vgcea Posted 3 Jun 2013 , 1:26am
post #1 of

ARecently I had 2 clients who wanted sugar flowers/toppers on their cakes but couldn't understand why a "simple" flower/figurine would cost so much. In both cases I recommended they check out Etsy and see about buying it themselves (in neither case was I inclined to make those items, just wouldn't be worth it). In both cases, the individuals 'got it' as they didn't know that those labor intensive "Simple" toppers could go for $35-$45 before you even start to talk about the base price for the cake.

I've seen facebook posts discussing this issue trying to educate clients about custom cakes and prices, and since pricing is a hot topic these days, I figured we could discuss ways you educate customers so they 'get it' that custom cakes aren't cheap.

26 replies
LKing12 Posted 3 Jun 2013 , 2:19am
post #2 of

I give them my cost and I don't explain.  No one explains why something costs what it cost.  You pay for quality or do without.

jason_kraft Posted 3 Jun 2013 , 2:22am
post #3 of

AUsually breaking down the labor cost is enough to get people to understand...once they realize that their cake will take 20 hours to make instead of 2 hours they are either OK with the price or start scaling things down.

jason_kraft Posted 3 Jun 2013 , 2:30am
post #4 of

A

Original message sent by LKing12

I give them my cost and I don't explain.  No one explains why something costs what it cost.  You pay for quality or do without.

Whenever I work with a contractor that creates a custom product I always ask for an itemized breakdown of costs. Every single reputable contractor I've ended up working with has had no problem with this (anyone who could not do this did not get my business). I used to do the same thing when quoting IT services to customers. And when I sent invoices or quotes to my bakery customers I would break the price down by high-level design element.

btrsktch Posted 3 Jun 2013 , 3:46am
post #5 of
Quote:
Originally Posted by LKing12 

I give them my cost and I don't explain.  No one explains why something costs what it cost.  You pay for quality or do without.


Yea, I don't quite agree with this statement either.  A little education can go a long way, especially to those in areas who really don't know, instead of just not getting it.  I've had some - not alot, but some who have come back to place an order once they understood pricing.

 

I typically use McDonald's as my analogy.  I say if you pay $1.00 (plus tax!) for frozen french fries dropped in 5 day oil, and you serve it to 100 people for that one task.  That is gonna cost you $100.  Now, I have to get the ingredients, mix, bake, ice and decorate a cake. If I charge the same $1.00 per person as McDonalds for each task, etc.

Usually at this point, the light bulb goes off...

vgcea Posted 3 Jun 2013 , 6:14am
post #6 of

A

Original message sent by btrsktch

Yea, I don't quite agree with this statement either.  A little education can go a long way, especially to those in areas who really don't know, instead of just not getting it.  [B]I've had some - not alot, but some who have come back to place an order once they understood pricing.[/B]

I typically use McDonald's as my analogy.  I say if you pay $1.00 (plus tax!) for frozen french fries dropped in 5 day oil, and you serve it to 100 people for that one task.  That is gonna cost you $100.  Now, I have to get the ingredients, mix, bake, ice and decorate a cake. If I charge the same $1.00 per person as McDonalds for each task, etc. Usually at this point, the light bulb goes off...

Yeah can't forget those who go price shopping only to realize they're not going to get the quality they seek any cheaper. Half the time they come back and order, the other half they order somewhere else and the result is NOTHING like the original design. Most often it's been scaled down beyond recognition.

loriemoms Posted 3 Jun 2013 , 2:24pm
post #7 of

I am the same way.  I don't explain anything.  They ask how much, I tell them how much, and if they ask why, I tell them all of our work is hand made.  Period.  Those who know my work are more then willing to pay it.  I only have the kind of look of shock from those who can't afford us to begin with.  To me it's not any different then walking into a Porsche dealer and asking why are they so expensive.  It's a Porsche for gods sake!

howsweet Posted 3 Jun 2013 , 2:40pm
post #8 of

I'm not going to explain unless they ask. Hardly anyone asks. I will itemize if I think it will help the customer figure out what he/she wants.
 

jason_kraft Posted 3 Jun 2013 , 3:16pm
post #9 of

A

Original message sent by loriemoms

To me it's not any different then walking into a Porsche dealer and asking why are they so expensive.  It's a Porsche for gods sake!

I'm not sure that's the most useful analogy. Porsche has the benefit of several decades of marketing pushing its premium brand positioning around the world, and there is a very high barrier to entry to becoming a Porsche dealer. The customization options and itemization involved in buying a Porsche are also very limited.

