swtangel102 Posted 21 Dec 2013 , 10:52pm
post #1 of

Hi all!  Was wondering if anyone here makes cakes and sells them from home.  I'm still not certain with pricing for cakes.  I have set prices but many people have told me that I don't charge enough.  I'm not looking to charge and arm and a leg like bakeries, but at the same time I would like to cover my ingredients and some of my time (if not all). I also read up that you shouldn't price too low because it is unfair to all others who are in the industry and I totally get that.  I just want to find a fair price for customers and myself. I want to see what other people out there roughly charge and if I am okay or need to raise prices a bit up.  Everything I made is from scratch.  TIA.

 

This is a cake I made recently, how much would you charge?  It's a 6inch with custard filling...non dairy.  

 

*

106 replies
ApplegumPam Posted 21 Dec 2013 , 11:11pm
post #2 of

Not charge an arm and a leg like a bakery???

 

You are smart, just DONATE your cakes - it seems to be the latest trend

swtangel102 Posted 21 Dec 2013 , 11:28pm
post #3 of

Well, I'm sorry if I offended you or anyone else.  Thats not my intention.  I'm new to all this and it's just many of my friends have tried bakeries that charge a lot for something simple and doesn't even taste good and they've complained. That is one of the reasons why I decided to start my own at home, trying to make more affordable cakes as I don't have to pay rent and stuff.  But I also want to be fair to myself and others in the industry that is why I am seeking suggestions and advice.  

ApplegumPam Posted 21 Dec 2013 , 11:44pm
post #4 of

I am not offended - but I sure as heck don't understand YOUR logic...... bakeries charge a LOT for something simple?????

Why don't you explain to me HOW you calculated what they should charge?   you quite obviously THINK it is TOO much.... so you must have some justification for this thought process.

 

A 'stay at home mum'  discount???    THIS idea is the opposite of reality!    

A bakery SHOULD be able to do it CHEAPER - if you think they are too expensive - then I fear there is really NO way you can even think of selling your cakes...... donation is the ONLY way..... you may not realise it YET but you WILL be paying people to make their cakes

swtangel102 Posted 21 Dec 2013 , 11:50pm
post #5 of

WOW...I was merely coming on to get some advice and suggestions not get yelled at.  I'm not here to start something.  My friend had a 6 inch cake covered with white fondant and just a flat piece of fondant in the shape of this character she liked with a happy birthday on it for $140.  I don't know if you think that's a fair price, but I don't really.  But I wouldn't charge too low either.  And I never mentioned how much I would charge so why would you assume I charge so little to a point I should just donate?  I'm trying to be polite here, so I would ask you to be a bit more respectful as well?  Thank you!

swtangel102 Posted 21 Dec 2013 , 11:54pm
post #6 of

To me, if someone clearly doesn't really understand something and is seeking advice, I would kindly educate them and not lash out at them.  I'm new to all this and I thought this was what this forum would be good for.  To learn and gain experience.  I know I might have worded it in a way that could be taken in the wrong way but like I said, I didn't mean to cause any s*** here. 

Stitches Posted 22 Dec 2013 , 12:06am
post #7 of

swtangel102, this topic has been discussed to DEATH here! There is tons and tons of information at this website on pricing, plus links to other places teaching about pricing.

 

We all know your new here by the number of posts you have. So, before you get tangled in not understanding the lack of welcome for your topic use the search box on the top right side of each page. Search for pricing info. and pricing topics.........and you can read and learn from thousands of posts on that topic.

 

Once you spend a little time reading and understanding pricing you'll understand why this is a hot button topic here....and why no one really welcomes new posters talking about not charging as much as a bakery, or baking illegally from home.

ApplegumPam Posted 22 Dec 2013 , 12:09am
post #8 of

People that have been on this site a little longer than you would be aware of my writing style - so I apologise if you interpreted the odd words in caps as 'yelling'.

It is a common mistake -  A whole post in caps IS yelling...........    where a few words are in caps - it is a way of placing emphasis on words.

I'm not here to start a war with you either - but I do want to TRY and understand your thought process - thats why I asked you to explain it.

I don't NEED to know what you are charging to make my judgement - you had already said you wanted to price lower than bakeries who you thought were charging TOO much.

