Molly69 Posted 10 Sep 2013 , 8:33pm
post #1 of

just starting out with a home cake decorating business in the UK - just wondering how you all go about researching what others in your area charge for their cakes?  

55 replies
Jenny BakesAlot Posted 10 Sep 2013 , 8:43pm
post #2 of

I google "bakeries", click on Google maps, find the bakeries near me and click on their website.  Some have prices, some don't.  Or just visit them, check out their prices, buy a cupcake, decide mine are better and leave. Lol!

ApplegumPam Posted 10 Sep 2013 , 9:23pm
post #3 of

I don't think this is something that needs to be a 'first' step -  work out your pricing based on all the criteria you have available - your costs, your time, your equipment etc.

 

My cakes are way more expensive than most of my 'local competition' - in reality they are NOT my competition - they just happen to be people that are doing something 'similar'  -  a HUGE difference in product !!

 

Had I used the logic that people on here do - I would be working for peanuts, stressed to the max wondering what I was doing wrong -  I don't WANT to make 50 cakes a week, heck I don't even want to make 5 cakes a week - I am ONE person with ONE set of hands......   I am paid for what I do - for the quality of the ingredients I use - for the finish on my cakes.

You don't NEED to price compare with your local competition....... BUT you do need to do it BETTER !!

A busy cake decorater is not the only sign of a GOOD decorater - it normally means their product is TOO cheap!

jason_kraft Posted 10 Sep 2013 , 9:52pm
post #5 of

AIt's definitely important to know what the market price is in your area, and that is often determined by what other businesses that target the same customers are charging. As mentioned above, the best way to do this is to search for other local bakeries and see what types of products they offer, how they compare with yours, and how much they charge. If prices are not listed, feel free to call them and get a quote for a theoretical order.

Combine this information with research on what potential customers in your target market are willing to pay for the type of product you offer (again by reaching out to them directly) and you will have a good idea which price points your market will support. If these price points do not result in an adequate profit margin/hourly wage based on your costs and efficiency, you need to reduce costs and/or find a different market.

ApplegumPam Posted 10 Sep 2013 , 11:21pm
post #6 of

I disagree Jason.

This is only important if you are wanting to run a shop where 'volume' is important

The best advice is to aim to have a 'highly sought after' product - a stand out from the crowd product ...... where people WILL come to find you - where people will pay what you are worth - where individual hand crafted pieces are prized and valued

Sure you will NOT sell 500 pieces per week .... but you won't HAVE to ....  you price your work as to the quality of your product !

You will never soar with the eagles if you think (and price) like a turkey !!

ApplegumPam Posted 10 Sep 2013 , 11:33pm
post #7 of

Quote:


This link contains some really good advice


 

scrumdiddlycakes Posted 10 Sep 2013 , 11:53pm
post #8 of

Quote:

Originally Posted by ApplegumPam 
 

I disagree Jason.

This is only important if you are wanting to run a shop where 'volume' is important

The best advice is to aim to have a 'highly sought after' product - a stand out from the crowd product ...... where people WILL come to find you - where people will pay what you are worth - where individual hand crafted pieces are prized and valued

Sure you will NOT sell 500 pieces per week .... but you won't HAVE to ....  you price your work as to the quality of your product !

You will never soar with the eagles if you think (and price) like a turkey !!

Yep.

 

The only thing I have ever done any form of price comparison with are the cupcakes that I sell wholesale. As far as my cakes go, I have no idea what anyone else in town sells for, unless a client tells me, and it doesn't matter.

I decided what I wanted to get paid by the hour, and charge accordingly. I do know I am more expensive than others in my area, only because I have had clients, and other bakers, tell me.

If you produce a consistently good, custom product, people will come. A cake designer and decorator is entirely different than a bakery, (I have worked in both, rl experience talking here), you are attracted a different type of business.