Contrast this with custom cakes, where industry marketing and unlicensed bakers can often end up devaluing premium products. As a result, customers set unrealistically low budgets, and it falls to the vendor to educate them.

j92383 Posted 3 Jun 2013 , 7:12pm

I tell them everything is made from scratch including the fillings, frosting etc. That usually works. But some people need it broken down a little further. This is the example I use.

It takes me 10 hours from start to finish to make this cake if I do it for $50 that equals to $5 and hour after I deduct ingredients it's drops down to $3.50. If you went to a job iterview and someone offered you $3.50 an hour would you accept the job? 

 

So far no one is willing to work for that. lol

costumeczar Posted 3 Jun 2013 , 11:39pm

I don't explain anything, but people don't ask me why my cakes cost what they cost,either. If someone did I would tell them that they're not only paying for the scratch baking, they're paying for the experience of someone to bake it from scratch and decorate it so that it looks the way they want it to.

Evoir Posted 3 Jun 2013 , 11:59pm

A

Original message sent by costumeczar

I don't explain anything, but people don't ask me why my cakes cost what they cost,either. If someone did I would tell them that they're not only paying for the scratch baking, they're paying for the experience of someone to bake it from scratch and decorate it so that it looks the way they want it to.

...And deliver it to your wedding venue as a licensed, insured vendor, on the right day and time, and not have it looked like a monkey made it ;-)

Evoir Posted 4 Jun 2013 , 12:03am

AI actually do sort of itemise my quotes. The base price I work out myself taking into account all the ingredients, labour and overhead and numbers of servings required. That's a fixed number on the quote. The rest of it is itemised so they can see what every optional extra is costing them. Like toppers, bling, and highly detailed painted or piped effects. This works best for me as clients then get an appreciation for the way cost can build up for their 'champagne tastes'.

costumeczar Posted 4 Jun 2013 , 12:34am
Quote:
Originally Posted by Evoir 


...And deliver it to your wedding venue as a licensed, insured vendor, on the right day and time, and not have it looked like a monkey made it icon_wink.gif

Monkey iced cakes not allowed!

Annabakescakes Posted 4 Jun 2013 , 1:59am

A

Original message sent by LKing12

I give them my cost and I don't explain.  No one explains why something costs what it cost.  You pay for quality or do without.

I agree! I have never asked why anything costs what it does, I just ask what it costs and figure out if I can afford it!

Original message sent by loriemoms

I am the same way.  I don't explain anything.  They ask how much, I tell them how much, and if they ask why, I tell them all of our work is hand made.  Period.  Those who know my work are more then willing to pay it.  I only have the kind of look of shock from those who can't afford us to begin with.  To me it's not any different then walking into a Porsche dealer and asking why are they so expensive.  It's a Porsche for gods sake!

yep? The shocked people are not my clients!

debm1 Posted 5 Jun 2013 , 12:25am

I added this to my website, and my facebook page. It gives some insight into "custom costs".

 

Ever wonder why custom cakes cost so much more than cakes from the grocery store? I’ll try to compare, but honestly, there is not much to compare. The grocery store usually has X number of cakes to choose from. They have lots of layers mass-baked, for you and a number of other people. That fluffy white icing comes in a lovely white plastic 5-gallon bucket, and the raspberry filling was squeezed out of a see-through plastic sleeve that was on the shelf with all the other kinds of fillings. They purchase in bulk through the store chain, so the ingredients cost very little. The cake bases, cardboard circles, etc. are there, as there are only so many sizes of cakes offered. Customizing? That may vary some from one store to another. Production is key. Get it done fast. They will probably sell it to you at a price that barely breaks even, knowing that when you pick up your cake, you will probably purchase all the chips, soda, burgers, etc. that you need for the party.

 