To understand pricing - you need to think about it differently.  You are just looking at the end price and not much else


Lets do a little exercise - just so you can see that I DO want to help you understand WHY $140 is probably a fair price and for lots of decoraters would be a lot more.

 

 

  • It takes the same amount of time to prepare a small cake for baking as a large cake
  • It takes the same amount of time to wash/clean up for a small cake as a large cake
  • It takes the same amount of fuel/car usage to shop for ingredients for a small cake as a large cake
  • Often have to factor in more waste - especially if you are a 'stay at home mum' with LESS orders than a bakery churning our multiple cakes per day.

 

I could go on and on - but I am not sure it is what you want to hear.    For the reasons above AND many others - you need to adopt a 'minimum charge' - ie  What is the minimum amount of money you determine is your 'worth it' benchmark?   The price is your LOWEST possible price, regardless of the order!!
So for me ..... if you want to purchase ONE CUPCAKE from me - it will still cost you the same as a 9inch round... because that is about the equivalent of my minimum charge.... and YES it is more than $140

I think $140 IS a fair price and dare to suggest that after you have slaved in your kitchen for a number of years you may very well come to agree with me - but for now ....    charge what you think IS fair..... but PLEASE do some calculations first.   

You need to add up all your insurances, business expenses, and everything else that needs to be in place before you sell one cake..... divide that by the number of cakes you made last year - and then add that cost to EVERY order...... the MORE cakes you make the less you need to add - but if you only sell 6 cakes per year - they need to cover the expenses or you are running at a loss.

There are LOADS of hidden costs that new cakers aren't even aware of when they first consider pricing

-K8memphis Posted 22 Dec 2013 , 12:12am
post #9 of

and while you are at it--with all due respect please also look up 'copyright' on the search function on here for another important issue

 

easy does it--no worries

swtangel102 Posted 22 Dec 2013 , 12:27am

Okay!  Thank you for that information.  I just started a year ago and I've been trying to do research and find out more and that is why I joined this forum.  What you just explained to me is something I never really thought about so I want to say thank you and I appreciate that. That at least helps me to make some reasonable changes.  I factor in my ingredients, time to make the cake and I think my problem is I only charge little for the time I put in to the cakes. 

 

Thank you Stitches for the information provided.  I will definitely look into it.  My mom has a business passed down to me.  She used to have her own business and made cakes from home as well.  But back then was a long time ago so she wouldn't know anything about the cakes today, that is why I am seeking help here.  

 

K8memphisis - Thank you!  No I understand the copyright part.  I just made that cake for my friend.  But I was just wondering what cake that size with the ingredients I used would be an appropriate price.  

ApplegumPam Posted 22 Dec 2013 , 12:55am
Quote:
Originally Posted by swtangel102 
 

Okay!  Thank you for that information.  I just started a year ago and I've been trying to do research and find out more and that is why I joined this forum.  What you just explained to me is something I never really thought about so I want to say thank you and I appreciate that. That at least helps me to make some reasonable changes.  I factor in my ingredients, time to make the cake and I think my problem is I only charge little for the time I put in to the cakes. 

 

Thank you Stitches for the information provided.  I will definitely look into it.  My mom has a business passed down to me.  She used to have her own business and made cakes from home as well.  But back then was a long time ago so she wouldn't know anything about the cakes today, that is why I am seeking help here.  

 

K8memphisis - Thank you!  No I understand the copyright part.  I just made that cake for my friend.  But I was just wondering what cake that size with the ingredients I used would be an appropriate price.  



Thanks for realising that we were trying to help - all too often these threads spiral out of control because somebody comes on here asking what theythink is a simple question but they LOAD it by saying.... oh I don't want to charge as much as those others!   - it gets interpreted as "oh those bakeries are ripping people off"

When the reality is ....   the person that thinks they are too expensive just hasn't done their homework

It is refreshing to see you come back and admit you were wrong - you will get much more help this way !!

Things have changed a lot over the years and what your mother may have been able to do will be a LOT different today - there are loads more regulations in place and many. many. many more people in a position to be competiton.   That doesn't mean you can't make a go of it ..... it does mean you have to have something MORE to offer than PRICE alone... if the only way you get customers is to be cheaper than soembody else - you will only end up tired and broke!

