chickscreations Posted 24 Feb 2013 , 1:21am
post #1 of

I've been in business with my friend for about a year now we started out just doing cake pops and I make cakes for friends and family but lately I have been getting a lot of cake requests so have been doing more and more cakes for clients.  I always have trouble pricing my general rule had been $3 a serving for fondant and $2 a serving for buttercream and adding on for additional large or detailed fondant or gumpaste work.  I just got this email asking me to make a baby shower cake that is butter cream with just blue fondant buttons decorating it.  They want it to serve 40 so with my pricing guidelins it would be $80 am I charging to much not enough??  Heres the pic

 

 

 

 

Any help greatly appreciated this is the hardest part of the business or me I can decorate and bake all day but I hate quoting prices!  I am in Northern California by the way if that makes any difference.

27 replies
jason_kraft Posted 24 Feb 2013 , 1:51am
post #2 of

AHow much would the ingredients cost for this cake, and how long would it take to make? What is your per-order overhead cost (license fees, insurance, etc.)?

chickscreations Posted 24 Feb 2013 , 2:24am
post #3 of

A$35 in ingriedients, 2-3 hours including baking, icing and molding all the buttons out of fondant. Then cake board and box another $5 I work outing my home so minimal overhead licensing ect $200 a year

jason_kraft Posted 24 Feb 2013 , 2:58am
post #4 of

AIf you don't already have business liability insurance I strongly recommend purchasing coverage ASAP. Along with other items you didn't mention (utilities, accounting) this will probably bring your annual overhead up to about $1000, so if (for example) you have one order per week that's $20 in overhead per order. Add $40 in ingredients and supplies and you are at $60.

A price of $80 leaves only $20 for labor and profit. With 3 hours of labor (does that include prep and cleanup?) and a low 15% markup for profit you are paying yourself an hourly wage of $3.33/hour.

Your biggest issue is probably ingredient cost, $35 seems way too high for that cake. If you break out what makes up that $35 figure we may be able to figure out ways to cut that down.

Annabakescakes Posted 24 Feb 2013 , 3:26am
post #5 of
Quote:
Originally Posted by chickscreations 

$35 in ingriedients, 2-3 hours including baking, icing and molding all the buttons out of fondant. Then cake board and box another $5 I work outing my home so minimal overhead licensing ect $200 a year

Are you counting the whole bag of flour, whole box of baking power, and cocoa, and such? because that is  terribly HIGH! If you buy a $4 bag of flour that weighs 5 pounds, you use 2 cups (260 grams) then your cost for the flour is .46¢ If you don't know how I got to that number, then you should seriously wait to start selling cakes until you do.

jason_kraft Posted 24 Feb 2013 , 3:37am
post #6 of

AA simple "make sure to only count the ingredients you used" probably would have sufficed.

Annabakescakes Posted 24 Feb 2013 , 3:41am
post #7 of
Quote:
Originally Posted by jason_kraft 

A simple "make sure to only count the ingredients you used" probably would have sufficed.

Says the man with an EPIC post count, who explains how to price a cake ad nauseum...

 

Mind your own business.

IAmPamCakes Posted 24 Feb 2013 , 4:33am
post #8 of

I would reconsider my pricing per slice. I work out of my home in northern California, too, and have raised my prices to meet the average prices for the area. Not only will I make a bit more money, I don't want to undercut the other businesses in the area. It's just plain unprofessional, and devalues all the work we do. I know I make a great product, and my prices should reflect that, as well.

chickscreations Posted 24 Feb 2013 , 5:30am
post #9 of

I agree with the undercutting and don't want to do that which is why I was asking.  Local business in my area charge $3 a serving for butter cream but I figured I don't have as much overhead as they do and I was posting on my phone sorry guesstimating on cost.  My cost now that I am home with pencil and paper is more like $18 including cream, and all that good stuff, fondant cake board and boxes.  Sorry didn't mean to start an argument I genuinely wanted to know what you would charge.  What is the average cost per serving for a butter cream cake with simple decoration.  I'm used to people asking me for princess castles with fondant figurines and all so it just seemed hard for me to put an $80 price tag on this as simple as it is but maybe I am wrong?  I only do about 4-6 cakes a month but have a ton of cake pop orders so cakes was kind of an extra hadn't really figured in all overhead for the cake part as I already had a pricing system down with the cake pop business.  I do have insurance and work under the cottage foods law now prior I used a commercial kitchen.

