Ducky316 Posted 7 Dec 2012 , 12:56am
post #1 of

Ok...So I had someone approach me on facebook about making her birthday cake. She wanted a two layer ten inch cake covered in purple fondant, dressed in purple and white fondant roses, and my hand made gumpaste butterflies (she saw these on another one of my cakes) I quoted her $55.00 and told her I'd need a $25.00 deposit by friday Dec 7th. She needs her cake on Dec 12th. Now all of a sudden she's trying to bargain me down...How much for a smaller cake....what if you leave off the butterflies and flowers and just put a bow on it...yadda yadda...

I ended up giving her a break and taking two inches off of the cake for $10.00, keeping the original design.... but should I have done that???

If you couldn't tell, I'm just a home decorator, and have only sold a handful of cakes, and would hate to miss the opportunity to sell another one, but then I don't want to sell myself short...I know better than anyone how much time I put into my cakes.....but I still wonder if I'm charging too much...

 

Thanks

Melanie

29 replies
costumeczar Posted 7 Dec 2012 , 12:59am
post #2 of

You're not charging enough! Just because people try to bargain with you doesn't mean that you need to agree to it. If you figure out how much you're making after expenses, and how long it's going to take you to do that cake, you're probably going to be making something like $4 an hour. Not cool. If people don't want to pay for a custom cake then they should go to Walmart, they shouldn't expect you to lower your already too-low prices!

rdjr Posted 7 Dec 2012 , 1:15am
post #3 of

You got robbed with this order!!

Ducky316 Posted 7 Dec 2012 , 1:15am
post #4 of
Quote:
Originally Posted by costumeczar 

You're not charging enough! Just because people try to bargain with you doesn't mean that you need to agree to it. If you figure out how much you're making after expenses, and how long it's going to take you to do that cake, you're probably going to be making something like $4 an hour. Not cool. If people don't want to pay for a custom cake then they should go to Walmart, they shouldn't expect you to lower your already too-low prices!

I was afraid of either charging too much or not enough LOL Regardless of what I charge, I get the point...I need to stand firm on my original price. Since I am pretty new to decorating, (only at it for about 1 1/2 years) I'm trying to charge according to what I can do....my cakes still aren't perfect and neither is my marshmallow fondant LOL Thank you for replying!!! I appreciate it!icon_biggrin.gif

BakingIrene Posted 7 Dec 2012 , 1:17am
post #5 of

Whether you are a home baked or a business, NOBODY HAS THE RIGHT TO ASK YOU TO EARN LESS THAN MINIMUM WAGE.

 

And should they try to bargain, you say "the law requires me to be paid minimum wage. No minimum wage, NO CAKE".

Ducky316 Posted 7 Dec 2012 , 1:19am
post #6 of

I had a feeling I shouldn't have dropped my price...I won't in the future!! Thank you guys!!!

Ducky316 Posted 7 Dec 2012 , 1:23am
post #7 of
Quote:
Originally Posted by costumeczar 

You're not charging enough! Just because people try to bargain with you doesn't mean that you need to agree to it. If you figure out how much you're making after expenses, and how long it's going to take you to do that cake, you're probably going to be making something like $4 an hour. Not cool. If people don't want to pay for a custom cake then they should go to Walmart, they shouldn't expect you to lower your already too-low prices!

I love that you said this..and love the Walmart remark! Thank you!!!

remnant3333 Posted 7 Dec 2012 , 1:34am
post #8 of

When you think about all the ingredients needed for cake plus all ingredients for the butter cream icing, then we have all the ingredients for the fondant, etc. Piping Bags and food coloring paste for the fondant or gumpaste.  Also electricity for cooking the cakes. Then whatever time involved in making your butterflies, bows, etc.  People just don't realize how much goes into making cakes. I didn't even mention cleaning up the kitchen and washing dishes for probably 30 to 40 more minutes after you are done.  Only people who make them really know what is involved. When you add up all of these things together you are spending more than you realize.  Don't sell yourself short!!! You deserve to be paid because your time is valuable and you are making quality cakes!!!