Where abouts are you located?

kikiandkyle Posted 22 Dec 2013 , 1:03am

If you want to make cakes as a favor for a few friends then charge what you want, but if you want to charge a fair price then remember that you also deserve to be compensated for your time and skill. You wouldn't dare to tell anyone else that could make a cake that looked like this that they should only be making $1 an hour to do it but you have decided that your own time is only worth that. 

 

If you want to make cheap 'affordable' cakes for your friends then you should look at ways to reduce the time and expense that goes into them - that might mean using lesser quality ingredients, and simpler designs etc, but custom cakes are a luxury, nobody is entitled to one. Don't think for a second that most people would spend 10-20 hours working for you for free any time you needed something from them.

Norasmom Posted 22 Dec 2013 , 1:13am

Pricing is hard. What do you think is a fair price for your cake?  That's what you should charge.  In some markets $140 is a lot for a small cake.  It all depends.  

ApplegumPam Posted 22 Dec 2013 , 1:17am

Quote:

Originally Posted by kikiandkyle 
 

If you want to make cakes as a favor for a few friends then charge what you want, but if you want to charge a fair price then remember that you also deserve to be compensated for your time and skill. You wouldn't dare to tell anyone else that could make a cake that looked like this that they should only be making $1 an hour to do it but you have decided that your own time is only worth that. 

 

If you want to make cheap 'affordable' cakes for your friends then you should look at ways to reduce the time and expense that goes into them - that might mean using lesser quality ingredients, and simpler designs etc, but custom cakes are a luxury, nobody is entitled to one. Don't think for a second that most people would spend 10-20 hours working for you for free any time you needed something from them.




THIS ^^^^^^  

Think about the cake you are making and then jot down EVERYTHING that needs to be done for that cake and price it as if you had to pay somebody else to do it for you.

 

You need to get ingredients for the cake?   How much would you need to pay somebody else to go and do that for you? (NOT just the ingredient cost)
Your kitchen looks like a bomb has hit it?   How much would it cost to 'hire' somebody to come and clean up and put everything back in its place?

I can guarantee you - you will be surprised at how quickly it adds up

swtangel102 Posted 22 Dec 2013 , 1:21am

I'm not the type to not admit when I've done something wrong but at the same time, I get annoyed when I feel people are just lashing out.  I understand your feeling as I'm an ECE and I know how it feels when people think we're just glorified babysitters.  But I guess rather than get myself upset and worked up I just try to explain to people and educate them.  So that's why with your first few posts I felt attacked and I didn't mean to start anything.  But anyhow, it's over and done with so we'll move on from here.

 

I read up on lots of bits and pieces here and there and I understand only so much.  I came on to get more insight.  Well I make everything from scratch and with the best ingredients possible and I put a lot of work and effort into my cakes which is probably why some of my friends say I charge too little.  I had a mother that was trying to get everything from me but the kitchen sink.  She wanted a two tier cake for 50-60 people for $100.  I told her it would be about $150, but because she said her design was simple I told her I could do $120.  I am not making my cakes cheap so that I can get more people.  It's not about the money for me.  Its just my problem...I feel bad charging people too much, and I know I have to work on that and get over it (hence why I am here).  At the same time I enjoy what I do so I don't feel a need to charge as much for my time?  

 

I work hard on my recipes so that not only does my cakes look good outside but taste good as well.  I want customers returning to me for that reason.  I am from Canada. My friends and I have tried many bakeries and I should have stated most (but not all bakeries).  I mean for my wedding cake I paid $450 and it was a small two tier cake but because the quality was good as well, I don't mind paying that much.  But some places the quality is not so good as well as the designs and that's why my friends and I feel at times its a rip off.  Do you understand what I'm trying to say?  I dunno, or maybe I should stop talking just in case...sorry I just speak what comes to my mind.  

ApplegumPam Posted 22 Dec 2013 , 1:27am

Quote:

Originally Posted by Norasmom 
 

Pricing is hard. What do you think is a fair price for your cake?  That's what you should charge.  In some markets $140 is a lot for a small cake.  It all depends.  