Now lets go custom: I’ll be asking you lots of questions…  How many people are you serving? Is this the only dessert? Do you need larger servings, or “typical” wedding-sized servings? Do you have an idea in mind? You want a 6-tier cake shaped like a kangaroo? Time to sketch the cake plans, to make sure it feeds everyone, and will stand upright. A few hours of planning, drawing up the contract, meeting with the customer, emailing… Vanilla-Almond Sour Cream cake with raspberry filling? I’ll be going to the grocery store and paying RETAIL for red raspberries, lemons, etc.. After all, raspberry filling should be made with raspberries, right? Chances are the ingredients will be purchased from 2 or 3 different stores. I just spent the afternoon shopping for your cake ingredients. Now, off to the lumber/plumbing store… The base to hold the cake: Hmmmm… It needs to be very strong. I make a trip to the lumber store for a sheet of 1/2″ plywood, nuts, bolts, flat washers, and plumbing supplies. Then I’ll have to figure out the size and shape needed. Map it out, saw the plywood, sand the edges, make sure it is clean, and cover it with foil or wax paper. Then, it may also be covered in fondant in a color to match the cake. That tall kangaroo won’t stand on its own. There are 5 more plywood and/or cardboard plates to be cut, sanded, drilled, covered in foil, and make exact so that the kangaroo can be carved to actually look like a kangaroo. A center pipe will have to go from bottom to top, to keep this thing straight. The center hole in the cake will not actually be in the center of each of these boards. One long pipe will attach to the bottom board, and go clear to the top of the cake. Each plywood “plate” needs 4 to 6 holes drilled in it to attach PVC end caps underneath. Yup. Must drill a hole in each end cap, too, so that they can be attached with the right length bolts, flat washers, and nuts. As the cake is assembled, each iced tier is measured for height, and then pvc pipe is cut to exact lengths, put into the end caps, and lowered into the tier below. The weight of the cake has to be held by pipes and dowels, or it would crush the layers under it.

 

I’m going to need fondant… that will take about an hour and a half to make.  I’ll need gum paste… there’s another hour.  I’ll need modeling chocolate… another hour.  All of these things will need to be tinted different colors and kneeded by hand. This is still a couple days before the cake is due. 2 days before the cake due date… Time to start baking. 6 tiers… a minimum of 12 cakes in varying sizes. The legs and head will probably need to be made of rice krispies treats… need a couple batches of those made. Some heavy wire will be needed to go through the front legs. The rice krispies treats are molded around the wire and pvc pipes here and there and then carved with a knife, made smooth, covered in butter cream, and then covered in fondant/ gum paste/ modeling chocolate, and decorated. We have not even baked the cakes yet! The filling must be cooked, too. HOURS of baking, making multiple batches of butter cream, icing, stacking, carving, icing the outside, wrapping in fondant and modeling chocolate, sculpting parts, painting with food coloring and airbrushing… This cake is way too heavy, so it must be made in 3 parts and assembled at the venue. Everything that will be needed must go along in the Jeep. There must be a way to pack that cake in the Jeep for safe travel. It can not slip or fall over. Some dog better NOT run out in front of me. Time to travel. Must get there 2 1/2 hours before the party to set it up. There goes another half a day. Don’t worry, the other half of this day is waiting… the kitchen has to be cleaned. Your 3-D kangaroo probably took at least 35 to 40 hours, and a minimum of $145.00 in ingredients. This was your little peek into the world of extreme cake design. Now you understand why they cost more than $60.00. :)

jason_kraft Posted 5 Jun 2013 , 12:35am

ADeb, that's a great narrative but you may want to consider breaking it up into headings and smaller paragraphs or even bullet points.

debm1 Posted 5 Jun 2013 , 12:53am

HaHa... Jason, when I copied & pasted, it bunched it all together, and there were no breaks. Same thing when I added it to the sites. Then, I thought I'd leave it all bunched up like that, as it makes it kind of overwhelming, like the writer can't even find the time to take a breath. Good or bad, there was a reason to the madness. :) When I put it on here, I gave it only a couple breaks for sanity's sake.

 

One more thing... I really enjoy your posts. I have learned some great info. from you. Thank-you!

BakerBee7468 Posted 5 Jun 2013 , 12:54am

A

Original message sent by j92383

I tell them everything is made from scratch including the fillings, frosting etc. That usually works. But some people need it broken down a little further. This is the example I use. It takes me 10 hours from start to finish to make this cake if I do it for $50 that equals to $5 and hour after I deduct ingredients it's drops down to $3.50. If you went to a job iterview and someone offered you $3.50 an hour would you accept the job? 

So far no one is willing to work for that. lol

Great way to put it. I think a lot of people will understand when you put it that way.

jason_kraft Posted 5 Jun 2013 , 2:03am

A

Original message sent by debm1

HaHa... Jason, when I copied & pasted, it bunched it all together, and there were no breaks. Same thing when I added it to the sites. Then, I thought I'd leave it all bunched up like that, as it makes it kind of overwhelming, like the writer can't even find the time to take a breath. Good or bad, there was a reason to the madness. :) When I put it on here, I gave it only a couple breaks for sanity's sake.

