How Much To Charge For A Cake

Business By SarahLou143 Updated 2 Jul 2014 , 12:14am by SweetOutlaws

SarahLou143 Posted 6 Apr 2014 , 10:44pm
post #1 of 27

ADoes anyone have any tips for what to charge for a cake?

I've heard people talk about charging per slice. Is there a "formula" for that?

Anything would be of some help Thanks in advance!

26 replies
angelofhislove Posted 12 Apr 2014 , 6:30pm
post #2 of 27

Well you take the price you are planning on charging for a slice or serving of cake and multiply it by how many servings you can cut from a cake. So if a cake will slice into 10 equal servings..that cake would cost the customer $30.00. You can find a serving chart on Wilton.com that will help you determine this.

SarahLou143 Posted 13 Apr 2014 , 1:14pm
post #3 of 27

Thank you

Donita1978 Posted 15 Apr 2014 , 1:39am
post #4 of 27

AI'm seriously thinking of starting a side business doing cakes. I've done several for friends as well as what I've done for my must've birthdays. I already have a album of cakes I've done so far. My only problem is I'm not for sure the best prices for my cakes. I know that for some I probably didn't charge enough. I'm thinking for wedding cakes having a 2.50 per serving for gingerbread and 4.00 for fondant. Party cakes around 1.25 serving and my 3-D cakes starting at 35.00 and go up. Are these prices sound pretty fair for a at home side business in a small but growing town? I've searched different cake business sites for pricing to kinda help me figure out the best price, but not under pricing my work.

morganchampagne Posted 15 Apr 2014 , 1:47am
post #5 of 27

A^^ in my opinion that's too low. Search "pricing" on here and you'll get some amazing info!!

leah_s Posted 15 Apr 2014 , 3:32am
post #6 of 27

AYour pricing is way off. Doing a search and spending some time reading would be a good thing to do.

ellavanilla Posted 16 Apr 2014 , 10:04pm
post #7 of 27

spend some time looking at your costs! there is no way that looking at what other people charge is the appropriate pricing model. for goodness sake, are you running a business or not??

 

Materials + Labor + Expenses + Profit = Retail Price

 

if you're seriously thinking about starting a business start with business basics, not a gut feeling on what you should charge. there are so many factors to consider before you turn on your oven. 

 

 

sba.gov

howsweet Posted 16 Apr 2014 , 11:04pm
post #8 of 27
Quote:
Originally Posted by ellavanilla 
 

spend some time looking at your costs! there is no way that looking at what other people charge is the appropriate pricing model. for goodness sake, are you running a business or not??

 

Materials + Labor + Expenses + Profit = Retail Price

 

if you're seriously thinking about starting a business start with business basics, not a gut feeling on what you should charge. there are so many factors to consider before you turn on your oven. 

 

 

sba.gov


That statement is true, but that's not how you determine price.  I checked several articles on the site you referenced and every single one made reference to market price of your product. The statement below from the site makes reference to the "price floor" which is what practically every post I've ever seen on this website tries to use to set pricing. That might not be so bad, except price floor is misunderstood. The price floor must include enough profit to be at least high enough to make a living.  It doesn't make sense to "shoot for" the price floor. It's not reasonable for that to be the goal, yet it's what you time and time again.

 

sba.gov:


Your pricing structure is determined through market research and analysis of financial considerations. Basic marketing strategy is to price within the range between the price ceiling and the price floor. The price ceiling is determined by the market; it is the highest cost a consumer will pay for a product or service and is based on perceived value. What is the competition charging? What is the quality of the product or service you are offering? What is the nature of the demand and what is the image you are projecting? The price floor is the lowest amount at which you can offer a product or service, meet all your costs and still make your desired profit. Consider all costs -- raw materials, office overhead, shipping, vehicle expense, taxes, loan and interest payments and owner draws are a few. 
howsweet Posted 16 Apr 2014 , 11:09pm
post #9 of 27

Quote:

Originally Posted by ellavanilla 
 

spend some time looking at your costs!

That all anyone seems to focus on when it comes time for pricing. Yes, you should know your costs. But I bet if home bakers just forgot all about costs and made it their business to find out what the true market value of their cakes is and charged that, they'd make a lot more money.

 

We have people on this site worrying about saving $1 worth of cake batter and charging $50 less than what they should for the cake.

howsweet Posted 16 Apr 2014 , 11:26pm
post #10 of 27

Ugh! I did it again - Ellavanilla, I don't mean to attack you, but what you wrote could be taken to mean <figure up your costs, add in a wage and profit and you have your price>. I don't think that's what you meant/

DeliciousDesserts Posted 17 Apr 2014 , 11:20am
post #11 of 27

A

Original message sent by howsweet

[COLOR=0000FF]sba.gov:[/COLOR] [rule][COLOR=0000FF][B]Your pricing structure is determined through market research and analysis of financial considerations[/B]. [B]Basic marketing strategy is to price within the range between the price ceiling and the price floor. The price ceiling is determined by the market; it is the highest cost a consumer will pay for a product or service and is based on perceived value.[/B] What is the competition charging? What is the quality of the product or service you are offering? What is the nature of the demand and what is the image you are projecting? The price floor is the lowest amount at which you can offer a product or service, meet all your costs and still make your desired profit. Consider all costs -- raw materials, office overhead, shipping, vehicle expense, taxes, loan and interest payments and owner draws are a few. [/COLOR]

