AI'm still laughing at Mrs Boogerbrain and Cake Safe strip poles!!

Welcome to CC Molly, everyone here is really lovely and you have hit the jackpot in terms of professionalism and people who truly love their work. And that was not sarcasm :)

wow. lost for words.

A

Welcome Molly - don't be scared.... the first thing you MUST learn as a cake decorater is that there may be lots of sugar involved but it doesn't guarantee that life is always SWEET.   The  life of a cake decorater is a hard one - there are no easy ways to the top - even though people will always try and grab the shortcuts.

What you have witnessed here is just a 'difference of opinion' - I don't agree with the way Jason always touts his.... 'check out your competitors'  - encouraging people to act as fake clients etc  and even though he may not realise it - giving people the impression that they must 'consider' what their competitors are charging in their pricing structure.   I don't condone these practices and think you CAN run a very successful business without having to do this. 

He is as adamant that he is right as I am adamant that I am right...... BUT our experience has been in two completely different areas of cake decorating at opposite ends of the spectrum and we live on separate continents.... so it is hardly surprising that we don't think the same. 

That's the thing with a forum - you don't know how qualified the advice is you are getting.   Hence my plea to new decoraters to do their own research.

Have a look at the link provided in one of the first few posts (by Auzzi) it is from the UK Cake Decoraters Guild site and it will require you to be a member before you can access it ..... but it does have loads of really relevant info (even more relevant as you ARE UK based)

and remember this....... NO real damage can be done to you by words on a screen.....  if I had of figured out how to inflinct bodily harm via the internet there would be ([COLOR=blue][COLOR=blue]mod edit)[/COLOR][/COLOR].... sarcastic humour is a part of the Aussie DNA 

AAppleGumPam is my sister-from-another-mother.

Jus' sayin'.

"If you can only ever hope to achieve average and you dont' want to work for nothing...... consider finding another way to earn an income and leave cake decorating as your much loved hobby"

There are plenty of successful bakeries that do average work. After all average means the norm. They don't do carved cakes, work with gumpaste or custom cakes. Have a few wedding cake designs.

Some of the  work I see on here is way above average. Some people want to work towards that and some are happy running a corner mom and pop bakery. Either way you can make a decent living.

Pam your work is fabulous and I strive to reach the level of you and some of the other bakers on here. The majority of people will never reach the level of cake artist. There is a large market for that kind of work but I think most people go their whole lives without ever buying a cake masterpiece, so there is a large market for that as well.

That is what I was saying by it's ok to be average. And I hope that 8" stilletto isn't for me

Molly, don't be afraid to post. We don't bite, Good advice is good advice no matter how it is delivered. This place has some of the best bakers and decorators in the world. When you are in a group with people from all over the place you will find a wide variety of personalities and styles. No one means any harm.
 

ATo clarify where my advice in this thread is coming from...it's based on three primary factors:

- Coursework, case studies, and projects relating to business and economics during my MBA at Santa Clara University - Co-founding and operating the business side of a successful custom order bakery - Experience from my day job, managing a business intelligence and enterprise data warehouse system for a Fortune 50 company for the past 11 years

I am neither a baker nor a decorator (my wife filled those roles when we ran the bakery). Baking and decorating skills are not relevant to a discussion of marketing and pricing, just like a background in economics is not needed to create an amazing cake.

In any case, Pam and I aren't really all that far apart in our advice. We both think people have to do their own research when it comes to pricing, and neither of us think they should rely solely on a price suggested by a stranger online or a competitor. Our main difference seems to be that Pam does not think a competitive pricing analysis to determine market value is necessary, while I think it's one of the pieces (note: not the only piece) to look at when putting together a pricing strategy.

If you agree with Pam, don't bother researching your competitors. If you agree with me, spend a little time learning what other businesses in your area charge for similar products to help you gauge how much markup you can apply without pricing yourself out.

It's especially interesting that this topic came up this week...I am just wrapping up a conference in DC focused on how businesses use a data visualization platform called Tableau to make decisions about sales, marketing, budgets, pricing, etc. A consistent theme throughout the conference is how collecting and analyzing data is critical in making better business decisions. Sure, it's possible to make a decision with a smaller amount of data, but you are relying more on luck since you may not be able to determine whether or not your decisions are optimal.

Somewhere earlier in the thread I said that is ok as long as you are striving to be your best...for some average is their best. Not everyone wants to create masterpieces. Some just love baking. If everyone could create the masterpieces then that would be the new average.

I agree with that 100%. I try every day. I fall down a lot but I always get back up...sometimes not right away, but eventually.

A

Bingo. The gist is more "it's OK to pursue your interests"...if you enjoy decorating, build your business around creating more complex designs and develop your decorating skill. If you enjoy baking more than decorating, focus on developing new flavors, refining existing recipes, and producing new recipes for under-served niche markets. If you enjoy the business side more than baking or decorating, work with a partner or hire an employee to take care of that part of the business so you can focus on creating cost efficiencies, developing new markets, and refining marketing strategies.