Generally people who see a wall of text will just shut down and skip over it. I see where you're coming from in terms of the stylistic choice, but it just doesn't work on the web. One alternative is to keep the wall of text but add a tl;dr (executive summary) to the top to get people interested.

One more thing... I really enjoy your posts. I have learned some great info. from you. Thank-you!

No problem!

Sweet_Cakes Posted 5 Jun 2013 , 11:38am

I'm enjoying reading this thread but I have a question. We are obviously in business to make a profit. If you itemize your bills to the customer, how do you word it so that customer does have a part in paying for the rent, water, electricty, profit? I personally think it's a bit tacky to label it like that. I guess I'm too new to this LOL

costumeczar Posted 5 Jun 2013 , 12:18pm
Quote:
Originally Posted by Sweet_Cakes 

I'm enjoying reading this thread but I have a question. We are obviously in business to make a profit. If you itemize your bills to the customer, how do you word it so that customer does have a part in paying for the rent, water, electricty, profit? I personally think it's a bit tacky to label it like that. I guess I'm too new to this LOL

I itemize out the cake, any additional costs for special plates, pillars etc (which I rarely use but it's there if I need it) delivery, and a space for "additional costs" which I'd write out next to it if I needed to. I include everything in one price, so I usually don't need to itemize, but if someone wants a huge honking cascade of gumpaste I might add something on for that...it would go in the "additional costs" and I'd write "gumpaste cascade " next to it. That way if they came back and said that they'd changed their minds and didn't want that, I'd subtract that one thing out.

 

Itemizing is usually for the cake items, not for your overhead costs. That should be included in the cost of the cake, or price per serving, or however you figure that out.

jason_kraft Posted 5 Jun 2013 , 1:58pm

A

Original message sent by costumeczar

Itemizing is usually for the cake items, not for your overhead costs. That should be included in the cost of the cake, or price per serving, or however you figure that out.

This. If you want to give some examples of your overhead or discuss how many hours of labor something will take that's fine, but the itemized invoice should not specifically separate costs for ingredients/labor/overhead, and certainly not profit.

loriemoms Posted 5 Jun 2013 , 4:55pm

This is an interesting thread indeed. It shows you how there are so many different levels of bakeries on CC. I was a home baker and I agree, there is a lot more time and effort put into just shopping and researching lower costs items to help with overhead. I have now been in my shop for three years, and it is not the same world at all. So all of us posting are seeing things through a different light. I have employees to do a lot of the base work, and prep, and I have employees who decorate and I have employees who just answer the phone. I have to keep this in mind when I price a cake. Then there is rent, and tcam and taxes and utilities and misc crap. (like when a light fixture breaks down and it cost 800 dollars to fix it) I have levels of prices, based on the design, not just servings, because my better decorator costs more then my lower level decorator. I am not going to explain this to a customer. Its none of their business. But when I was a home baker, I did price things based on my time, and had very little overhead compared to what I have now.

 

 

Speaking of home bakers, since someone brought it up about how non licensed bakers are bringing down prices. That doesn't affect me, to be honest, I haven't seen a non license baker with much skill, and most of them die off, because they didn't realize how much work and money it would cost. And luckily, the venders in our area are becoming aware of this. Many of them are asking for proof of insurance because you can bring a cake. I have brides all the time coming to me in panic because their wedding cake "fell through" because the non license baker decided to all it quits. Brides and high end customers are becoming very educated on home bakers and I think if we just let the non license bakers burn themselves. I just don't like what it is doing to the legit home bakers. One that takes the time to get license and set up have the passion. Those who don't watch too much cake boss.

indydebi Posted 10 Jun 2013 , 4:06pm

Similar to another post earlier .....

 

My favorite response to one questioning price had to do with volume:  "A $4 cup of coffee isn't really expensive .....unless you're paying for 200 of them."

letsgetcaking Posted 10 Jun 2013 , 5:19pm
Quote:
My favorite response to one questioning price had to do with volume:  "A $4 cup of coffee isn't really expensive .....unless you're paying for 200 of them."

 

That's a great comparison, Indydebi. It's nice to see you posting again, by the way. :)

indydebi Posted 10 Jun 2013 , 5:28pm
Quote:
Originally Posted by letsgetcaking 

Quote:
My favorite response to one questioning price had to do with volume:  "A $4 cup of coffee isn't really expensive .....unless you're paying for 200 of them."

 

That's a great comparison, Indydebi. It's nice to see you posting again, by the way. :)

It's summer.  I have no classes.  Time to catch up in Cake World!  Having fun reading all of the posts this morning!

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