 

Now if you are wanting to specialize in birthday cakes and cupcakes, comparing prices makes sense. It also doesn't hurt if you are worried about undercutting, but if you set up your pricing structure correctly, and pay yourself at least decently, that will not happen.

jason_kraft Posted 11 Sep 2013 , 12:04am
post #9 of

A

Original message sent by ApplegumPam

This is only important if you are wanting to run a shop where 'volume' is important

The best advice is to aim to have a 'highly sought after' product - a stand out from the crowd product ...... where people WILL come to find you - where people will pay what you are worth - where individual hand crafted pieces are prized and valued

Creating a product tailored at the high end of the market (premium quality ingredients, complex designs, hand crafted sculpting, etc.) is certainly one strategy, but it can only work if enough local customers are willing to pay for it. For example, if you discover in your research that other local businesses sell similar high-end products for $2/serving and local customers do not have the budget for anything higher, you probably won't do very well.

Knowing market value based on both competitive analysis and customer research is critical regardless of whether you sell one $1000 cake or twenty $50 cakes every week. There is room for differentiation at all price points.

jason_kraft Posted 11 Sep 2013 , 12:14am

AThe flip side of this issue also applies, even at the high end of the market. If your customers are willing to pay more than you are charging or competitors with similar products charge more than you, you may be leaving money on the table.

BatterUpCake Posted 11 Sep 2013 , 12:16am

Quote:

Originally Posted by ApplegumPam 
 

I disagree Jason.

This is only important if you are wanting to run a shop where 'volume' is important

The best advice is to aim to have a 'highly sought after' product - a stand out from the crowd product ...... where people WILL come to find you - where people will pay what you are worth - where individual hand crafted pieces are prized and valued

Sure you will NOT sell 500 pieces per week .... but you won't HAVE to ....  you price your work as to the quality of your product !

You will never soar with the eagles if you think (and price) like a turkey !!

 

Quote:

Originally Posted by ApplegumPam 
 


This link contains some really good advice


 

 

While I agree with you that everyone should strive for perfection and to set them selves apart not everyone will be able to attain the level of some of the true artists on this site. It would be great if they could but then it wouldn't be special, would it? Someone has to be average in everything. There is nothing wrong with being average if you are being the best you can be and just settling for good enough. I am not disagreeing with you on any of your points....just saying what came into my mind when I read your post. I also agree that her prices are too low if she is turning business away. Which also makes me think the OP is above average!

ApplegumPam Posted 11 Sep 2013 , 12:32am

I don't RELY on local market Jason - never have done - never will

 

When I started cake decorating there were very few of us around LOL  - so there was NEVER any competition - people often had to book you 12months in advance.

It isn't about LOCAL  ... well I am speaking for Australia..... but I guess if it is OK for you to peddle your US based theories to the OP based in the UK I;m guessing mine should be at least carry as much weight.

 

'Custom' anything is NOT about LOCAL  -  they are not something that people WOULD expect to be able to buy on every street corner.

 

It IS something that people will travel out of area for - I deliver some of my cakes 4+hours away (and that is only ONE DIRECTION)

Sydney only has a population of 4-1/2million - spread out over 12,000 ? sq kilometres -   I could probably name 100+ high end cake decoraters - 1,000's of people capable of producing a nice wedding cake and 10's of 1,000s of 'wannabee' cakers with FB business pages  (all of whom could produce great cakes too)

Most of the high end cake decoraters I know deliver ALL over Sydney - they deliver regularly to the Hunter Valley (4+hrs each way) and plenty of them deliver all over the country (by Air-freight)

So, using your theory Jason..... WHO is the local market ??   price comparisons with ??? (who)  - who do ring?

To be quite blunt here ..... I am SICK TO DEATH of having my time wasted by people using this 'shop around your competitors' advice - fake customers wasting my time - more often than not.... FAKE cakers who think they can make a similar cake just by looking at it.... but who dont REALLY know how time consuming it may be.... because they have NEVER done it .... they think I am an extortionist..... but will gladly charge 4 times what THEY are worth - and still undercut me..... BUT the client will not get a comparable product!

I have resorted to charging a 'booking fee' now - to eliminate the time wasters !!

