I am a self taught cake designer making special occasion cakes from my home.  When people ask me how much I would charge for a cake before figuring out the number of servings and what all would go into actually making what they are asking for, I always tell them that my cakes will cost more than the grocery store cookie cutter cakes and less than an upscale bakery.  I always strive for a good tasting cake as well as pretty to look at.  Why bother doing this if the cake doesn't taste good, right?  I am very conscientious about how much I charge for anything I make, often undercharging myself. My problem is that people are wanting the specialty cakes at grocery store prices.  I had a lady call me and ask how much to make 250 cupcakes, for her daughters wedding.  I quoted her $300 for 250 cupcakes simply frosted; the price of supplies and boxes to transport them. Making them a whopping $1.20 ea.!!  She turned me down for Walmart. Another sent me a pic of a really cute stacked (8", 6" x 4" and small half ball pan) pirate cake using a lot of fondant work.  She turned me down when I quoted her $150.  Another is insistent that I make her grand children's birthday cakes next month, and she wants them to be "special", but she doesn't want to pay more than $40!!  As a rule of thumb, trying to be fair to both myself and the customer, I usually take the cost of my supplies and double it for the price of my cakes. It doesn't always equal out fairly for myself.  If anyone is going to benefit from the deal it's always my customer. I've found that I get more business when I am actually making cakes and post or share the pictures. Then other people see my cakes and ask if I would make them one for their special occasion. Knowing this, I have done a few cakes for the cost of supplies just so that I can share what I am doing in order to inspire others to order a cake from me. 

Like so many others, I'm doing this as a way to earn a little extra money from home. I would like to be busier than I am but I can't get people to understand what it is they are asking of me when they request a specialty cake. I simply can not beat the prices of Walmart or other grocery stores. But I do guarantee a better tasting cake as well as a custom design. I've had many people comment that I am not just making a cake but rather an edible work of art. And that is exactly what we are doing.  Just how in the world to get that across to people when they are asking me to make a custom cake?!  I'm trying very hard not to take these things personally, but it is really difficult.

AThat is so true why would you not want a beautiful and tasty cake , I'd pay any price for those cakes Your prices are well put and figured out people needed to be respectful and pay it because they have to be good You have the time of work and the price of the supplies needed to do that cake

As a rule of thumb for not complicated cakes, you should be looking at 3 x your outlay (ie ingredients, boards, boxes) to charge.

I charge a LOT, LOT more than supermarkets for my cakes.  But then, I know that supermarket cake customers were never going to be my cake customers, anyway.

Believe me, it WILL get easier, but you need to say to that grandma that for $40 she can have X cake.  If she wants Y cake, then these start at $<insert your figure here>
 

Suzanne x

AFor a custom product it is impossible to set accurate prices if you rely on the cost of ingredients and supplies alone, whether it's 2x, 3x, or 10x. You must take into account labor (the number of hours required to complete the order from start to finish multiplied by your hourly wage) and overhead (license fees, insurance, etc. on a per-order basis).

If you charge what your products are worth and start targeting customers who are willing to pay for quality you will be less frustrated.

I hear you and I can say the same things, exactly!! People want me to beat the Wal-Mart pricing. I'm totally struggling!!!!!!!!

I understand doing cakes and showing them does attract more business. Instead of under selling them make dummy cakes and photograph them for your portfolio and your personal learning experience.

If you want to practice baking real cakes, donate them to places. Like just drop by your hair stylist and give her a free cake (and some business cards). Let the hard working under paid people of the world get your treats. They'll love you and in time their appreciation comes back to you when you need their services.

They'll do more good for your business then what you'll get back from that customer you under charged will. That cheap customer only gives you more people like her.......

You need to seek out a demographic willing to pay your prices.  Most people in my town are what my husband calls "sheetcake" people, but people in the next town over (slightly wealthier), people have no problem with my pricing.  I tell everyone that my cake prices tend to range in the $3-$4 per serving category, less for cupcakes.   I don't even market in my town.  

I think your prices are too low. I checked some bakeshop in your area and one is priced $2.50 for a cupcake with a simple cut out fondant flower. The other is charging $3.00+ per serving of cake, not covered in fondant and just chocolate shavings on top. People who wants Walmart/grocery prices are not your target market.