kazita Posted 7 Dec 2012 , 1:53am
post #9 of

AI posted a thread on here a few months back saying how I didn't want to be known as the cheap cake lady it got quite the response . Without going into the whole long story I got taken advantaged of by a lady who's sob story was how she couldn't afford the cake but it was for her daughters 16 th birthday . I ended up making 3, 8 inch cakes and putting them on a stand , plus she wanted 30 cupcakes in two different flavors. Plus I delivered and set them up. I lost so much money on the deal it was crazy and than she had the nerve to call me and ask me to come get my cake stand, she was to lazy to bring it back tome anyways I found out the hard way to stick to a set price per slice if they want a fancy cake that they can't get from walmart than they need to pay for a specialty cake

OHMYSWEETNESS Posted 7 Dec 2012 , 1:56am

She wouldn't go to Giant Eagle and try to bargain. when I started baking and selling I would just tell them pay when I deliver the cake. The last cake I made I got paid a week later. Now I ask for half up front and I don't deliver anymore. We may not be professionals but our time is money too. And she never would have gotten a deal like that at any Bakery. not even walmart. LOL icon_smile.gif

Ducky316 Posted 7 Dec 2012 , 2:50am

All of you brought up very valid points, and some I've never thought of..like the kitchen clean up for instance! I guess I need to really sit down and REALLY figure my cost before selling another cake...

 

Thank you everyone!!!icon_biggrin.gif

KoryAK Posted 7 Dec 2012 , 4:18am

The pp's have touched on the fact that you aren't charging enough in the first place so I won't go into that.

 

I do think it's absolutely reasonable for her to ask for a lower price for a smaller and simpler cake.  Plenty of customers would have just plain asked for a discount or the same decor on a smaller cake (which would be the same amount of work, really).  She knows what her budget is and she's willing to make compromises to get one of your yummy cakes to fit into that.  Sounds like a win-win to me!

Apti Posted 7 Dec 2012 , 6:05am

OP~~There is a software program called CakeBoss that is highly regarded by many decorators who sell cakes.

On the site there are two superb articles that may prove helpful:

 

"How Much Should I Charge for My Cakes?"

https://www.cakeboss.com/PricingGuideline.aspx

 

"Top Mistakes Made by New Cake Businesses"

https://www.cakeboss.com/TopMistakes.aspx

tabathaba Posted 7 Dec 2012 , 11:24am

I would also recommend coming up with a minimum order to protect your time. No $20 orders, that's not worth your weekend.

howsweet Posted 11 Dec 2012 , 7:02am

With the new cottage food laws, lots of ladies baking cakes are undercharging. If they have hopes of one day owning a storefront, they are shooting themselves in the foot by driving prices down.

 

If you simply decide a wage per hour that you want to make and add your costs to that, you become a cake making service, not a cake business. A cake business considers what it costs to pay employees to make a cake and then make a profit on top of that.

 

Your target market is not people who want to pay $40 for a grocery store cake. Nor is it people who want to have a cake lady who makes awesome cakes for really cheap.  Nor is it a person who wants you to charge less because there will be lots of people at her party and, "surely it will drum up business for you".

 

I don't know what level of work you do, but my cakes tend to run between $6.50 and $10 per serving after the artwork is added. I have a minimum order of $150. There will always be people who want to bargain with us.  I had a lady literally start yelling at me on the phone a few months ago when she heard my prices.  I just stayed calm and as polite as I could manage. You have to toughen yourself up a bit, and believe me it will come either by a conscious decision or the school of hard knocks - you're a business woman now...this is not about how sweet you can be. Don't be afraid to let people walk away mad - it's them, not you.

costumeczar Posted 11 Dec 2012 , 11:36am
Quote:
Originally Posted by howsweet 

 

  Nor is it a person who wants you to charge less because there will be lots of people at her party and, "surely it will drum up business for you".