Norasmom Posted 11 Sep 2013 , 12:55am

I read this website to find out what to charge.  I also have emailed bakeries to ask their prices, which many on this website would say is a no-no, as I was "wasting their time. "  I really was not wasting their time, as I have referred people to them when I am unable to fulfill orders.  I feel there's nothing wrong with doing market research to find out about pricing appropriately... 

Also, the nearest bakery that makes the kind of cakes I do is 20 miles away.

jason_kraft Posted 11 Sep 2013 , 1:03am

AI don't believe anyone should "rely" solely on competitive analysis and customer research to set prices, but they are important data points to consider as long as you are selling in a country with a capitalist economy. If there's no competition in your market segment then obviously there would be no data from a direct competitive analysis, but you would still be able to get information to help set a lower bound on prices, not to mention customer research.

As you demonstrated, the definition of "local" can vary widely depending on your product, your business practices, demographics, etc. Generally local will refer to customers who purchase from you directly via pickup or delivery. If you sell to a regional market you would probably have limited shipment capabilities and wholesale customers that serve several different metro areas. Selling nationally means that you can ship to anyone in the country, etc.

My emphasis on local research is because most people posting here who have businesses will probably be focused on selling locally, but if you sell regionally and/or nationally then your competitive analysis would simply expand to encompass a sampling of your competitors at the regional and/or national level.

If you don't want fake customers wasting your time, just post your price ranges publicly.

ApplegumPam Posted 11 Sep 2013 , 1:44am

I post...... from $150  - 

Which is correct - it goes upwards from there ..... to ????  however much money you have !   I don't have a catalogue of cakes with a 'Pick One' - my cakes are true 'custom' pieces - each designed for THAT particular person - so the price is calculated AFTER design.

THIS fact alone does not stop people emailing with a picture of a cake - saying 'How much for this"?  or telephoning with a detailed description of their cake of choice ... saying HOW MUCH?

 

Yes - these are more often than not ... other cake decoraters!

I guess what I am saying is that your pricing CAN be done without playing stupid games.   We are not merely 'manufacturers' - we are custom artists

I think people today are just basically LAZY - it does take time to work out how much you should charge - I find it puzzling that people would rather come on to a faceless forum where people could be bloody unemployed, nose-picking, failed at everything they ever tried, never made a cake in their lives wannabees - none of us know for sure who is REAL and who is a fictional character built up over many posts....... buy hey.... lets base our pricing on whatever they tell us...  instead of sitting down with a pen and paper and write down all your relevant data - bake some, and bake some more ... keep writing .. keep calculating.... and WORK out what you need to set your price at.....

 

It doesn't matter if Mrs Boogerbrain up the road can sell a cake for half what you can...... maybe she just plucked a price off another dodgy forum......IF you match her price..... you are working for less than you calculated you should be !!

 

The reason prices are coming down..... is market saturation!!!   - so you can only overcome that by being better than average.

 

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

 

jason_kraft Posted 11 Sep 2013 , 1:52am

A

Original message sent by ApplegumPam

buy hey.... lets base our pricing on whatever they tell us...  instead of sitting down with a pen and paper and write down all your relevant data - bake some, and bake some more ... keep writing .. keep calculating.... and WORK out what you need to set your price at.....

And that's exactly why I advocate gathering as much information as you can before you set prices.

The reason prices are coming down..... is market saturation!!! - so you can only overcome that by being better than average.

Agreed. Of course "better" is a subjective term...all you need is a single strong competitive advantage that speaks to a viable target market, and that advantage may or may not involve the top of the market.

Re pricing and custom cakes, it may be helpful to include approximate price ranges (total and per-serving) with the examples of your work you have posted online. You don't need a specific price list as long as there are some examples at a few points in the spectrum between simple and incredibly detailed.

howsweet Posted 11 Sep 2013 , 1:55am
Quote:
Originally Posted by ApplegumPam 
 

I don't RELY on local market Jason - never have done - never will

 

When I started cake decorating there were very few of us around LOL  - so there was NEVER any competition - people often had to book you 12months in advance.

It isn't about LOCAL  ... well I am speaking for Australia..... but I guess if it is OK for you to peddle your US based theories to the OP based in the UK I;m guessing mine should be at least carry as much weight.