 

Thanks

IAmPamCakes Posted 24 Feb 2013 , 6:55am

ASince I don't know exactly where you live, who - if any - competitors there are, it's tough to really say what you should charge. For my town, some people scoff at $3/serving, but it's really what is fair. Even some of the 'real' bakeries have increased minimum prices to $3.50 - 4. I guess it all comes down to what you are comfortable with. Of course, you have to make some money too! :)

IAmPamCakes Posted 24 Feb 2013 , 6:55am

ASince I don't know exactly where you live, who - if any - competitors there are, it's tough to really say what you should charge. For my town, some people scoff at $3/serving, but it's really what is fair. Even some of the 'real' bakeries have increased minimum prices to $3.50 - 4. I guess it all comes down to what you are comfortable with. Of course, you have to make some money too! :)

chickscreations Posted 24 Feb 2013 , 11:26am

AI live in Northern California about 1 hour north of Sacramento. I live in a fairly rural area no bakery in town they would have to go to the next town over which is about 30 minutes. It seems I get requests all the time and about 40% say nevermind once I give them the price they want something for nothing. I have a lot of repeat customers and have had rave reviews from them on my site and facebook page but it seems like a lot of people don't realize what a good cake costs I would be working for nothing if I went with the prices they are wanting

MyThreeCakes Posted 24 Feb 2013 , 12:29pm

For a 12" cake assuming it has buttercream filling as well I would be $115.  They didn't use a mold on that picture for the buttons, it looks like they just used the end of a decorating tip to cut the circles then a smaller to make the inside marks and a toothpick to make the thread holes.  If the client was happy with the way they look it would cut way down on the time to do the embellishments.

Annabakescakes Posted 24 Feb 2013 , 1:00pm

A

Original message sent by chickscreations

I agree with the undercutting and don't want to do that which is why I was asking.  Local business in my area charge $3 a serving for butter cream but I figured I don't have as much overhead as they do and I was posting on my phone sorry guesstimating on cost.  My cost now that I am home with pencil and paper is more like $18 including cream, and all that good stuff, fondant cake board and boxes.  Sorry didn't mean to start an argument I genuinely wanted to know what you would charge.  What is the average cost per serving for a butter cream cake with simple decoration.  I'm used to people asking me for princess castles with fondant figurines and all so it just seemed hard for me to put an $80 price tag on this as simple as it is but maybe I am wrong?  I only do about 4-6 cakes a month but have a ton of cake pop orders so cakes was kind of an extra hadn't really figured in all overhead for the cake part as I already had a pricing system down with the cake pop business.  I do have insurance and work under the cottage foods law now prior I used a commercial kitchen.

Thanks

Sorry Chick :-) we get all sorts of people on here, I am sure you have seen them, that ask how to price a cake, then ask you how to bake it, too! I wasn't sure if you were one, or not, but I am glad you have an understanding of how to get to the actual cost!! $18 seems much more like it, lol!

IAmPamCakes Posted 24 Feb 2013 , 5:49pm

AChick, I think we are in the same town. People can be cheap, but look around. Prices are going up everywhere, & if customers don't want to pay for a great cake, they can go get a cheap cake from Raley's that won't taste or look as good. We have a smaller customer pool here, but there are people who will pay for quality, we just have to find them.

BrandisBaked Posted 24 Feb 2013 , 6:02pm

AI charge $3.50/serving for buttercream cakes w/fondant accents as long as it's a simple design.

jason_kraft Posted 24 Feb 2013 , 7:22pm

A$18 is a more reasonable ingredient cost, and given that OP has additional orders over which to spread fixed overhead her resulting hourly wage should be more in the ballpark with an $80 price.

Annabakescakes Posted 24 Feb 2013 , 7:30pm
Quote:
Originally Posted by jason_kraft 


Not at all, just sharing my opinion about an alternate way of phrasing a reply (mostly due to the last sentence in said reply).

Getting back to the topic, $18 is a more reasonable ingredient cost, and given that OP has additional orders over which to spread fixed overhead her resulting hourly wage should be more in the ballpark with an $80 price.

I think the OP herself would agree that you should not be selling cakes if you have no clue how to price them, down to how to figure out how much each ingredient costs. It wasn't rude, it wasn't even to "just share an opinion", it is a fact.

 

And $80 for a 40 serving cake is pretty low. Almost ridiculous. My base price for buttercream is $2.75, going up to $3.50, as soon as I feel like messing with my website again.

jason_kraft Posted 24 Feb 2013 , 7:36pm

ALooking at the numbers, $18 ingredients/supplies + $10 overhead leaves $52 for labor and profit. With a wage of $12/hour the cost is $64, and a 25% markup hits the $80 price point. For rural CA those numbers look pretty good.