. This should be the new auto response for all cake pricing questions!

ellavanilla Posted 17 Apr 2014 , 5:23pm
post #12 of 27

Quote:

Originally Posted by howsweet 
 

Ugh! I did it again - Ellavanilla, I don't mean to attack you, but what you wrote could be taken to mean <figure up your costs, add in a wage and profit and you have your price>. I don't think that's what you meant/

 

of course! i don't feel attacked. someone asked for a formula so i snarkily posted that. My point was that basing your prices on other retailer's prices doesn't really give you any idea whether or not you can make any money. 

 

If I make handmade shoes, for example, I won't be able to compete with Kohls pricing because their costs and my costs will be entirely different. I find that very few people who are under pricing or not earning a profit haven't looked at their own costs. We've all seen that. If one is going to start a business, one has to figure out if there is any room for profit at all. So, that formula isn't completely dead. If you plug in your numbers and find that they are twice the price of the competition, then you have some thinking and planning to do, right?

MimiFix Posted 17 Apr 2014 , 6:14pm
post #13 of 27
Quote:
Originally Posted by ellavanilla 
 

... basing your prices on other retailer's prices doesn't really give you any idea whether or not you can make any money...

 

True. But it's an easy way to price. No brain-power necessary. The only easier way is to ask CC members what price they would use.

 

And no matter what, of course they would make money. There's already sugar and flour in the pantry. Paid for their time? Anything is more than nothing.  

 

The biggest stumbling block for most people: thinking only in the moment.

enga Posted 17 Apr 2014 , 6:38pm
post #14 of 27

 

Pricing a cake takes a lot of research and should not be taken lightly. It can make or break you budding business. There are sooo many variables to consider.

 

Supply and demand determines the price of goods and services in the market and we all know that the market is saturated.  When it comes to pricing your cakes you do have to consider how much it costs you to make them. Then you have to factor in what other cakers are charging. You also need to consider how much a costumer is willing to spend and how much you think they will spend. If you go to low, you lose money, if you go too high they won’t spend theirs and you still lose money. So YOU have to do your homework with pricing.

 

Are you offering something different from your competitors like high quality ingredients, something unique or special? That can be your justification for charging a higher price for your cakes. And as I said before if you have great products and good customer service, they will buy your products even if they cost more.

 

“Despite economic worries, the industry is expanding its customer base while other food service sectors continue to suffer. Consumers are now willing to spend moderately and demand high quality for their dollar; an equation for which retail bakeries are a solution. The most promising sector for the retail baking is cakes. Wedding cakes in particular are gaining ground as the economy rebounds.”

http://www.anythingresearch.com/industry/Retail-Bakeries.htm

 

Want to know how big the Baking Industry is? Check this link out.

http://www.ehow.com/facts_7486020_baking-industry-united-states.html

 

Want some of that money? Then you have to research your target market. I saw this article awhile back that asks “Would you pay $4.50 for a fancy cupcake?” Most people won’t but some will if it’s offered in the right market.

http://www.marketplace.org/topics/business/news-brief/how-much-your-fancy-cupcake-worth

 

This was an inspiring story I read. It talks about women in the food industry and how hard it is. I believe that if you want something bad enough and you are willing to do the hard work, it can happen. Sometimes you win, sometimes you fail.

http://www.huffingtonpost.co.uk/2014/03/20/women-in-food-thomasina-miers_n_4993787.html?utm_hp_ref=uk-lifestyle&ir=UK+Lifestyle

 

When you do fall and you are laying there on the ground, looking up at the sky. You ask yourself, do I just want to lay here (by getting a job that I hate) and give it all up?  My answer was a resounding “NO” because even though I failed and had to gain income by other means, that underlying passion was still there. The key is being passionate and wanting something bad enough to get back up and try it again even though it's hard. 

 

Just my two cents

 

Good luck SaraLou and Donita!

howsweet Posted 18 Apr 2014 , 1:08am
post #15 of 27
Quote:
Originally Posted by ellavanilla 
 

 

of course! i don't feel attacked. someone asked for a formula so i snarkily posted that. My point was that basing your prices on other retailer's prices doesn't really give you any idea whether or not you can make any money. 

 

If I make handmade shoes, for example, I won't be able to compete with Kohls pricing because their costs and my costs will be entirely different. I find that very few people who are under pricing or not earning a profit haven't looked at their own costs. We've all seen that. If one is going to start a business, one has to figure out if there is any room for profit at all. So, that formula isn't completely dead. If you plug in your numbers and find that they are twice the price of the competition, then you have some thinking and planning to do, right?

