SwtCanuck Posted 23 Sep 2013 , 7:24pm
post #1 of

Just need a place to vent. I own a licensed custom bakery. Put alot of hard work and money into making my dream a reality. I charge in the upper middle of the road for my creations. Probably could charge a bit more but I don't have huge overhead costs.

So I am getting frustrated when I hear brides asking for quotes then come back with "A lady told me she can do it for less than $2 per slice" I know people need to start somewhere and charge accordingly but come on! Ugg! How are you making money at that price point??

I am not trying to compete with Costco. I make a great tasting cake and am very busy with the orders I get. I'm just getting frustrated with all these "home based non-licensed bakeries". In BC you must be licensed by the city and inspected by the health unit and you are not allowed to advertise until the paper work is filled out. It just frustrates me.

Thanks for letting me get it off my chest :cake:

78 replies
Smckinney07 Posted 23 Sep 2013 , 7:48pm
post #2 of

AI understand and definitely feel you! I think a lot of it is ignorance when it comes to pricing, or this is an easy way to make extra money (read that in a magazine the other day-new jobs for stay at home moms or something like that).

I remember a past thread where someone was saying they only get paid for ingredients or they charge less because they are new. Someone stated MD's, lawyers, etc. don't charge less for being new to the business lol, I love that because it's so true!

BrandisBaked Posted 23 Sep 2013 , 7:55pm
post #3 of

AIf you're "very busy" and are happy with what you charge, why does it matter what anyone else is charging?

therealmrsriley Posted 23 Sep 2013 , 8:05pm
post #4 of

Definitely don't lower your standards or your prices to compete with those that aren't charging enough. One thing is for sure - when people don't charge enough they will either burn out or they will be forced to raise prices anyway. At least that's what I've found.

ohsugarsweets Posted 23 Sep 2013 , 8:15pm
post #5 of
Quote:
Originally Posted by BrandisBaked 

If you're "very busy" and are happy with what you charge, why does it matter what anyone else is charging?

 

It doesn't matter how busy a business is. When someone does "cheap" work, it affects the entire profession. I'm licensed and work from my home kitchen, I charge as if I have a storefront. I've been told I'm pricey then they go to their grandma's uncle's cousin for the cake because they'll make it for $25. I get a little irritated with this, but honestly,  I get more satisfaction when they post pics of the cake wreck. Lol

jason_kraft Posted 23 Sep 2013 , 8:20pm
post #6 of

A

Original message sent by SwtCanuck

Put alot of hard work and money into making my dream a reality. I charge in the upper middle of the road for my creations. Probably could charge a bit more but I don't have huge overhead costs.

If you can charge more, do so...not having huge overhead costs just means that you will have a higher profit margin. Factoring in what local licensed competitors are charging for similar products as well as the budgets of your target customers will help determine how high you can go.

The main issue seems to be with other businesses underpricing, regardless of whether or not they are licensed. I wrote an article on my blog ("Pricing, Market Value, and Economic Damage", linked below) about this topic and some steps you can take to address it.

BrandisBaked Posted 23 Sep 2013 , 8:21pm
post #7 of

AEveryone has the right to set their own prices, and I'm a firm believer that new, inexperienced decorators SHOULD be charging less. After all, what is a "cake wreck" worth?

jason_kraft Posted 23 Sep 2013 , 8:25pm
post #8 of

A

Original message sent by BrandisBaked

Everyone has the right to set their own prices, and I'm a firm believer that new, inexperienced decorators SHOULD be charging less. After all, what is a "cake wreck" worth?

Prices should be based on cost and quality, not experience. If an inexperienced decorator happens to have innate talent and can produce a similar quality cake as efficiently as an experienced decorator there's no reason the inexperienced decorator should charge less.