Hang in there and keep your focus on what YOU offer and not what the local grocery offers. Remember that everyone's needs are different, and there is little you can do to change it. What you have to do is find the people who need what you make! 

I find that being sure about my point of view is important so that I can express it to my clients and then they become my best advertising. I was dropping off some cupcakes for a friend's party on Saturday and overheard one of their friends say, "Better than Crumbs" about my work. So that can happen. Just stick with it!

Try to remind yourself that price is important, but it's not the only important thing. 

I had someone question my price in the daycare today (my other job) and I simply pointed out what I offer that the others don't.  Between us, if I can't get my rate, I can't stay open. That's the fact. So don't beat yourself up!

Good luck,

Jen

When you sell your cakes as cheaply as you are, your cheap customers tell their cheap friends and then they expect a cheap cake from you. 

Stop giving away your cakes, even if you only get one order all month but it gives you the same profit as you previously earned for the whole month prior then you're only ever going to come out on top. Don't confuse being 'busy' with being profitable. 

A

AThe hard part is first determining your target audience and then finding them.

As long as you continue to meet the low price, you will continue to attract the same kind clients. As Kiky&Kyle said, they send their cheap friends.

It still happens to all of us, we just try to educate the clients who don know.

I appreciate every constructive comment. Wish we had a "Thumbs Up" or a "Like" button.

Kikiandkyle: I totally agree. I Have more fun making 1 $400 wedding cake than I do making a 4 $100 cakes any day!

I'm not wanting to focus on quantity but rather quality and profitability. And I do serve a quality product which I am very confident and proud of. And I do let prospective clients know that. I do depend on a lot of word of mouth to spread the word. Guess it's time to find better mouths to spread the word for me.  lol 
 

Thank you all.

This ^^^^ was on the internet the other day posted by someone on facebook. It is so true! Hang in there and stick to your guns.

I really like the saying I've seen on here so many times: "You can get A cake for $40, but you can't get THIS cake for $40."  Set a minimum amount that will make it worth your time to even turn on your oven.

Where I work, we have one birthday celebration every month for whoever has a birthday during that month.  And every month, the other lady in the office buys cakes from the grocery store.  She knows very well that I do cakes, but she's never asked me to make any and I've never volunteered.  We both know that the company isn't going to fork over what I would charge.  So everybody eats grocery store cake and thinks it's great.  It doesn't bother me in the least because I know my cakes are worth more than the $30 she spends.  My fellow employees are NOT my target market.

I have the same problems, but when I read everyone comment it make me think twice.  I rather make 1 cake for $300 then make 3 cake for $100 (if I even charge that much). I live in a small town and everyone want a $30 cake, I try it for a while just want to take more pictures of my creations, but just cant do it any more. Some time I'll be up all night making a $60 cake and I think to myself "what the hack I'm doing right now, why I always in myself in this situation".   

Once I get someone to actually taste one of my cakes (be it at someone's birthday or one of the MANY cakes I take to work as a test of new recipes)  they suddenly see the difference between my cakes and a grocery store cake.  Not just the cake itself (fresh, never frozen, quality ingredients) but the icing I use (Collette Peters' Meringue Buttercream is my basic), fillings and even the fondant (Satin Ice usually)-- then they start to understand why it's worth more to pay for custom baking.  After I clear that hurdle, the idea of paying more for the decorating is pretty easy.  The taste is what sells them and that's how I market myself.  If someone isn't willing to pay what my baking is worth, I don't want them as a customer. 

I too, have been approached to make cakes for people who get my name from various friends of mine. I have made shower, birthday and wedding cakes occassionally for a few friends over the years, purely as gifts for the party, I am not compensated in any way. With that said, these same well meaning friends give my name out to party attendees who love the cake and want me to make one for their gathering. I CRINGE when I occassionally get those calls, because #1, I made a cool cake for my galpal as a gift, not as advertisement. #2, the friends of friends are very often looking for dirt cheap cake that looks amazing, thinking that since I'm just some girl who decorated a cake in her kitchen, whatever I may charge will surely be less than a commercial establishment. #3, I recently got a call from a friend who wanted to know what I would charge for a copywrited character themed cake, I declined and was expecially glad I did after she went on to tell me that they had called a home caker in my area and that person wanted a whole 60 bucks. I thought that price was MORE than reasonable when they described what sort of cake they wanted, but these gals were still in sticker shock..and called me with the assumption that I'd be even cheaper than that. I used to feel guilty to say no all the time, but I don't now. I'd much prefer to spend my time practicing sugar flowers or getting buttercream smooth and just be proud that I improve everytime I practice. Saying no to people is so difficult for me, I'm sure it is for most people, but I can imagine that if you get burned by underpricing your own talents one too many times, you won't have a problem saying no for much longer. Best of luck to you!!!