 

'Custom' anything is NOT about LOCAL  -  they are not something that people WOULD expect to be able to buy on every street corner.

 

It IS something that people will travel out of area for - I deliver some of my cakes 4+hours away (and that is only ONE DIRECTION)

Sydney only has a population of 4-1/2million - spread out over 12,000 ? sq kilometres -   I could probably name 100+ high end cake decoraters - 1,000's of people capable of producing a nice wedding cake and 10's of 1,000s of 'wannabee' cakers with FB business pages  (all of whom could produce great cakes too)

Most of the high end cake decoraters I know deliver ALL over Sydney - they deliver regularly to the Hunter Valley (4+hrs each way) and plenty of them deliver all over the country (by Air-freight)

So, using your theory Jason..... WHO is the local market ??   price comparisons with ??? (who)  - who do ring?

To be quite blunt here ..... I am SICK TO DEATH of having my time wasted by people using this 'shop around your competitors' advice - fake customers wasting my time - more often than not.... FAKE cakers who think they can make a similar cake just by looking at it.... but who dont REALLY know how time consuming it may be.... because they have NEVER done it .... they think I am an extortionist..... but will gladly charge 4 times what THEY are worth - and still undercut me..... BUT the client will not get a comparable product!

I have resorted to charging a 'booking fee' now - to eliminate the time wasters !!

 

 

 

I'm one of the ones who has suggested this. The reason is because I produce a high end product, support myself 100% on my cake business and am sick to death of under cutters and people who literally don't care enough or have the sense to charge what they're worth.  As far as I can tell, these folks either can't do the math, don't want to do the math or something, but I figure maybe they'll make a phone call.  If they were sitting down and figuring out their costs and what they're working for then they'd raise their prices, wouldn't they? So we know they don't do it. 

 

A few of these people actually put out some nice cakes. Their product might not be quite as nice as mine, but it's a third or half the price.  I have time wasters who get my price and come back to me and say they'll let me do the cake if I'll do it for half the price because they found someone who would. They wind up thinking I'm price gouging. So my thought was... if these undercutters don't believe me that they undercharge when I post here,  maybe if they get out there and see for themselves what others are charging, they'll wake the heck up.

 

 

Personally, I don't mind if a competitor succinctly asks me for a cake price, but I sure don't want them to waste my time bringing every cake picture they see. Or cakes that have to be planned out before they can be quoted (like a 3d hundred serving airplane that has to match the customer's personal plane..). Heaven forbid they get chat me up in an effort sound more like customer. Like you, I don't have that kind of time.

 

 

I honestly hadn't thought about how this might effect anyone.

howsweet Posted 11 Sep 2013 , 1:59am

And regarding the term local - I do see custom cake people trying to just sell to people in their area or neighborhood. They truly misunderstand their product and market. I used to try to explain about that, but I've stopped. It turns out no one appreciates it and it's sort of like shooting myself in the foot to do so.

howsweet Posted 11 Sep 2013 , 2:13am

For the record, when I suggest anyone check out prices of competitors, I mean brick and mortar store front bakeries. I figure they have to charge something close to fair value.

Quote:

Originally Posted by ApplegumPam 
 

I post...... from $150  - 

Which is correct - it goes upwards from there ..... to ????  however much money you have !   I don't have a catalogue of cakes with a 'Pick One' - my cakes are true 'custom' pieces - each designed for THAT particular person - so the price is calculated AFTER design.

THIS fact alone does not stop people emailing with a picture of a cake - saying 'How much for this"?  or telephoning with a detailed description of their cake of choice ... saying HOW MUCH?

 

Yes - these are more often than not ... other cake decoraters!