SwtCanuck Posted 23 Sep 2013 , 9:27pm
post #9 of

You know it's not even really the prices that bug me. As someone else said they will burn out from over work and underpayment. My problem is with the Un-Licensed. In my province you are not legally allowed to charge anything for anything that comes out of your house, period. When I was starting I gave my friends and family tons of cake for free so I could become good at what I was doing. When I was ready to start charging I went through the proper paperwork and fees associated with opening a business. So that is what my vent is about. I realize there is enough work for many decorators in my community (on average I do 5 orders a weekend on top of my full time job) but please do it legally!

kikiandkyle Posted 23 Sep 2013 , 9:53pm

AI think it partly is ignorance, we see so many people on here who think it's ridiculous when we tell them that they can't just sell their $20 cakes on Craigslist because it's just a hobby, they think that because they don't have a shop they're not really in business so the rules don't apply.

howsweet Posted 23 Sep 2013 , 10:37pm
Quote:
Originally Posted by SwtCanuck 
 

Just need a place to vent. I own a licensed custom bakery. Put alot of hard work and money into making my dream a reality. I charge in the upper middle of the road for my creations. Probably could charge a bit more but I don't have huge overhead costs.

So I am getting frustrated when I hear brides asking for quotes then come back with "A lady told me she can do it for less than $2 per slice" I know people need to start somewhere and charge accordingly but come on! Ugg! How are you making money at that price point??

I am not trying to compete with Costco. I make a great tasting cake and am very busy with the orders I get. I'm just getting frustrated with all these "home based non-licensed bakeries". In BC you must be licensed by the city and inspected by the health unit and you are not allowed to advertise until the paper work is filled out. It just frustrates me.

Thanks for letting me get it off my chest :cake:

 

It sounds to me like you're less upset with the unlicensed and more upset with home bakers who are:

1) too clueless to know what the heck they are doing

2) too irresponsible to find out and

3) too selfish to care how their actions may be effecting others.

 

MeSasa1978 Posted 23 Sep 2013 , 10:45pm

I hear you!

My situation is difficult -- I'm that baker just starting out. I gave away a LOT of freebies, and I'm still in that spot.

I'm 100% ready to start the application process to be a "real" business, but I'm running into red tape. I contacted my county health department -- I'm in NE Ohio -- and they referred me to a person with a .utah address. I asked THAT individual whether he was the person I needed to contact to obtain a license for Ohio. He replied that he was (go fig) and that he needed more information. I gave him all my info regarding my business, and he hasn't replied. So now I'm back to square one. I, like you, work full time, so doing things during "business hours" usually involves email communications. I'm getting REALLY frustrated!

Whirlwind Posted 23 Sep 2013 , 10:51pm

AOn the other hand, what if a person can't afford to give away cakes for free or pay for a license without even practicing, how are they supposed to get anywhere? I'd understand if you were mad about the pricing issue, but what difference does it make to you whether or not a person is doing it illegally If they're selling a lot of cakes, they'll eventually get caught and have to pay for it And if they aren't doing a lot of cakes, then really, what difference does it make? I'm not saying it's ok to do it illegally, but that's the persons business.. Why get frustrated over it

jason_kraft Posted 23 Sep 2013 , 10:53pm

A

Original message sent by Whirlwind

On the other hand, what if a person can't afford to give away cakes for free or pay for a license without even practicing, how are they supposed to get anywhere?

They can save money until they have enough to launch a business the right way.

scrumdiddlycakes Posted 23 Sep 2013 , 11:00pm

Quote:

Originally Posted by SwtCanuck 
 

You know it's not even really the prices that bug me. As someone else said they will burn out from over work and underpayment. My problem is with the Un-Licensed. In my province you are not legally allowed to charge anything for anything that comes out of your house, period. When I was starting I gave my friends and family tons of cake for free so I could become good at what I was doing. When I was ready to start charging I went through the proper paperwork and fees associated with opening a business. So that is what my vent is about. I realize there is enough work for many decorators in my community (on average I do 5 orders a weekend on top of my full time job) but please do it legally!

I'm from good old Slurrey, lol, sooo many unlicensed kitchen there.