I disagree -


It might be a lot of money  for some people - that means they DON"T get a custom designed cake - pure and simple

As was stated earlier.... they are NOT meant to be for everybody

Charging what you think is 'fair' -  ONLY if you have somebody that is prepared to subsidise your busienss (ie give money away on a regular basis)


And this setting idea of setting what YOU think is a fair price .... is what has damaged the entire cake decorating industry - TOO many people are prepared to a) work for nothing   OR b)  are under this brainfog of ..... just want everybody to have a nice cake

The lowering of prices - the lowering of standards - the idea that everybody should have a fancy dancy cake.............    does the same apply to housing/cars/food?

If you can't afford the Top Shelf Fillet Steak you live on ground beef or rice............. the butcher doesn't charge you a FAIR price - he charges you what he needs to - to stay in business

ApplegumPam Posted 22 Dec 2013 , 1:36am

Quote:

Originally Posted by swtangel102 
 

I'm not the type to not admit when I've done something wrong but at the same time, I get annoyed when I feel people are just lashing out.  I understand your feeling as I'm an ECE and I know how it feels when people think we're just glorified babysitters.  But I guess rather than get myself upset and worked up I just try to explain to people and educate them.  So that's why with your first few posts I felt attacked and I didn't mean to start anything.  But anyhow, it's over and done with so we'll move on from here.

 

I read up on lots of bits and pieces here and there and I understand only so much.  I came on to get more insight.  Well I make everything from scratch and with the best ingredients possible and I put a lot of work and effort into my cakes which is probably why some of my friends say I charge too little.  I had a mother that was trying to get everything from me but the kitchen sink.  She wanted a two tier cake for 50-60 people for $100.  I told her it would be about $150, but because she said her design was simple I told her I could do $120.  I am not making my cakes cheap so that I can get more people.  It's not about the money for me.  Its just my problem...I feel bad charging people too much, and I know I have to work on that and get over it (hence why I am here).  At the same time I enjoy what I do so I don't feel a need to charge as much for my time?  

 

I work hard on my recipes so that not only does my cakes look good outside but taste good as well.  I want customers returning to me for that reason.  I am from Canada. My friends and I have tried many bakeries and I should have stated most (but not all bakeries).  I mean for my wedding cake I paid $450 and it was a small two tier cake but because the quality was good as well, I don't mind paying that much.  But some places the quality is not so good as well as the designs and that's why my friends and I feel at times its a rip off.  Do you understand what I'm trying to say?  I dunno, or maybe I should stop talking just in case...sorry I just speak what comes to my mind.  



In my experience - the more you act like a business - the more people will treat you like it

Don't  get into too much dialogue with people -  don't let them tell you how much the cake should be -  once you have a firm pricing schedule in place - you need to stick with it - don't feel pressured to add more - or lower the price.

This is what I was trying to say - spend a lot of time calculating what the TRUE price should be - do it to the point where you are confident that it IS correct..... not fair... not what people will pay.... it HAS to be what you NEED to charge. 

If after all of that you find that people are not prepared to pay that amount..... then DON'T lower it .... this only results in you saying 'yes' to them but in the process saying 'no' to you .... putting YOUR needs behind theirs.....

it is madness !!     You need to do as suggested before,   change the design - make it LESS work - eg. a cake with only 3 colours is cheaper than 1 with 10 colours (especially a SMALL cake)

I speak what comes first to my mind as well..... we should get on ! hahahaha

swtangel102 Posted 22 Dec 2013 , 1:43am

AThanks Applegum. Sorry we didn't get off to a good start just hope you understand it was not my intention. And thank you everyone else for the clarifications and advices.

Norasmom Posted 22 Dec 2013 , 1:45am

Quote:

Originally Posted by ApplegumPam 
 


I disagree -


It might be a lot of money  for some people - that means they DON"T get a custom designed cake - pure and simple

As was stated earlier.... they are NOT meant to be for everybody

Charging what you think is 'fair' -  ONLY if you have somebody that is prepared to subsidise your busienss (ie give money away on a regular basis)


And this setting idea of setting what YOU think is a fair price .... is what has damaged the entire cake decorating industry - TOO many people are prepared to a) work for nothing   OR b)  are under this brainfog of ..... just want everybody to have a nice cake

The lowering of prices - the lowering of standards - the idea that everybody should have a fancy dancy cake.............    does the same apply to housing/cars/food?