The sad truth is most people have no idea what it takes to actually cook and in general food is not something they see themselves shelling out money for.  When I first started cooking for people (family & friends) I took it personal tried to adjust my prices to be "fair" to me and them usually with me being short changed and it still not being good enough out of frustration I quit.

Now I realize people will pay for what they value, the same people who won't pay over $40 for a "special" cake will pay $300-$500 for a purse, or pair of shoes because they've been told its worth it. 

Set your own value and never deviate from that, because that is what your product is worth. You may not get as many orders at first, but they will come and when they do it'll be from people who value what you do and are willing to pay for it.  

APeople genuinely have no idea how much a custom cake costs. Your pricing has to be your pricing, but for the OP you're definitely pricing too low. I wrote a blog post about this that went up yesterday...don't take it personally, not every one can afford a custom cake the same way that not everyone can afford a Porsche. I don't see Porsche dealerships lowering their prices to "be fair" to people...

My oldest daughter recently called me asking for cake making tips. She was in the kitchen thinking she could help a friend save some money and "do what mom does". This coming from the one daughter who has never stayed in the kitchen long enough to watch me do any cake decorating. I never got to see their end product, but my daughter did comment a day later that she had spent 9 hours in the kitchen and had done most of the fondant work and then exclaimed that it was a pain in the rear! lol  All I say was welcome to my world. Now she knows ca little more of what goes into making a custom cake.

People really have no idea what goes into these edible works of art. When I first started I would post pictures from start to finish on my Facebook page for people to see the development of a cake. They found it fascinating and would love the end result but many of them still want grocery store prices. lol I am learning to not take it personally. No, not everyone can afford custom cake prices. I tell people that they would only purchase a cake from me for something they wanted to make extra special; these cakes are not average everyday cakes.

It's nice to talk to others who have gone through or are going through the same frustrations that I am. I don't want to get to where I'm producing 20 cakes per week every week. But I do want to make more than one every couple of months. lol And I would love to practice more, but can't afford to make something to throw away either. However, I had just commented to my husband the other day that there are cake flavors I want to try and experiment with, and that I would take them out to share with our friends to see how they like the different flavors. And hopefully drum up some business while I'm at it.
 

I'm a hobbyist, so I don't have customers to deal with, but I still found this post (by CC member jenmat) to be a great read: http://cakecentral.com/t/714674/why-im-happier-now-a-lesson-in-reality

In it she writes..."I knew I had underpriced myself and been incredibly lazy in the process. Not only is it lazy to not do your homework with pricing, it is lazy to undervalue yourself. We say its because of confidence issues or people just don't want to pay our prices, but it is also soo much easier to not have to sell yourself. When you underprice, you will get every customer, and you don't have to "do" much to get those people. They know they're getting a good deal, you don't have to sell them on your product".

(Click the link to read her entire post)

Thanks for posting that link. I enjoyed reading it! I need to vent for a minutes (hope it's o.k.).

I have a current customer who approached me because they wanted something "special" for a bridal shower they're having at the country club. She kept insisting we have a meeting to talk cake. I finally got the nerve up to tell her it wasn't necessary (she wasn't happy about that). Then she wanted me to give her a million different ideas including an umbrella theme for the cake. Again, I got tough and directed her to where SHE could spend hours searching (and leave me out of wasting time) for ideas. Then she asked for quotes on 4 cakes she picked out. I priced out the additional costs of sugar flowers as 'in addition to the cake'. I was thinking I'd educate her on what it takes to make those sugar flowers and let her price out real flowers if she wanted to. Then she came back to me with 2 more cake photos asking what those cost (I knew she was searching for cheaper because the cakes looked just like other ones she picked out). I did the same thing, pricing out the flowers as extras.....and this time I priced everything exactly where the other cakes prices were, not one penny different.