Sadly, it's just one of those things you have to deal with in this industry, doesn't mean you have to like it though.
I knew a lady in Kits who was a total hag, but I kind of loved her, she would spend her day off reporting illegal bakers she found on FB and craigslist, lol.
It's a nasty place to get in trouble for it, $10k fine, and they often won't give you a cease and desist first, I know of quite a few who got slammed with the fine right away. It is a $10k fine if you get caught, sometimes they will give you a warning, often they just fine you straight away. I can't imagine baking a few illegal cakes is worth that.

 

It is a very difficult province to get legal in, not excusing illegal kitchens, but it makes more sense that there would be so many there.

Here in WA they have a cottage food law, a couple hundred dollars and a bit of time is all it takes, but there are still people too lazy and irresponsible to do it.

howsweet Posted 23 Sep 2013 , 11:15pm

The restrictions are really tough here in Texas on home bakers. You have to include info on what allergens are in it and where it was made, but you can bring your cat along on deliveries. Now while I can't believe that anyone would bring a cat on a cake delivery, a health dept employee in opposing some changes to the existing law got up  at the state health committee hearing this year and stated that she'd had many complaint calls of people bringing their dogs, and specifically cats, along on deliveries and the law didn't give her the right to do anything about it.

 

Oh, and you have to take a $20 class explaining you shouldn't squeeze raw hamburger juice into your icing.

scrumdiddlycakes Posted 23 Sep 2013 , 11:29pm

Quote:

Originally Posted by howsweet 
 

The restrictions are really tough here in Texas on home bakers. You have to include info on what allergens are in it and where it was made, but you can bring your cat along on deliveries. Now while I can't believe that anyone would bring a cat on a cake delivery, a health dept employee in opposing some changes to the existing law got up  at the state health committee hearing this year and stated that she'd had many complaint calls of people bringing their dogs, and specifically cats, along on deliveries and the law didn't give her the right to do anything about it.

 

Oh, and you have to take a $20 class explaining you shouldn't squeeze raw hamburger juice into your icing.

Yum, I love me some undercoat with my ganache.

vldutoit Posted 23 Sep 2013 , 11:57pm

I live in Texas and recently became licensed.  For the past year I have given buttloads of free cake away because I refused to charge (even for ingredients) when I was not legal to do so.  I concentrated on making a good quality product that I knew that I could charge a fair and decent price for.  The actual cost to me for the class was $15, I did it through Texas A&M University and it was all online.  Last week a lady came into my workplace trying to sell mini muffins that she baked because "she just liked to bake".  She had a label on the three mini muffins she was selling for $1 but I took one look and knew she wasn't licensed. I handed it back to her and said I wasn't interested.  If I were starving to death I would not have bought them out of principle.  They spend more money on fancy labels than it would cost to be able sell the product legally!!!

Cakespirations Posted 24 Sep 2013 , 12:05am

Quote:

Originally Posted by scrumdiddlycakes 
 

Yum, I love me some undercoat with my ganache.

 

OMG I just died laughing at this

howsweet Posted 24 Sep 2013 , 12:05am

Quote:

Originally Posted by vldutoit 
 

I live in Texas and recently became licensed.  For the past year I have given buttloads of free cake away because I refused to charge (even for ingredients) when I was not legal to do so.  I concentrated on making a good quality product that I knew that I could charge a fair and decent price for.  The actual cost to me for the class was $15, I did it through Texas A&M University and it was all online.  Last week a lady came into my workplace trying to sell mini muffins that she baked because "she just liked to bake".  She had a label on the three mini muffins she was selling for $1 but I took one look and knew she wasn't licensed. I handed it back to her and said I wasn't interested.  If I were starving to death I would not have bought them out of principle.  They spend more money on fancy labels than it would cost to be able sell the product legally!!!