If you can't afford the Top Shelf Fillet Steak you live on ground beef or rice............. the butcher doesn't charge you a FAIR price - he charges you what he needs to - to stay in business

Applegumpam, do you charge what you feel is a fair price or do you overcharge?  That's what I'm getting at.  Fair pricing is not underpricing, it pricing at market-value.

ApplegumPam Posted 22 Dec 2013 , 1:47am

Quote:

Originally Posted by Norasmom 
 
Quote:
Originally Posted by ApplegumPam 
 


I disagree -


It might be a lot of money  for some people - that means they DON"T get a custom designed cake - pure and simple

As was stated earlier.... they are NOT meant to be for everybody

Charging what you think is 'fair' -  ONLY if you have somebody that is prepared to subsidise your busienss (ie give money away on a regular basis)


And this setting idea of setting what YOU think is a fair price .... is what has damaged the entire cake decorating industry - TOO many people are prepared to a) work for nothing   OR b)  are under this brainfog of ..... just want everybody to have a nice cake

The lowering of prices - the lowering of standards - the idea that everybody should have a fancy dancy cake.............    does the same apply to housing/cars/food?

If you can't afford the Top Shelf Fillet Steak you live on ground beef or rice............. the butcher doesn't charge you a FAIR price - he charges you what he needs to - to stay in business

Applegumpam, do you charge what you feel is a fair price or do you overcharge?  That's what I'm getting at.  Fair pricing is not underpricing, it pricing at market-value.

ApplegumPam Posted 22 Dec 2013 , 1:54am

Quote:

Originally Posted by Norasmom 
 
Quote:
Originally Posted by ApplegumPam 
 


I disagree -


It might be a lot of money  for some people - that means they DON"T get a custom designed cake - pure and simple

As was stated earlier.... they are NOT meant to be for everybody

Charging what you think is 'fair' -  ONLY if you have somebody that is prepared to subsidise your busienss (ie give money away on a regular basis)


And this setting idea of setting what YOU think is a fair price .... is what has damaged the entire cake decorating industry - TOO many people are prepared to a) work for nothing   OR b)  are under this brainfog of ..... just want everybody to have a nice cake

The lowering of prices - the lowering of standards - the idea that everybody should have a fancy dancy cake.............    does the same apply to housing/cars/food?

If you can't afford the Top Shelf Fillet Steak you live on ground beef or rice............. the butcher doesn't charge you a FAIR price - he charges you what he needs to - to stay in business

Applegumpam, do you charge what you feel is a fair price or do you overcharge?  That's what I'm getting at.  Fair pricing is not underpricing, it pricing at market-value.



I charge what I need to charge to make it worth my while..... it is FAIR to me - ie   as the worker..... whether or not it is FAIR to the client is I guess debatable.

I know MANY people would think it was over-charging...... but those same people are often prepared to accept what i won't.

I am not an advocate of 'market-value'  - I don't think it is applicable to MY business and it doesn't apply to many other custom cakers  that may only be making a few cakes a week. 

The one fact that MOST cake decoraters miss is....... WE are not our customer!!   I would not pay the price I charge for my cakes - that doesn't mean other people won't.

It isn't 10 cakes a day..... most times it isn't 10 cakes a week - and for some months it won't even be 10 cakes a month

 

BUT  - I know I am receiving the CORRECT compensation for my time & effort....... otherwise I would not be doing it

Norasmom Posted 22 Dec 2013 , 1:56am

That's exactly what I meant by fair!  Fair to you, the baker!

AZCouture Posted 22 Dec 2013 , 2:25am

This may or  may not apply to you,  I'm  going to be speaking  in general terms here, because your questions and the replies from others got me thinking. Might just ramble a bit. Do real estate agents set up shop and then go online asking how much to list homes at, or what a "fair" commission should be? Does a doctor open his practice and decide that he won't charge an arm and a leg like the one up the street? What about hair styi Do they just charge what sone random person online said they should? Possibly silly examples, but I cannot believe how the  business end of decorating is treatedbso casually, and sometimes irresponsibly by many.