Yes this is certainly true, but it is definitely how price is determined. Costs are what tell you whether or not it's worth your time to bother turning on the oven. As illustrated in that quote from the sba, cost helps to tell you where the price floor is and that's all most posters here seem to care about. The advice for pricing your cakes is consistently to price at the price floor. Which literally means to charge as little as possible. (By definition that's what it means) And that might not be so bad except calculating the price floor probably rarely actually happens. And almost no one understands the phrase, " desired profit".

anitac Posted 13 May 2014 , 2:16pm
post #16 of 27

I know this may not be the most accurate way, but I HATE math!  I come up with a price per serving and I multiply it by how many servings are in the cake, then I add an extra charge if there is a lot of decorating or extra fondant etc. involved, then I figure out how time I spent on the cake start to finish to see how much money I would make per hour.  I just estimate the cost of ingredients.  I have never priced out the exact cost of ingredients, that is just so overwhelming to me. Lastly, I have researched a lot of local bakeries and I try to make my prices about the same as theirs so I am not low-balling anyone.  This is probable not the most accurate way, but it works for me.

Donita1978 Posted 28 Jun 2014 , 9:29pm
post #17 of 27

A[IMG]http://cakecentral.com/content/type/61/id/3256047/width/200/height/400[/IMG] How much would you charge for this cake? I did this cake for a friend's daughter first birthday and know I didn't charge her enough but for any future ones, what would you charge or at least a base price? This was made from the 3-D near cake pan and had to turn him into an owl. All with gingerbread icing. Thanks

Donita1978 Posted 28 Jun 2014 , 9:30pm
post #18 of 27

ASorry, buttercream icing

FioreCakes Posted 29 Jun 2014 , 4:53am
post #19 of 27

AOh. Anitac. There is so much wrong with what you said. You are not business minded and you should not have a business. Keep it a hobby and only give to friends. If you want to be business like, read the threads to determine how much to charge.

**edited, used wrong member name**

RedneckRuffle Posted 29 Jun 2014 , 5:24am
post #20 of 27

A

Original message sent by Donita1978

[IMG]http://cakecentral.com/content/type/61/id/3256047/width/200/height/400[/IMG] How much would you charge for this cake? I did this cake for a friend's daughter first birthday and know I didn't charge her enough but for any future ones, what would you charge or at least a base price? This was made from the 3-D near cake pan and had to turn him into an owl. All with gingerbread icing. Thanks

Are you even being serious??

Donita1978 Posted 29 Jun 2014 , 9:06pm
post #21 of 27

AWhat do you mean am I even serious? I'm just curious is all.

craftybanana Posted 29 Jun 2014 , 9:48pm
post #22 of 27

Prices vary depending on cost, labor, etc etc like what was said earlier in this thread. There are other threads that address this issue that have how people determining their costs per serving, if it's a square/round/3-D cake etc. Just use the search bar or read the earlier posts to determine your costs. So many people ask this question instead of reading the threads that already talk about this in detail. Hence the animosity that often comes these days with new threads asking how to price this or that.

 

Wilton has a serving guide by the way and lots of people charge per serving for a base price, then extra for, well extra stuff.

 

Remember the Search bar is your FRIEND :D

RedneckRuffle Posted 29 Jun 2014 , 10:09pm
post #23 of 27

A

Original message sent by Donita1978

What do you mean am I even serious? I'm just curious is all.

I just mean that the overall synopsis of this thread is the value of the search bar, especially where pricing is concerned. There's too many factors for someone to throw a quick answer at you. Also, it's considered a little rude to highjack someone else's thread like that. If you're new to forums, it's not that big a deal? Just struck me as funny. Sorry. :)

Donita1978 Posted 30 Jun 2014 , 1:06am
post #24 of 27

AI'm sorry I didn't know what you had meant, but I am alittle new to the forums and tried to start a new thread with my owl cake and couldn't figure out where to go to start one. (I'm using my phone not a computer). But thank you anyway and I'm sorry if it seemed like I just picked a thread and posted my picture on it. I apologize.

RedneckRuffle Posted 30 Jun 2014 , 1:19am
post #25 of 27

A

Original message sent by Donita1978

I'm sorry I didn't know what you had meant, but I am alittle new to the forums and tried to start a new thread with my owl cake and couldn't figure out where to go to start one. (I'm using my phone not a computer). But thank you anyway and I'm sorry if it seemed like I just picked a thread and posted my picture on it. I apologize.

If you look at the bottom of the page on your phone, you'll see a button that says (Mobile | Desktop). Switch over to desktop and the "start new thread" buttons will appear close to the top of the page, then switch back to mobile when youre done. They haven't perfected the whole 'mobile' thing yet.

Donita1978 Posted 30 Jun 2014 , 1:42am
post #26 of 27

AOkay thank you :)

SweetOutlaws Posted 2 Jul 2014 , 12:14am
post #27 of 27

I've seen where people charge by the slice, depending if it is a buttercream cake slice or a fondant cake slice, if it were me doing the cake, then I would look at my cost for materials, how much labor time you put into making the cake, and go from there. That way you know that you could get a reasonable price, because if you charged by the slice there may be a chance you could charge way to low or to high.

Quote by @%username% on %date%

%body%