Are you saying you are opening up a licensed kitchen? Because there is no licensing for home bakers in Texas.

morganchampagne Posted 24 Sep 2013 , 12:06am

AI bake under the cottage food law and I had the sense to wait until I had all my ducks in a row. I didn't give cakes away. I practiced and threw them out. Made them for thanksgiving. There are slot of ppl out here not following the rules. And undercharging. I just let them go. They'll burn out and go away. Not making money will take care of that.

vldutoit Posted 24 Sep 2013 , 12:22am

No, from my home.  I got my certificate, sorry wrong word there.  My point is, it isn't hard nor expensive, yet people do it anyway.

howsweet Posted 24 Sep 2013 , 12:25am

Quote:

Originally Posted by vldutoit 
 

No, from my home.  I got my certificate, sorry wrong word there.  My point is, it isn't hard nor expensive, yet people do it anyway.

Sorry to point it out, I was just afraid it would mislead someone. Though I'm not sure why I care - it's not like I need more competition! :D

FrostedMoon Posted 24 Sep 2013 , 12:25am

AI absolutely get it! It really irks me that someone can take the easy way (unlicensed) and reap the same benefits I worked hard to earn (license, tons of practice, safety course). I don't like to see anyone fail, but I'd like to think there is more if a benefit from following rules and working hard.

kikiandkyle Posted 24 Sep 2013 , 12:27am

AI'm also in Texas but I moved here from Illinois where I couldn't even think about baking from home unless it was for a farmers market. I've been giving away cakes while getting ready to start things more professionally, it's just not worth the risk for a couple of dollars profit.

There are so many cheap home bakers here though, I recently left a Facebook group because the constant posts about how they needed to give away their cakes for pennies to get business were driving me crazy.

jason_kraft Posted 24 Sep 2013 , 12:28am

AOf course the flip side to making licensing too easy is it erases barriers to entry, so people can set up shop legally without having to stop to think about pricing that makes sense.

vgcea Posted 24 Sep 2013 , 12:56am

A

Original message sent by kikiandkyle

I'm also in Texas but I moved here from Illinois where I couldn't even think about baking from home unless it was for a farmers market. I've been giving away cakes while getting ready to start things more professionally, it's just not worth the risk for a couple of dollars profit.

There are so many cheap home bakers here though, I recently left a Facebook group because the constant posts about how they needed to give away their cakes for pennies to get business were driving me crazy.

And I can imagine business is "booming" and they're booked solid. Never mind that they may not be making any profit.

kikiandkyle Posted 24 Sep 2013 , 1:23am

AThere was one from someone who said a dozen cake pops cost them $6 in supplies and took six hours to make. She wanted to reduce her price from $25 to $15, because she wasn't getting any orders. Sorry but I'm not working for $1.50 an hour for anyone.

howsweet Posted 24 Sep 2013 , 1:40am
Quote:
Originally Posted by jason_kraft 

Of course the flip side to making licensing too easy is it erases barriers to entry, so people can set up shop legally without having to stop to think about pricing that makes sense.

Yep, and next time around if there's a movement to require home kitchens to be inspected and licensed here, I will consider supporting it.

Quote:
Originally Posted by kikiandkyle 

I'm also in Texas but I moved here from Illinois where I couldn't even think about baking from home unless it was for a farmers market. I've been giving away cakes while getting ready to start things more professionally, it's just not worth the risk for a couple of dollars profit.

There are so many cheap home bakers here though, I recently left a Facebook group because the constant posts about how they needed to give away their cakes for pennies to get business were driving me crazy.

What a coincidence, same here but it was some time ago. They had this leader person that they all worshiped and she hated my guts. Right after I'd post my price on a cake price question, she'd be sure and post something significantly less. Otherwise she ignored those threads - she was trying to protect her flock from my silly, crazy pricing help.  On the other hand, she'd repeat things I said and take credit - a real piece of work.  As far as I know, I was the only professional in the group. At the end, I was so tired of casting my pearls before, well, not swine, it was more like the unappreciative.

kikiandkyle Posted 24 Sep 2013 , 2:59am

AWe're just too professional :-D

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