DeliciousDesserts Posted 9 Oct 2013 , 7:05pm
post #1 of

I'm sure, at some point, this post will get lost in the archives, but it's worth a shot.  I really do like to help people.  I believe that knowledge is power.

 

Most of us agree that tossing a number at someone, who asks how to price a cake, does them a disservice.  I'm in the teach a man to fish boat so to speak.

 

Here is my heartfelt and knowledgeable advice.  In order to set your pricing, you really do have to do your homework.  Sit down & write a list of every single thing your hands touched while making that last cake.  Did you use a hand towel?  Do you have to wash that towel?  Aprons, hand soap, dishwasher, dish soap, oven, water, trash can....EVERY single thing no matter how small it may seem.  Of course, you will also add the cost of ingredients.  If you are a legal business, you will need to add the cost of licensing and insurance.  This should, quite frankly, be a very very long list.  

 

You should also do some research into your competition.  Found someone with comparable skills as yours and check to see how much they charge.  Don't copy this!!  It's possible they are not charging correctly.  It will, however, give you valuable information in comparing.

 

Some people will encourage you that home bakers or Cottage Food Law bakers shouldn't charge the same as a brick & mortar bakery.  Really?  My question is do you have the same costs?  Sure, you don't have the same lease payments.  You also don't get the discounts of purchasing power.  I'm not saying they equal out.  The only way to know is to have an accurate accounting of your true cost.

 

Remember that the goal is to make a profit.  Covering costs does not equate to a successful business.  Sure you want to make people happy, you want them to enjoy your cake.  As a business, you should also make a profit.  We aren't talking price gouging, but you really do deserve to make a profit.  Stop feeling guilty about it!

 

You don't have to have a masters in business, but I do recommend you at least have a business plan.  At the very least, educate yourself about the true costs of producing your cake.

 

I also think it is a good idea to show the diversity of the different areas.  Cost of ingredients, skill level, & location vary all across the globe.

 

We were once able to share in a wonderful thread where people took turns stating how much they would charge for a cake.  I'd like to try that.  My next post will be the guidelines for participation.  I hope you all will join me.  

114 replies
DeliciousDesserts Posted 9 Oct 2013 , 7:08pm
post #2 of

Guidelines:

 

1.  This is to gain perspective on the ranges people charge throughout the world.This is not an opportunity for someone to tell anyone else what they "should" charge.  Please don't post with that intent.  I have no pull, but I will ask a Mod to delete it.

 

2. Be specific about the details.  We will need to know size, flavor, & filling

 

3. Costs should not include tax or delivery

 

4. Allow at least 5 responses before adding a new cake.  The whole point is to gain perspective of the variations in cost.

 

5. Be nice & be fun.  This really can work.

DeliciousDesserts Posted 9 Oct 2013 , 7:33pm
post #3 of

I will start the discussion with this recent cake:  

 

 

700

 

In reality, the cake was a dummy cake made for a photo shoot for Charleston Weddings Magazine.  It is a 6" four layer, 8" six layer, & 12" five layer.  The listed flavor for all tiers was White Vanilla with layers of chocolate ganache, mocha buttercream, and white chocolate mousse.

 

All tiers are covered with fondant.  The stripes are fondant, and the flower is a mix of fondant & gumpaste.  The flower was edged with gold luster airbrush.

 

I would have charged a client about $740 for this cake before tax & delivery

ddaigle Posted 9 Oct 2013 , 7:46pm
post #4 of

Awesome DD...This will be fun....also to show how different cost of living areas vary.   I would probably charge $575. 

Rosie93095 Posted 9 Oct 2013 , 8:26pm
post #5 of

In our area that cake would be around $500.By the way, Beautiful Cake!

melmar02 Posted 9 Oct 2013 , 9:06pm
post #6 of

AI would charge between $550 and $600.

jennicake Posted 9 Oct 2013 , 9:10pm
post #7 of

Just a suggestion to keep this easier to manage (love the idea btw!)... is it possible to create a new album in the gallery for the purpose of this thread?  People can post the picture and everyone can add their comments on what they would charge?  I can see the potential for this thread to get confusing and then forgotten as it grows and that would be a shame.  

ApplegumPam Posted 9 Oct 2013 , 9:15pm
post #8 of

I would charge $850 - but this takes into account higher 'costs' in Australia

Also our serving sizes are smaller - and if we use extended tiers (like your middle one) there is normally a board in the middle so you effectively have double the servings for that tier.

Not sure about the 5inch tier (base)  Guess that would have to be single serves ??