Annabakescakes Posted 24 Feb 2013 , 7:44pm
Quote:
Originally Posted by Annabakescakes 

Are you counting the whole bag of flour, whole box of baking power, and cocoa, and such? because that is  terribly HIGH! If you buy a $4 bag of flour that weighs 5 pounds, you use 2 cups (260 grams) then your cost for the flour is .46¢ If you don't know how I got to that number, then you should seriously wait to start selling cakes until you do.

 

Quote:
Originally Posted by jason_kraft 

A simple "make sure to only count the ingredients you used" probably would have sufficed.

 

Quote:
Originally Posted by Annabakescakes 

Says the man with an EPIC post count, who explains how to price a cake ad nauseum...

 

Mind your own business.

Quote:

Originally Posted by BrandisBaked 




Are we telling others how to post? I think that's a little off topic and rude.

On topic: I charge $3.50/serving for buttercream cakes w/fondant accents as long as it's a simple design.
Quote:
Originally Posted by jason_kraft 


Not at all, just sharing my opinion about an alternate way of phrasing a reply (mostly due to the last sentence in said reply).

Getting back to the topic, $18 is a more reasonable ingredient cost, and given that OP has additional orders over which to spread fixed overhead her resulting hourly wage should be more in the ballpark with an $80 price.

I am still just flabbergasted and gob smacked that you found a moment to condescend about my post. I reread it and there was nothing rude about it. I obviously took the time to price out an example and everything. Plus, I was on my phone, so that is no small task. The $30 was high, so what I did was a valid example. Leave me alone, It is not funny, or cute, and I don't appreciate. And if you send me a PM again, saying how the only way you will leave me alone is if I quit posting, I swear I will find a way to make your life miserable, if I have to learn voodoo and sew up a little Jason doll. I am a stay at home mom, I got nothing but time.

jason_kraft Posted 24 Feb 2013 , 7:47pm

APlease try to stick to the topic, if you have something personal to say it is probably better off sent via PM (as I probably should have done in my original reply to you). Thanks!

Annabakescakes Posted 24 Feb 2013 , 9:13pm
I do start most of my buttercream akes at my starting price, but if it is just too easy, then I will dip below my starting price by about a quarter or so. But the buttons will raise that price right back up! I will only do it if it is plain.

 

Not a 1/4 but a quarter, lol. 25 cents, per.

Izzy Sweet Posted 24 Feb 2013 , 9:19pm

I am still just flabbergasted and gob smacked that you found a moment to condescend about my post. I reread it and there was nothing rude about it. I obviously took the time to price out an example and everything. Plus, I was on my phone, so that is no small task. The $30 was high, so what I did was a valid example. Leave me alone, It is not funny, or cute, and I don't appreciate. And if you send me a PM again, saying how the only way you will leave me alone is if I quit posting, I swear I will find a way to make your life miserable, if I have to learn voodoo and sew up a little Jason doll. I am a stay at home mom, I got nothing but time.

I am pissing myself laughing right now... I was kinda in a blah mood not so much now.. comedy , thank you for this.

Annabakescakes Posted 24 Feb 2013 , 9:22pm
Quote:Originally Posted by Izzy Sweet 

I am pissing myself laughing right now... I was kinda in a blah mood not so much now.. comedy , thank you for this.

Quote:
Originally Posted by jason_kraft 

Please try to stick to the topic, if you have something personal to say it is probably better off sent via PM...

 

LOL, just kidding!

BrandisBaked Posted 24 Feb 2013 , 9:35pm

AI don't mean to get off topic, but I have seen Jason push people's buttons and then get them banned for responding. Be careful what you say. :-)

Annabakescakes Posted 24 Feb 2013 , 9:43pm

I see you are in Boise, my aunt lives in Mountain Home, does all her shopping in Boise.

SystemMod2 Posted 24 Feb 2013 , 10:28pm

Please refrain from personal attacks on other members in the forums.

 

This type of behaviour is not permitted under the Cake Central forum guidelines, and unfortunately will result in threads needing to be edited, as I have done above, in order to remove all offending comments.

 

If you have a problem with a member on CC, we respectfully ask that you take it off site, or at least use the PM function.

 

Thank you.

chickscreations Posted 25 Feb 2013 , 12:46am

Thank you everyone for your help.  I quoted her a price of $80 and she said thank you for getting right back to me but I am going to have to pass for now!  Ugh they all want to get something for nothing guess they will be hitting up costco:)  I appreciate all of the helpful responses its nice to know other people realize cakes actually have a value and a lot of work go into them.

 

Thanks

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