That said, there's nothing wrong with (for example) your cake decorating skills being average if decorating is not a competitive advantage and you aren't interested in pursuing it further.

AI need to remind you all to be helpful and please leave off the vulgarities and rudeness.

I'd also like to remind you that you were all once Newbies, and that we encourage new members here on CC. What you may consider a "silly question", the newbie may be in the dark about. Please exercise a bit of patience and guidance, instead of judgement.

woo hoo! I'm off this site for a couple of days and i miss all the fun!

My 2 cents is that you should have a general idea of what the market in your area is charging just so you know, but to ignore it and charge what you need to in order to pay yourself what you're worth.

A

You have to know what the general market is so that you can be ready with your marketing, or your sales pitch, when people say that you're too expensive if you plan on charging more than what they're used to paying. You have to know what your expenses are and what you want to earn hourly to know what you and your time are worth. It's not subjective at all, it's pretty straightforward. When a realtor is pulling comps that's concrete information, and people always pad that to start so that when they get negotiated down it's the figure they really want to sell the house for. I don't know that real estate is a good analogy for custom cakes unless you intend to negotiate on your pricing, which I don't, because I know what I'm worth. But I've only been pricing my wares for a little under 20 years and making a good living at it, so don't mind me.

AReal estate is a bad comparison because comps ultimately set the limit on what you can ask, a buyer can only finance what the bank decides its worth, which they use comps for. If your house doesn't appraise for the selling price, your seller won't be able to borrow that much. Whereas cake can cost whatever anyone wants to pay for it.

Which is probably why it was at the tip of my tongue. I hope know one is going to explain to me that I'm not actually speaking, but typing and that they are not the same. Besides - for all you know, I may talk to the computer

My point is that you have to know what people think they're going to be paying based on what the market in your area has been. Then you have to figure out what you want to earn based on what you think your expenses are and how much you think your time and experience are worth. If those two are similar then your job is easy because you won't have to have the extra step of explaining why your cakes are more expensive than the average that people are used to paying.

If your prices are going to be higher, you need to ignore what people are charging in your area because your pricing shouldn't be based on the average, it should be based on your own figures. You also may have to sell your product harder and in a different way, because you're going to be getting a lot of "HOW MUCH?" when people call you. And you have to know HOW MUCH YOU THINK YOU'RE WORTH, because if you don't, you're going to cave and start adjusting pricing for whiners and moaners who claim poverty. If you have a solid sense of how much your work is worth, you won't feel bad about charging that amount, even if you know that your prices are higher than the average. It doesn't matter how much other people are charging, but you do need to know what they're charging in general, just so that you can be prepared to adjust your marketing if you have to go that route.

People who don't know what they're worth tend to end up on here posting "Did I charge too much?" threads.

Are you saying when comparing your prices with others, ignore prices of people who undercharge if you want to be fair to yourself?  I definitely understand that. I try as hard as I can to "ignore" them when pricing,  but they do drag down the market.   I would never suggest charging in line with people who are undercharging - in my mind, that goes without saying.

But you're exactly right -- it really doesn't go without saying.  There are plenty of people who would just call three cheap cake ladies and price accordingly. 

What I have to do to compete with these people is produce a product as near to perfect as I can get it. That's fine, its what I do anyway. I don't try to sell anyone - I just let the pics speak for themselves. If I lived in a small town, I'd probably not be in business as the cheap cake ladies (aka cake subsidizers) often dominate.

A

If a competitor is pricing below market value then yes they need to be ignored from a pricing perspective, but if there is enough of a local supply of sufficient quality available at these unsustainable prices that is something to consider when determining your marketing strategy.

I like the real estate analogy, as long as you look at real estate investment and sales as an ongoing concern (i.e. flipping houses). If you buy a house for $400K and spend $100K to upgrade the existing kitchen to a state-of-the-art gourmet kitchen, you need to consider the target customers for that particular property. If you ignore market values you might list the property at, say, $550K.

If median home values in the surrounding area are $400K, you may have been better off spending less on upgrades to a point where the house is "good enough" for the target customer (e.g. spend $10K in upgrades and list at $450K), since $550K might be a tough sell for buyers looking in that area. On the other hand, if the house is surrounded by $600K properties, you can consider listing significantly higher than your original $550K estimate based on costs only.

Looking at the issue of underpricing, if several local homeowners decide to list their properties on their own and don't do the necessary research, this can impact both the supply and comps. Using our example above, let's say your house is in a tract with a median home price of $600K, and four of your neighbors list their $600K homes for $450K. Based on this information you wouldn't immediately adjust your selling price down to $450K, but since these listings will depress market values you may end up holding off on listing your property for the time being or deciding to rent it out instead. Drawing parallels to the world of custom cakes, this would translate into holding off on starting a business, targeting a different area, or marketing to a specific niche if you can provide a unique feature.