 

Oh, that's my favorite. I had one bride email an amazingly bold letter where she offered to allow me to make her a free wedding cake for the "very important" people who would be at the reception. I'm going to link to it because I can't even start to describe how crazy it was. The point here is that you will NEVER get business from this kind of thing, it will only get you calls from more people who want a low cost or free cake because it will get you more publicity. As a business owner you should donate to causes that you personally support, but don't fall prey to every request that comes your way. Giving away free cakes generally gets you nothing in the way of more business. http://acaketorememberva.blogspot.com/2011/12/my-belated-christmas-gift-to-youan.html

BakingIrene Posted 11 Dec 2012 , 2:33pm
Quote:
Originally Posted by costumeczar 

Oh, that's my favorite. I had one bride email an amazingly bold letter where she offered to allow me to make her a free wedding cake for the "very important" people who would be at the reception. I'm going to link to it because I can't even start to describe how crazy it was.  http://acaketorememberva.blogspot.com/2011/12/my-belated-christmas-gift-to-youan.html

 

I am familiar with the idea that godparents may volunteer sponsorship of stuff like a dress or the cake or flowers...but this crass commercial stunt disguised as a wedding really takes the cake...

kikiandkyle Posted 11 Dec 2012 , 3:40pm

AWait - Star Jones got married again?

Apti Posted 11 Dec 2012 , 6:06pm
Quote:
Originally Posted by howsweet 

With the new cottage food laws, lots of ladies baking cakes are undercharging. If they have hopes of one day owning a storefront, they are shooting themselves in the foot by driving prices down.

 

If you simply decide a wage per hour that you want to make and add your costs to that, you become a cake making service, not a cake business. A cake business considers what it costs to pay employees to make a cake and then make a profit on top of that.

 

Your target market is not people who want to pay $40 for a grocery store cake. Nor is it people who want to have a cake lady who makes awesome cakes for really cheap.  Nor is it a person who wants you to charge less because there will be lots of people at her party and, "surely it will drum up business for you".

 

I don't know what level of work you do, but my cakes tend to run between $6.50 and $10 per serving after the artwork is added. I have a minimum order of $150. There will always be people who want to bargain with us.  I had a lady literally start yelling at me on the phone a few months ago when she heard my prices.  I just stayed calm and as polite as I could manage. You have to toughen yourself up a bit, and believe me it will come either by a conscious decision or the school of hard knocks - you're a business woman now...this is not about how sweet you can be. Don't be afraid to let people walk away mad - it's them, not you.


WELL SAID!!!!

Norasmom Posted 11 Dec 2012 , 6:27pm

I agree--you charged too little.  Lesson learned.  I turned down a customer a few months ago because she thought I was too expensive.  I was "sugar sweet" when I turned her down  (no pun intended..icon_biggrin.gif,)  but I knew I couldn't do what she wanted for her price.   It's just me, I can't mass produce, it takes a long time to make an 

 

awesome cake, and we're worth what we charge!!

OHMYSWEETNESS Posted 13 Dec 2012 , 12:37am

WOW HowSweet

 

You couldn't have said that any better, you made me rethink some things as far as cost. I've always said "well I'm not a professional baker" so I never charged alot but my prices will definitely go up now.  A lady approached me about making a Sweet 16 three tiered topsy turvy cake for Feb. and I was struggling with the price. I tried downloading the openoffice software but once it downloaded I couldn't pull it up. maybe I'll try Cake Boss.

ellavanilla Posted 13 Dec 2012 , 1:22am

I have also instituted a base rate for tiered cakes, because they just don't make me any money under a certain price point.

 

Regarding Costumeczar's outrageous letter, this looks like one of the new 419 scams that has emerged in the last few years. I did receive an email like this when I first incorporated. The poor grammar and spelling is a dead giveaway that it's a scam. Beware bakers. They think you're gullible because you're a small business. 