 Next email from her was she was deciding between the two cheapest cakes............OF COURSE! I want to ask her what about that "special" cake? How about there's 4 women paying for this $135.00 cake! (The cake is for 30 people, which we all know here, is still a dirt cheap price!! But these darn people don't want to pay for cake!)

Now she wants to meet with me to give me a color sample and wants me to offer her suggestions of what colors would look good with her color. I blew that off too and told her to go to The Perfect Palate and let me know which colors she wants.

I finally lead the end of the conversation and asked her if she wanted a chocolate or vanilla cake or if she wanted a Premium cake flavor. HA! Nipped that in the bud......... Then I mentioned if she paid me in advance I'd give her free delivery. If not, there's a fee for delivery and I'd only accept cash when I delivered the cake.

Now it's the great silence.............I'm waiting for her next reaction.

SOOOOOOO the point to posting this is..............is this what you all do? Just tell them the facts and let it be a take it or leave it thing. Whew........It's hard to be tough..............kind of fun.........but hard

To Stitches:

LOL I have to tell you that I had customer nit pick me like this a couple of years ago. She wanted something extra special for her son's birthday but didn't want to "pay" for it. I finally got really ticked off at her nit picking and penny pinching and laid out EXACTLY what all went into making the cake she was asking for. Needless to say I lost a customer that day with the comment "...that was totally unnecessary...". But losing that one customer lost me a major pain in my backside and so worth it.Not to mention he sons birthday fell the same time as my grand daughter's birthday taking time away from the cakes I wanted to make her.  I know that the same customer attempted to make her own specialty cake after that, thinking she could save herself money. She found out why I charge what I do for that specialty cake. No great loss.

Since we are here and discussing this. Do you all find it better to price by the slice or by the job?? Which benefits you more? I recently calculated and broke down the cost of a cupcake and found that with just the cake and frosting, that I can not make cupcakes for less than $2.50 each not counting fondant work or special wrappers even. I haven't calculated the cost of slice for a basic cake yet.

AHow you price depends on the product. For wedding cakes (usually multi-tier) customers are used to a per-serving price, so that's how we price wedding cakes. For single-tier birthday cakes a flat price for the cake is more common, so each size of round cake has its own flat starting price.

From there, the quote/invoice will break down the price of each component of the cake: the starting price of the cake itself, adding fondant, a custom design, etc.

If I am approached by a customer about placing an order, I will hand them a business card and tell them to fill out the order form on our web site, which guides the customer to provide as much relevant info as possible. Sometimes the email thread will still go back and forth a few times, that's a standard cost of doing business (which can be built into your prices).

AStitches we live in the same neck of the woods so I know I don't need to tell you what it costs to be a member at these country clubs, and yet they're trying to save $5 on cake. Cheapskates.

I price by the cake, here are a couple of reasons why: http://acaketorememberva.blogspot.com/2009/11/how-i-price-my-wedding-cakes.html

http://acaketorememberva.blogspot.com/2013/02/tell-me-about-those-serving-sizes-again.html

Oops sorry, back to the question at hand. I used to price by the cake and people would always take advantage of that and feed 100 people out of a 50 person cake. Making my product look skimpy. Now I charge by the person for every single cake. Then I add on the decorations as extras. I'm fine selling a naked cake....I don't care if I decorate it or they do.

Here's the things I'm focusing on FINALLY. I shopped yesterday at my locally privately owned grocery store and they are pricing cakes at $2.00 pp whether it's a baby cake or a wedding cake (and it's the worst of the worst stuff you can imagine). Heck, I start my prices on my scratch baked cakes with real butter cream frosting at $3.00 p.p. If clients can't understand the dollar more I ask for I sooooo don't want them!

Plus I've realizing the beauty of cupcakes. I can get $2.50 all day from everyone with no decorations, no consults, no custom work. If I can't get over $3.00 per serving I'd so much rather sell them cupcakes! Anyone not familiar with cupcake costs need to evaluate them...they are so easy and profitable they make decorating cakes really hard to want to do.

In the past, I did shop out all the higher end cake options people have all around Chicago and I was pricing based on competition with them, with-out a retail location (so I priced a little lower then them). It was the SHOCK of seeing how much the worst places charge that woke me up! It makes me completely understand how I'm still way too low....and I'm working on how to deal with that.