I guess what I am saying is that your pricing CAN be done without playing stupid games.   We are not merely 'manufacturers' - we are custom artists

I think people today are just basically LAZY - it does take time to work out how much you should charge - I find it puzzling that people would rather come on to a faceless forum where people could be bloody unemployed, nose-picking, failed at everything they ever tried, never made a cake in their lives wannabees - none of us know for sure who is REAL and who is a fictional character built up over many posts....... buy hey.... lets base our pricing on whatever they tell us...  instead of sitting down with a pen and paper and write down all your relevant data - bake some, and bake some more ... keep writing .. keep calculating.... and WORK out what you need to set your price at.....

 

It doesn't matter if Mrs Boogerbrain up the road can sell a cake for half what you can...... maybe she just plucked a price off another dodgy forum......IF you match her price..... you are working for less than you calculated you should be !!

 

The reason prices are coming down..... is market saturation!!!   - so you can only overcome that by being better than average.

 

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

 

I am always stunned when someone has actually read my website. Mine also is a minimum of $150 and it even says most birthday cakes fall between $225-$375. As far as I can tell, all that has done for me is make one person mad who thought they wouldn't have to pay more than $375 for a $1600 cake.

 

I'm afraid to post actual prices per cake, but I have thought about doing it. It's also hard to see how big a cake is. I'm afraid they would glance at the price and not see the number of servings.

BatterUpCake Posted 11 Sep 2013 , 2:13am

I was looking to do a specific design. It was recommended to me here to contact a few of my local competitors. For the exact same cake I was quoted $150-$300.

ApplegumPam Posted 11 Sep 2013 , 2:17am

Jason - you missed my point

 

OUR local .... would be Sydney Metro and its surrounds -   NO cake decorater here would rely on JUST servicing say... 1 suburb - it just isn't practical

Taking 2010 Census data as an example ..... Sydney and its surrounds only had 13,000 weddings - that would include those that just attended the Registry office and perhaps a LOT that didn't have a cake.  So even using 10,000 as a ball park figure....   that is less than 1 cake per square kilometre .. PER YEAR !!

 

jason_kraft Posted 11 Sep 2013 , 2:23am

A

Original message sent by ApplegumPam

Jason - you missed my point

OUR local .... would be Sydney Metro and its surrounds -   NO cake decorater here would rely on JUST servicing say... 1 suburb - it just isn't practical

[quote name="jason_kraft"]

the definition of "local" can vary widely depending on your product, your business practices, demographics, etc.[/quote]

howsweet Posted 11 Sep 2013 , 2:29am

Quote:

Originally Posted by BatterUpCake 
 

I was looking to do a specific design. It was recommended to me here to contact a few of my local competitors. For the exact same cake I was quoted $150-$300.

Haha - so what do you define local as and what do you mean by competitor?

 

I probably won't be here for the answer because no one would let me in the fight, so I'm just going to go chill in a Cake Safe and try to avoid the strippers. :lol::D

scrumdiddlycakes Posted 11 Sep 2013 , 2:32am

I took prices down a couple years ago, for the exact reasons howsweet listed. One of the best things I have done, saved me a multitude of headaches.

If you are making typical bakery style birthday cakes with roses and writing on top, online prices are just fine to post, when you are creating custom tiered cakes, it just confuses people.

jason_kraft Posted 11 Sep 2013 , 2:35am

A

Original message sent by BatterUpCake

I was looking to do a specific design. It was recommended to me here to contact a few of my local competitors. For the exact same cake I was quoted $150-$300.

Assuming these competitors service the same local area (whether that means a 20 mile radius or a 200 mile radius, doesn't really matter) and have a product on par with your own, you can then use that information with what you've gleaned about typical customer budgets and your own costs to figure out what appropriate pricing would be. For example, if $15/hour and a 25% markup for that specific design puts you at $250, you know you're on the right track, but if it puts you at $500 (or $100) you may need to reexamine your business model.

ApplegumPam Posted 11 Sep 2013 , 2:40am

Quote:

Originally Posted by scrumdiddlycakes 
 

I took prices down a couple years ago, for the exact reasons howsweet listed. One of the best things I have done, saved me a multitude of headaches.

If you are making typical bakery style birthday cakes with roses and writing on top, online prices are just fine to post, when you are creating custom tiered cakes, it just confuses people.