 

Jen

jfoster Posted 13 Dec 2012 , 3:19am

I bought a software called "cake boss".  It makes everything so much easier.  you load your ingredients and supplies, choose how much you want to make per hour and it calculates everything for you.  It pulls your pricing for your ingredients and supplies, calculates the per slice price and boom you have it.  It does everything for you. Add your recipes, keeps track of your orders, EVERYTHING.  It saved me. I was in the same boat as you, always undercharging for my cakes then when I got the software, wow, did it open my eyes.

costumeczar Posted 13 Dec 2012 , 4:20am
Quote:
Originally Posted by ellavanilla 

I have also instituted a base rate for tiered cakes, because they just don't make me any money under a certain price point.

 

Regarding Costumeczar's outrageous letter, this looks like one of the new 419 scams that has emerged in the last few years. I did receive an email like this when I first incorporated. The poor grammar and spelling is a dead giveaway that it's a scam. Beware bakers. They think you're gullible because you're a small business. 

 

Jen

Oh, this was no scam. A bunch of my friends also got the letter, it was handwritten and stamped and mailed locally. A quick facebook search found the bride and verified that she was indeed getting married where she said. The best part was that the bride is a professor at a local community college. So she should know better.

Apti Posted 13 Dec 2012 , 10:05pm
Quote:
Originally Posted by costumeczar 

Oh, this was no scam. A bunch of my friends also got the letter, it was handwritten and stamped and mailed locally. A quick facebook search found the bride and verified that she was indeed getting married where she said. The best part was that the bride is a professor at a local community college. So she should know better.


You have got to be kidding........  And she is teaching the upcoming generation of citizens.....scary.

BakingIrene Posted 13 Dec 2012 , 10:48pm
Quote:
Originally Posted by costumeczar 

Oh, that's my favorite. I had one bride email an amazingly bold letter where she offered to allow me to make her a free wedding cake for the "very important" people who would be at the reception. I'm going to link to it because I can't even start to describe how crazy it was.

 

It gets worse.  I had this horrible memory buzzing in my head all day after reading about this brazen and shameless letter. Finally had a chance to google "get your wedding for free" and guess what comes up:

 

http://www.ehow.com/how_2078259_have-free-wedding.html and don't read the related links because they will all make you gag.

 

NO this was not a scam.  It was some person with too much time on their hands looking online for free stuff.

costumeczar Posted 13 Dec 2012 , 11:20pm
Quote:
Originally Posted by BakingIrene 

It gets worse.  I had this horrible memory buzzing in my head all day after reading about this brazen and shameless letter. Finally had a chance to google "get your wedding for free" and guess what comes up:

 

http://www.ehow.com/how_2078259_have-free-wedding.html and don't read the related links because they will all make you gag.

 

NO this was not a scam.  It was some person with too much time on their hands looking online for free stuff.

HAHAHAHAHAHAHA! What a ridiculous piece of "journalism." I'd choose a favorite piece of advice but they're all so excellent...I'm posting this on my facebook page, it's hilarious, thanks for sharing the link!

Apti Posted 15 Dec 2012 , 1:30am

The funniest part of your link is that it was written in 2008 when people had money!   Just so we cakers don't think that the poor wedding cake bakers are the only target for these cheapo's, let's propose this advice and let brides suggest this to their dearest and most precious friends who will be standing up with them on their wedding day.  (With the substantial savings on the free centerpieces, they should be able to afford a cake!)

 

How to Get Free Wedding Centerpieces

"Opt to do away with other event extras such as making your bridesmaids pay a high amount for a dress they won't wear again. Ask if they would be willing to chip in to buy or help make the centerpieces. Offer to allow them to wear appropriate dresses of their choice in complementary colors, instead of buying matching bridesmaids gowns. Let them know they can also save their dollars on a big bachelorette bash or any other expensive bridal party plans."

 
Hello, Dearest Best Friend of My Life. 
 
