Pricing Question, But Not A "how Much For This Cake" Post

Business By Bignlittlesmom Updated 1 Apr 2014 , 1:06pm by cakesbycathy

Bignlittlesmom Posted 26 Mar 2014 , 1:51pm
post #1 of 16

This may have been asked before (I feel sure it has) but I haven't found an answer yet so I am taking a chance asking you all.

 

I understand the basics on how to price cakes. Your cost, time, labor, etc.

I understand having a base price on different sizes, flavors, fillings, etc.

 

My question is, how do you determine upgrade charges? Say you are doing an 8 in, 2 layer cake, iced in buttercream and your base price is $x.xx    

 

Now lets say your customer wants a few small fondant decorations. Do you have a pre-set price per item or do you estimate your cost / time and give them a quote? Yes, I do know it will change some depending on what exactly you are making. Some will cost more, some less.

 

I did the above mentioned cake for a "Happy Doctor's Day" cake and added a small fondant syringe, a few fondant "pills", a small fondant band aid and a fondant "prescription" paper. 

 

Just wondering what your general plan is for add-on or upgrades. I am not asking you to price my items for me ;) I am curious how you handle this when you quote prices for your cakes.

 

Thanks, Julie

15 replies
Crazy-Gray Posted 26 Mar 2014 , 2:34pm
post #2 of 16

AI have a 'bracket' for detail, so I charge a set amount per size of cake for an amount of detail within that bracket (ie a max amount of time).

This does mean that people who ask for less detail pay slightly more by up to maybe 2 hours extra work, but then it harder to get a clean finish so that 2hr 'over-charge' pays for my ability to make it look good with less detail.

So I know how long a cake should take me for the price, if 'upgrades' push my expected time up past the maximum eg modelling figures/flowers then the price goes up accurdingly but I find the less itemised the qote the better, I lost a lot of orders by being as open as possible at the start!

klan30 Posted 26 Mar 2014 , 3:43pm
post #3 of 16

I start with my base price per serving and then just guesstimate my time plus the supply costs.  Every single cake I do is different so it's difficult to have any sort of set pricing (for me).  I may have sculpted a cat before but not the same size and details, so it doesn't take the same amount of time.  After I determine how long I think it will take me I usually add on an hour or 2 of labor because I always seem to under-estimate the time element.  I don't share this detailed information with the client I just give them the final price.  If they'd like to decrease the final cost I simplify the design or remove a couple of items.  It's also helpful if the client will give you their budget up front and you can design around that.   Most of the time people really don't know what a custom cake costs and therefore have no budget in mind or its very small.

kakeladi Posted 26 Mar 2014 , 10:37pm
post #4 of 16

I haven't read the other replies yet but I never really charged for  'upgrades'.

I had one price for each size cake - unless it had lots, and lots of extras.

What you described would have been just the regular charge.

howsweet Posted 26 Mar 2014 , 11:20pm
post #5 of 16
Quote:
Originally Posted by Bignlittlesmom 

 

I understand the basics on how to price cakes. Your cost, time, labor, etc.

 

 

That's not quite right - you might want to look into pricing. And why are you differentiating between time and labor?

ugcjill Posted 27 Mar 2014 , 1:12am
post #6 of 16

I'm going to give a thumbnail sketch here in the hopes that it helps someone charge a proper amount for their cakes. Accurate accounting and business training will go much farther than taking this as advice.

 

My base price covers the basic recipe, disposable materials of construction (cake boards, dowels, boxes) and enough decoration to make a pretty cake. This will cover cost, overhead, my wage and 20% business profit.

 

Additional charges are for enhanced construction (plywood instead of cake boards, decorative pillars, etc..) and purchased items (stock gum paste items, toppers, bling). These are list price + shipping charges + 20%.

 

Finally there is additional decoration charges above and beyond basic cake decoration. Figurines, swags, painting, piping, detail work, all the fancy stuff. This fee is a flat rate per hour. This is not my wage, but I take about 60% of it because it is my work and I get the bonus. My business, my rules.

 

In overly simplified terms, I earn about 20% in wages, 15-20% is profit for the business, and the remaining 60% or so goes to overhead, materials, fees, occasional payroll, and taxes.

 

These numbers change dramatically depending on your individual business profile, and change quite often for me, so don't think they are a hard and fast rule. Staying on top of your bookkeeping is essential.

 

Edit: just wanted to add, costs will be very different and much higher if you are paying retail. Don't adjust your prices, adjust your mindset: you can't charge less as a home baker, because your expenses are much higher, processes are inefficient and your profit is much lower as a result. Don't short yourself.

TheSweetTreat Posted 27 Mar 2014 , 11:14am
post #7 of 16

Quote:

Originally Posted by ugcjill 
 

 

Edit: just wanted to add, costs will be very different and much higher if you are paying retail. Don't adjust your prices, adjust your mindset: you can't charge less as a home baker, because your expenses are much higher, processes are inefficient and your profit is much lower as a result. Don't short yourself.

 

Thanks for posting this.  I've been wondering how to deal with this type of thing.  I haven't really sold any cakes yet, but if the time comes I'll insist on a solid system for myself of how to charge for cakes.  As a home baker I'm never really sure how to compare to those who aren't.   But that's a different thread altogether ;P

ugcjill Posted 27 Mar 2014 , 2:06pm
post #8 of 16

Quote:

Originally Posted by TheSweetTreat 
 

 

Thanks for posting this.  I've been wondering how to deal with this type of thing.  I haven't really sold any cakes yet, but if the time comes I'll insist on a solid system for myself of how to charge for cakes.  As a home baker I'm never really sure how to compare to those who aren't.   But that's a different thread altogether ;P

I can compare generalities on the home baking aspect of pricing.

