for a photoshoot, so I quoted her a price, $21.60. She comes back with "Wow, that's too expensive, i was referred by a friend who orders from you all the time (mind you no name mentioned) and she said smashes are only $5.00" icon_eek.gif
Yeaahhhhhhh right!

Pebbles1727 Posted 1 Mar 2012 , 4:57pm
post #8 of 8
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The top 2 characters I wouldn't be making, I'll order those. I need to go with my head and do the right business thing and stick with my price!!




I wouldn't make any of them, just get customer to order them or purchase them for you. Our Target carries the whole line up. Customers usually drop off a pack of 6 to me, so all I do is place them on a cake once the landscape is done. I never purchase toppers, toys, or cake kits on behalf of a customer, if I did I would have to include that in a price of a cake, including shipping/travel/time.

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