Hallelujah!!!!  - somebody knows the definition of 'CUSTOM'  .....     I was starting to think I WAS living on another planet !!

 

Quote:
Originally Posted by howsweet 

 

 

I probably won't be here for the answer because no one would let me in the fight, so I'm just going to go chill in a Cake Safe and try to avoid the strippers. :lol::D

 

Too funny.... but if this fight get down to Jason stripping.... I'll be running to the BLACK Cake Safe myself.

I concede defeat ........   I cannot get Jason to understand - it is like trying to get a blind person to describe the colour of the sky!
 

PS - I actually have some real cake work to get on with   :P

howsweet Posted 11 Sep 2013 , 2:45am
Quote:
Originally Posted by ApplegumPam 
 

Hallelujah!!!!  - somebody knows the definition of 'CUSTOM'  .....     I was starting to think I WAS living on another planet !!

 

 

Too funny.... but if this fight get down to Jason stripping.... I'll be running to the BLACK Cake Safe myself.

I concede defeat ........   I cannot get Jason to understand - it is like trying to get a blind person to describe the colour of the sky!
 

PS - I actually have some real cake work to get on with   :P

Just to make sure everyone's in on the joke -  on another thread, BatterUp referred to the pole thing in the cake safe as a stripper pole.

 

And apropos of nothing:

Molly69 Posted 11 Sep 2013 , 10:10am

wow I wasn't expecting my question to cause such a heated debate.  

 

It was merely a question regarding how you research prices in your area - not a question of " how much do you charge for your cakes".  

Quote:
 Originally Posted by ApplegumPam View Post
I think people today are just basically LAZY - it does take time to work out how much you should charge - I find it puzzling that people would rather come on to a faceless forum where people could be bloody unemployed, nose-picking, failed at everything they ever tried, never made a cake in their lives wannabees - none of us know for sure who is REAL and who is a fictional character built up over many posts....... buy hey.... lets base our pricing on whatever they tell us...  instead of sitting down with a pen and paper and write down all your relevant data - bake some, and bake some more ... keep writing .. keep calculating.... and WORK out what you need to set your price at.....

I have already worked out my costs & labour in great detail, but I also thought it wise to consider what my competitors are charging for a couple of reasons.

1. I live in a small town and within the town & surrounding villages there are approximately 6 other home bakeries 

2. I do not make novelty cakes which all of them do make.

3.  I don't feel I could justify charging more than these bakeries as they have a lot more experience than me.  I am self taught and have only made a handful of cakes so far!

4. I don't want to make more than 1 or 2 cakes a week.

 

thanks so much for all your replies - I have google searched my area to see what is out there and what people are charging and i intend to base my prices in relation to those, all the points above and  the type of cakes I intend to make and my own level of experience  ;-D

MimiFix Posted 11 Sep 2013 , 11:45am
Quote:
Originally Posted by ApplegumPam 
 

... I think people today are just basically LAZY - it does take time to work out how much you should charge - I find it puzzling that people would rather come on to a faceless forum where people could be bloody unemployed, nose-picking, failed at everything they ever tried, never made a cake in their lives wannabees... 

 

It doesn't matter if Mrs Boogerbrain up the road can sell a cake for half what you can...... maybe she just plucked a price off another dodgy forum......IF you match her price..... you are working for less than you calculated you should be !!

 

The reason prices are coming down..... is market saturation!!!

 

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

 

Quote:
Originally Posted by Molly69 
 

wow I wasn't expecting my question to cause such a heated debate. 

 

Molly69, you are very new here and probably don't know yet. A posted question often becomes a conversation that helps others and allows for this kind of exchange. Pricing is an issue - one of the more heated topics. And with an over-saturated market filled with "lazy" "wannabees" and "hobby" bakers who have no understanding of (or regard for) business, it's become a tiresome debate. 

Molly69 Posted 11 Sep 2013 , 12:21pm

oh ok I completely understand and I can see how helpful these conversations can be.  I am extremely grateful for all the advice I have read on here and all the things I am learning.

 

On the flip side some of the above comments may scare off a newbie like myself from posting a question!!  

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