 

"We all started somewhere!" is a really popular copout that's usually tossed in when conversations like this get going as well. Yes we did all start somewhere. Seems like a lot, more than not, much to the dismay of many like me, are working backwards! They set up a Facebook page, start having giveaways, and taking orders. And then they start threads here asking how much to charge, and where they can find tutorials for every single bit of the cake making process.

 

Now I'm not the smartest most business savvy person I know, far from it. But dang...I wouldn't have DREAMED of opening up shop without having a set pricing structure in place. I wouldn't DARE take an order for something that I couldn't figure out myself. Nothing wrong with tutorials, but if you can't break a cake down in a quick glance to get the general idea of its foundation and techniques, then you need to PASS on that order. Take an order without a retainer or full payment in full? Not from my own mother. Discounts for everyone that you've ever known since birth? Why? What are they going to do for you?

 

I love making cakesI love meeting new clients and designing something unique for their big day. But I am equally, if not more, interested in running a successful business. Not camping out on my fan page running giveaways every other day, or obsessing over how many likes I have,  or moaning because someone unliked my page. Nor am I advertising on yard sale (buy, sell and trade) pages for my local town. For the most part, if you do that, you should stop now. That's a place to find used lawn mowers and baby clothes. Not luxury items like cakes.

 

Speaking of luxury items, yes cakes like ours are luxury items.  WHO ON EARTH wrote the rule that every single occasion warrants a fancy cake? When did they turn inti something that should be affordable to the masses? It's not the first time I've seen a decorator on here refer to their pricing in a manner that nearly, and in one case blatantly said everyone else in the business rips people off. Wow. WOW. I have  $150 minimum price for my work, and even that's pretty low at times for what I feel I provide. How on earth can others have such little respect for their time and hard work, that they make pennies when it's all said and done. Often times, they made no pennies, they lost on the order.

 

FAIR. Be fair to yourself. No one is required to buy your products. And if you can't get people to pay them...find another job. There are plenty of decorators as it is, probably more than necessary in most towns. The entire industry is going to crash and burn if it gets any more saturated than it is, I fear. 

AZCouture Posted 22 Dec 2013 , 2:27am

And that was typed on my phone which acts up occasioally and there are probably more typos than I could shake a stick at. Plus, I have had a lot of coffee, so there was probably some incoherent rambling as well. OOPS.

swtangel102 Posted 22 Dec 2013 , 2:34am

You know what?  I'm sorry I even brought on this topic.  I am leaving the forum.  Thanks for your input everyone, but I'm not the type to go on and debate and argue so thanks again.  

AZCouture Posted 22 Dec 2013 , 2:49am

If you're reacting to me, then that's too bad. Like I mentioned, may or not apply to you, and people are free to address similar issues and even veer off topic a bit. Doesn't mean it's an attack against you. Threads like this generally generate a LOT of replies from many people, and they start to become non specific to the original topic. There's lots of great info in the replies you received. Hopefully you won't acually leave, but quietly consider everything that's been said here, and possibly take away some good information to refer to in future business. ;)

swtangel102 Posted 22 Dec 2013 , 3:01am

ANope. I understand everyone here is trying to help and i am listening but i guess i just wasn't expecting it to be the way it is. I know everyone has their own way of thinking and opinions and i respect that. Im just not the type that likes to debate and argue. I dunno I guess I'm just not comfortable talking about or asking anymore stuff in case I say the wrong thing again and cause more chaos.

mcaulir Posted 22 Dec 2013 , 3:06am

Chaos? You ain't seen chaos yet! ;-)

AZCouture Posted 22 Dec 2013 , 3:09am

Then just don't reply, trust me, it will go on without ya! (honestly, that is NOT meant meanly), cause we can't leave topics like this alone! :D :D :D  

AZCouture Posted 22 Dec 2013 , 3:10am

Quote:

Originally Posted by mcaulir 
 

Chaos? You ain't seen chaos yet! ;-)

Oh no kidding. Chaos was when I saw another decorator's website that actually said they went into business because of the exorbitant pricing a bakery dared to charge her for a "simple" two tier cake, something like that. Say what?? Really? And you're asking US advice on your site? Oh boy.......

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