 

Start with $5/serving price for an overall average.

 

A small brick and mortar bakery will have higher overhead, but will also produce larger volume. For rough numbers, let's say rent + utilities + expenses is $3000/month. If this place sells 3000 servings/month, overhead is $1/serving. Wholesale ingredients, supplies, plus shipping expenses cost $0.80/serving. $0.75/serving goes back to the business as profit, $1.5/serving goes to taxes, and $1/serving is wages for 1 full time and one part time employee (60 hrs employee time).

 

A home baker buying retail and acquiring supplies based on incoming orders will pay approximately 3 x on supplies to include ingredients, disposable items, and transportation costs. Estimate $2.25/serving, and trust me on this number. I've been there and I've tracked it. Making one medium sized cake per week on average will be 250 servings per month. Estimate an average of 10 hrs per week of effort including shopping, baking, prepping ingredients, decorating, and time with the customer. $0.75/serving to support your start-up business by acquiring supplies and practicing new techniques, pay your taxes because you're not a deadbeat, and you will earn appx. $8.20 an hour.

 

These numbers are grossly oversimplified, but it's a decent snapshot of where the money will go in a business and why home bakers need to charge the same as bakeries. With lower prices, the only thing you will do is eat cost out of your family or personal budget.

Bignlittlesmom Posted 27 Mar 2014 , 3:55pm
post #9 of 16

AThanks for all the suggestions. I really do appreciate it

Bignlittlesmom Posted 27 Mar 2014 , 3:56pm
post #10 of 16

A

Original message sent by howsweet

That's not quite right - you might want to look into pricing. And why are you differentiating between time and labor?

. Oops just a typo on my part... you know early morning not thinking ;)

TheItalianBaker Posted 31 Mar 2014 , 2:02pm
post #11 of 16

Quote:

Originally Posted by Bignlittlesmom 
 

This may have been asked before (I feel sure it has) but I haven't found an answer yet so I am taking a chance asking you all.

 

I understand the basics on how to price cakes. Your cost, time, labor, etc.

I understand having a base price on different sizes, flavors, fillings, etc.

 

My question is, how do you determine upgrade charges? Say you are doing an 8 in, 2 layer cake, iced in buttercream and your base price is $x.xx    

 

Now lets say your customer wants a few small fondant decorations. Do you have a pre-set price per item or do you estimate your cost / time and give them a quote? Yes, I do know it will change some depending on what exactly you are making. Some will cost more, some less.

 

I did the above mentioned cake for a "Happy Doctor's Day" cake and added a small fondant syringe, a few fondant "pills", a small fondant band aid and a fondant "prescription" paper. 

 

Just wondering what your general plan is for add-on or upgrades. I am not asking you to price my items for me ;) I am curious how you handle this when you quote prices for your cakes.

 

Thanks, Julie

 

I know, pretty much, how long it takes me to make a bow, lettering and so on.. so now I have a sort of basic price list.

For example, if I charge $5 for a 3" bow that goes on 6" cake, a bigger bow for a 8" cake would cost more, let's say $10, and so on.

You need to write down how long it takes for you to make a decoration and get your price out of it.

 

For very simple decorations, like fondant ribbon around I don't charge extra, it's included in my serving price.

costumeczar Posted 31 Mar 2014 , 10:00pm
post #12 of 16

Quote:

Originally Posted by kakeladi 
 

I haven't read the other replies yet but I never really charged for  'upgrades'.

I had one price for each size cake - unless it had lots, and lots of extras.

What you described would have been just the regular charge.

Me too...My price includes basic decorations, and that would count as basic since it's minimal.  The only time I charge more is for something that's REALLY going to take a lot of time and special equipment like isomalt, gold leaf, huge cascades of gumpaste, etc.

howsweet Posted 1 Apr 2014 , 2:48am
post #13 of 16

I specialize in custom cakes, so they have custom prices.  The base price includes no topper, but does include simple decorations like a few polka dots and basic trim around the base of each tier. But extra stripes, bows, flowers, name placards, banners etc. all have their own prices. The topper may be anything from a large number one to a huge peony to a 3d figure of the customer's child in her party dress.

 

The drawback to doing it that way is I spend more time quoting out cakes.

AZCouture Posted 1 Apr 2014 , 2:53am
post #14 of 16

APretty much ditto to Costume and Howsweet.

cakesbycathy Posted 1 Apr 2014 , 1:06pm
post #15 of 16

Quote:

Originally Posted by costumeczar 
 

Me too...My price includes basic decorations, and that would count as basic since it's minimal.  The only time I charge more is for something that's REALLY going to take a lot of time and special equipment like isomalt, gold leaf, huge cascades of gumpaste, etc.


This is how I charge as well.

cakesbycathy Posted 1 Apr 2014 , 1:06pm
post #16 of 16

Quote:

Originally Posted by kakeladi 
 

I haven't read the other replies yet but I never really charged for  'upgrades'.

I had one price for each size cake - unless it had lots, and lots of extras.

What you described would have been just the regular charge.


This is how I charge as well.

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