What do you guys do when you have varying height cakes when it comes to serving?

howsweet Posted 9 Oct 2013 , 9:17pm
post #9 of

I would ask the question who are you asking to give prices?  It seems to me we're going to get prices across the board not necessarily based on any real knowledge of what prices should be. 

 

In regards to cost, it's very important, but the only way to know how much to mark up a cake is to know what the market will bear.  In my opinion a good many home bakers are not going to figure costs - period.  No matter how much they are harped on to do so.  But since they are going to proceed anyway, we might all be better served if they charge in line with what brick and mortar bakeries charge for similar work. A brick and mortar bakery is forced by market conditions to price appropriately.

 

I've seen "free market system" brought up in defense of charging very low prices, but the free market and federal trade laws are built on the assumption that people will seek the highest value they can, but it doesn't work when folks don't endeavor in their own best interest. And that's what's happening.

 

Anyway, I would charge $725 for that cake.

DeliciousDesserts Posted 9 Oct 2013 , 9:21pm

Quote:

Originally Posted by jennicake 
 

Just a suggestion to keep this easier to manage (love the idea btw!)... is it possible to create a new album in the gallery for the purpose of this thread?  People can post the picture and everyone can add their comments on what they would charge?  I can see the potential for this thread to get confusing and then forgotten as it grows and that would be a shame.  

 

 

That's a great suggestion.  Since I'm not part of Cake Central, I couldn't create one that would allow other people to post cakes to it.  I can, however, suggest that Cake Central add that as a category.

DeliciousDesserts Posted 9 Oct 2013 , 9:21pm

Quote:

Originally Posted by Rosie93095 
 

In our area that cake would be around $500.By the way, Beautiful Cake!

Thank you! 

DeliciousDesserts Posted 9 Oct 2013 , 9:23pm

Quote:

Originally Posted by ApplegumPam 
 

I would charge $850 - but this takes into account higher 'costs' in Australia

Also our serving sizes are smaller - and if we use extended tiers (like your middle one) there is normally a board in the middle so you effectively have double the servings for that tier.

Not sure about the 5inch tier (base)  Guess that would have to be single serves ??

What do you guys do when you have varying height cakes when it comes to serving?

 

 

Pam, I would serve the 5 layer as singles.  For 6 layers, I ask the couple if they prefer dividing in the middle (3 layers) or reg (4 layers) and 1/2 (2 layers).

kikiandkyle Posted 9 Oct 2013 , 9:26pm

APerhaps you could ask people to provide the price per serving as well, I think that helps smaller bakers understand why the prices can seem so high.

DeliciousDesserts Posted 9 Oct 2013 , 9:28pm

Quote:

Originally Posted by howsweet 
 

Howsweet, I'm trying to quote you but having trouble.

 

Those are very good points.  

 

Quote:  "

I would ask the question who are you asking to give prices?  It seems to me we're going to get prices across the board not necessarily based on any real knowledge of what prices should be. 

 

In regards to cost, it's very important, but the only way to know how much to mark up a cake is to know what the market will bear.  In my opinion a good many home bakers are not going to figure costs - period.  No matter how much they are harped on to do so.  But since they are going to proceed anyway, we might all be better served if they charge in line with what brick and mortar bakeries charge for similar work. A brick and mortar bakery is forced by market conditions to price appropriately.

 

I've seen "free market system" brought up in defense of charging very low prices, but the free market and federal trade laws are built on the assumption that people will seek the highest value they can, but it doesn't work when folks don't endeavor in their own best interest. And that's what's happening.

 

Anyway, I would charge $725 for that cake."  end quote

 

I think everyone should offer what they would charge so that we can all see just how different that number can really be.    Very good point about the market.  Very good & very valid points on several counts.

 

Sadly, I can't make the fisherman drink the water.  Yes, I know I am mixing metaphors.  All I can do is offer some advice.  As always, they can choose to use it or leave it.

 

Even more sadly, the market is often influenced by those not knowing the true costs and undervaluing their own work.  

DeliciousDesserts Posted 9 Oct 2013 , 9:30pm

Quote:

Originally Posted by kikiandkyle 

Perhaps you could ask people to provide the price per serving as well, I think that helps smaller bakers understand why the prices can seem so high.

 

 

Good point.  Especially on the cake I used as an example.

 

The reason I didn't use that is that people use varying charts.  Using the chart I like, that cake serves 105.  I calculated that by 12" serving 51 + 13 extra servings per layer, 8" serving 20 + 10 extra servings for 2 layers, & 6' serving 11.

howsweet Posted 9 Oct 2013 , 9:38pm
Quote:
Originally Posted by DeliciousDesserts 
 

Howsweet, I'm trying to quote you but having trouble.