I want free centerpieces for my wedding banquet so I'm going to ask you, my Maid of Honor, and all other bridesmaids who didn't make the cut to get to be Maid of Honor, to each give me... err...."chip in",  the $200 you were going to spend on a dorky wedding dress that you probably wouldn't look good in anyway.  (Those hips and flat chest, ya know?) I'm going to buy some centerpieces with that money.
 
Oh, and by the way....  If you could each give me... err..... "chip in",  an extra $100 (that would be $300 total) instead of throwing the big bacholerette party you've all been planning for years? 
 
Now, of course, my husband-to-be and I will still expect a wedding gift AND a lot of free labor placing those centerpieces and having them delivered to our new home after the event (since we'll be on our honeymoon).   Don't worry about the centerpieces staying fresh.  I've decided I can now afford high-end silk flowers.
 
And the last thing, don't feel like you have to buy a brand new dress in a complementary wedding color (floor length, mauve with white trim on 3/4 length sleeves) for the wedding ceremony.  Just wear any old thing you already own that is mauve with white trim, floor length, with 3/4 length sleeves.  Wouldn't want you to incur any unnecessary expenses for MY wedding.
itsacake Posted 15 Dec 2012 , 8:57pm

I have to agree with howsweet.  For the past 10 days, I have been producing a holiday product that is in such high demand that I have been turning away customers every day.  In order to meet the price of others producing the same product in this area, I sold it at the price I thought was a little low, but workable.  Turns out I collected about $1300.00 and my expenses for ingredients and boxes etc. were only somewhere between $300.00 and $400.00.  Many of you will consider that a nice profit.  However, I worked more than 90 hours (much of it in the wee hours of the morning in order to have a fresh yeasted product by day).  I had to draft my husband for an additional 20 hours, and a girlfriend for another 3.5.  If I totally disregard overhead--like having to heat the commercial kitchen in the middle of the night so dough would rise and we wouldn't have to work in the cold; plus insurance, licensing, service agreements, rent, etc it comes out to about $8.33 an hour or just under minimum wage in this area.  And it is actually worse than that. As this was the first year making this product, I failed to realize the amount of parchment paper, paper towels, and doilies that got used, so the "wage," in reality is even lower.  Not to mention that the quality of life this week was abysmal with a cranky husband and processed food we could just heat up when I got home late at night instead of having time to cook dinner, make beds, do the laundry, etc.  Hubby's billable rate is usually over $150.00/hour, think he was amused in the middle of the night working for free at a calculated rate effectively less than $8.00/hour?  

 

This is definitely NOT my business model. I actually commented to a colleague that I wasn't in the business to be a public service.  Her thinking is that she IS providing a seasonal product more or less as a public service.  Therefore, despite the laws of supply and demand, which would indicate that one can get a reasonable price for the product, the price is artificially low and demand is through the roof.   I should have calculated this into the equation and stayed out of the market or done some marketing differentiating my version of the product so as to justify a higher price.

 

If I enter the fray next year (and that is in a lot of doubt right now), It will have to be much more worth my while. After the first day, I spent the week feeling like I was losing money on every piece I sold (and making it up in volume, as they sayouch.gif)   Who needs that?!  

 

The best I can say of the experience is that I learned a lot.  Next week back to working on a extended marketing plan which more closely follows my business model.   Turns out that just because there is a demand for a product, it doesn't mean that I have to fill it if it doesn't fit the model.   Pricing needs to take into account a myriad of factors and cost of ingredients is the easiest piece, but the least of it.  A truly rookie mistake!!!  Ugh...

howsweet Posted 17 Dec 2012 , 1:17am

That's a pretty interesting assessment, Itsacake!  If we all approached the cake business with some cold hard analysis,  I have a feeling we'd all be better off.  It has taken me a while to reach my target customer, but still I'd say I only get about one customer per six inquiries. That means for each cake I do,  five people either decided they can't afford a high end cake like I make OR they found someone to do it for less. I pity the person doing it for less because I work fast as heck and even with my prices, I still feel underpaid.
 

Quote by @%username% on %date%

%body%