 

Those are very good points.  

 

I think everyone should offer what they would charge so that we can all see just how different that number can really be.    Very good point about the market.  Very good & very valid points on several counts.

 

Sadly, I can't make the fisherman drink the water.  Yes, I know I am mixing metaphors.  All I can do is offer some advice.  As always, they can choose to use it or leave it.

 

Even more sadly, the market is often influenced by those not knowing the true costs and undervaluing their own work.  

Thanks, and yes, so sad. Your last sentence gets to the heart of the matter. Well, count me in. I'm happy to try to help!

howsweet Posted 9 Oct 2013 , 9:42pm

I wanted to add some info about $725 price I quoted. Please don't assume I don't live in a high cost of living area. My city is always on those lists of cheap places to live.  Also, what helped the price up was the ganache because good chocolate is very expensive and also the labor for the chocolate mousse filling. 

morganchampagne Posted 9 Oct 2013 , 11:19pm

I am at about $695. I live in a suburb of Houston, if that is relevant. 

 

As howsweet stated, good chocolate is expensive. I use Valhrona and Callebaut exclusively. Also, correctly done mouse is labor intensive. 

 

I dont make sugar flowers, I almost always buy them from somewhere. 

howsweet Posted 9 Oct 2013 , 11:42pm
Quote:
Originally Posted by morganchampagne 
 

I am at about $695. I live in a suburb of Houston, if that is relevant. 

 

 

If that's relevant...The prevailing word on the boards is that prices always vary dramatically based on location. Vary, yes, but dramatically? I'm not sure why that would be. I mentioned location because I didn't want someone to assume I must live in some area known for a high cost of living.

 

I tried to discuss the issue with someone who thought she'd proved her case (wildly varying prices) because she mentioned prices are higher on Rodeo Dr. than other areas.  She didn't take into account that the product is different there also. Versace doesn't take it's product and try to sell it in a slum neighborhood. If we're selling high end cakes, we have to sell to the high end customer. Otherwise, the "customer" devalues our product - "You want how much for that cake?"

ApplegumPam Posted 9 Oct 2013 , 11:53pm

Quote:

Originally Posted by howsweet 
 
If we're selling high end cakes, we have to sell to the high end customer. Otherwise, the "customer" devalues our product - "You want how much for that cake?"

AND it IS OK that not everybody can see the value in a custom made cake - we should NOT be trying to make it accessible to everybody!!

The whole logic of.... I just want to make them happy.....I love to decorate AND its all practice.... everybody should be able to have a nice cake....    so NOT true!

There are loads of different cars on the road..... but you don't see the Ferrari dealers trying to sell 500 per week

 

sixinarow Posted 10 Oct 2013 , 12:07am

Quote:

Originally Posted by ApplegumPam 
 


There are loads of different cars on the road..... but you don't see the Ferrari dealers trying to sell 500 per week

 

Preach it sista.

I would be $625

-K8memphis Posted 10 Oct 2013 , 12:09am

this is a great thread--and a refreshing change

 

so far there are 8 responses which range from $500 to $850 and thisreveals an average global price of $673.13 

 

if we toss the top & bottom numbers the average total is $673.13--so seems pretty accurate

 

at 105 servings that's an average global price of $6.41 per serving ranging from $4.76 to $8.09 

 

love the kinder gentler approach

 

no attempt at price setting is being implied or recommended in any way--this is just the plain math if my math is correct

 

edited to say--i did not include sixinarow's  $625 but that is only fifty bucks off the average

soldiernurse Posted 10 Oct 2013 , 12:11am

AThank you deliciousdesserts! Thank you, thank you, thank you! Finally! This will help so many cakers with this question and they can simply be referred to YOUR thread for this invaluable tool! Thanks again for taking the time to do this! I, however, have nothing to add because I'm a hobby baker with no interest in selling but the need is there for others:D

ApplegumPam Posted 10 Oct 2013 , 12:30am
Quote:
Originally Posted by soldiernurse 

Thank you deliciousdesserts! Thank you, thank you, thank you! Finally! This will help so many cakers with this question and they can simply be referred to YOUR thread for this invaluable tool! Thanks again for taking the time to do this! I, however, have nothing to add because I'm a hobby baker with no interest in selling but the need is there for others:D


My ONLY fear is that people will STILL use this as the 'Lazy Cakers Guide to Pricing'  - they will look at a picture of a cake that theyTHINK resembles what they are going to do - will see that the average price quoted is $600 and run off and charge that ......   trouble is .... it COULD be worth $100  OR nothing!

I am constantly amazed by what people consider 'sale-worthy'  !!   is that a word?   anyways what I mean is that as many people OVERCHARGE for their work as those that undercharge.

Some cakes should NEVER leave the kitchens they came from - don't want this to sound nasty - but I have seen far too many gushy comments on cakes that are quite clearly.......    cake wrecks!!

Gourmet Whisk Posted 10 Oct 2013 , 12:36am

AI worked my pricing breakout sheet and came up with $500 also. That makes me feel a little bit better because estimates are my weak point. While I want to be fair and make money, I also want to grow a business that will financially support me too. I currently work out of my own kitchen but I have outgrown it already and feel that a small shop out back is in the near future. While I dont see myself EVER having a store front, because I feel that would become restricting, to have a detached shop will also affect pricing. My dad stresses to "set pricing in the middle" Set my pricing where I can operate in a detached shop and what it cost me at this moment and find the "average/median." That's what I have done (estimated the utilities and cost of the shop over 5 years depreciation) and then if I have miscalcuated, my hike is not as serious or substantial. The only thing I can't figure in as a pro-rating cost is the cost of materials. Milk, eggs and butter have all doubled in the past 6 months and that has really affected my profits. I may look at raising prices next few months by 8% if it continues. It is hard because I know my pricing is "fair" by what's in the area...it just all seems high to me and always has....

morganchampagne Posted 10 Oct 2013 , 12:55am

AExpanding on a point that Pam made....

People are not entitled to the fanciest cakes they see on the Internet if they don't have the budget. You're running a business. It's not "cut throat" or "unfair" to set a price and not budge on it.

If you don't see what I mean here's an example. You would like car. You want a Benz but you can realistically afford a Honda with a few upgrades if possible. The dealership is not going to say "Gee you're such a nice person! I'm gonna let you drive away in the Benz at the price of a Honda"

Your cake is a custom cake. Charge accordingly. You're not in the business to do favors. You're yrying to make money.

I hope that this doesn't sound harsh. I'm not lecturing.

kikiandkyle Posted 10 Oct 2013 , 1:20am

AFair works both ways and I think people forget about that sometimes. Is it fair to make $1 an hour? Especially when it's for someone who had the gall to throw a party for 250 people?

Elcee Posted 10 Oct 2013 , 1:34am

Quote:

Originally Posted by DeliciousDesserts 
 

I will start the discussion with this recent cake:

 

 

700

 

In reality, the cake was a dummy cake made for a photo shoot for Charleston Weddings Magazine.  It is a 6" four layer, 8" six layer, & 12" five layer.  The listed flavor for all tiers was White Vanilla with layers of chocolate ganache, mocha buttercream, and white chocolate mousse.

 

All tiers are covered with fondant.  The stripes are fondant, and the flower is a mix of fondant & gumpaste.  The flower was edged with gold luster airbrush.

 

I would have charged a client about $740 for this cake before tax & delivery

My current price for a cake similar to this would be $368 (104 servings at $3.25 + $30 for the flower and horizontal stripes). AFTER January 1 when my price increase goes into effect, $425. As an aside, I can't sell a cake with mousse, so it would have buttercream filling. I live in a relatively low cost of living area, and it's also somewhat unsophisticated, too, I've NEVER had anyone want ganache :(, Hazelnut Buttercream with a mocha cake is daring!. My prices are about in the middle of what the market is here. Of the decorators who charge more, many of them don't charge delivery

scrumdiddlycakes Posted 10 Oct 2013 , 1:42am

For the cake posted, I would be $709.50, going from a quick look at my recipe costs and what I know of my overhead and time management.

For those that were wondering, that works out to $6.45 a serving, and as other have mentioned, the chocolate I use has a big impact on that price.

 

I was shocked the very first time I properly priced out a cake. It was one I did for free, and I had estimated it would cost me $130 out of pocket, not including gas for delivery.

It worked out to about $300, and that was a freebie, so didn't include any of the costs I acquired after becoming legal and insured.

 

I am also not willing to work for minimum wage, and certainly not below it! I would never ask a mechanic to fix my car, and just charge me supplies plus $50, which in reality, is what so many decorators are charging.

By doing that, they are forcing others in their same profession to have to compete with below min wage.

 

I do agree with Pam in regards to overcharging for some cakes too, and this is not in any way directed at anyone, but there are cakes being sold that have no business being sold.

A huge part of being able to demand a fair wage for your work, is being able to produce a high quality product, consistently.

morganchampagne Posted 10 Oct 2013 , 2:44am

AFor discussions sake...can we just put random pictures of cakes up and say what we would charge? Or do they need to be our own work? I think that as discussions progress maybe we could add cakes with increasing elements to it.

I may be thinking too long term lol

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