How Much Is A Cake Really Worth ? Branstorming Here...would Love Your Thoughts!

Business By 1234me Updated 9 Apr 2014 , 2:39pm by costumeczar

1234me Posted 8 Apr 2014 , 5:46pm
post #1 of 17

I know I undercharge.  I will soon take a hiatus from cakes for a few months and hope to reevaluate some things and make some changes to my business and my prices.

 

I have seen many posts on Facebook lately by photographers who offer mini sessions for holidays - 20 minute sessions with a cute Easter backdrop, Valentine backdrop, props, etc.  In my area, these sessions are $75-$95 for 20 minute sessions in which the clients get a cd with 7- 10 edited pictures!  WOWSER - so you are telling me they are making almost $400 for an hours worth of work?  Yes, I know this includes other things like the cost of the props, editing time, etc.

 

So it got me thinking - what really goes into making a cake?  If you add up all the time which goes into ONE order, what should that cost be?

 

So what goes into making a cake:

cost of going to store to buy ingredients

cost of going to store to buy supplies

actual cost of ingredients

baking time (electricity used)

plastic wrap/foil for those who freeze

utensils (spatula, rolling pins, fondant smoother, etc)

board preparation

turntable

actual cost of supplies (boards, boxes, etc)

time of decorating cake

time of communication with customer

order forms

website

business cards

advertisement - if you do that

 

I know I am missing many things.  Anyone care to add?  I know I will lose customers when I change my prices and I am ok with that.  I want to charge what I rightfully deserve to charge but I know I will feel like I need to justify it to some people.

 

Don't get me wrong, I think these photographers are worth the prices they are charging but it just hit me in the face that they are making $95 for a 20 minute session!

 

PS if you are a photographer, I would love to hear your opinion about this too!

16 replies
Shortkaik Posted 8 Apr 2014 , 5:54pm
post #2 of 17

I wouldn't recommend comparing wages between industries, it's only going to set you up for disappointment, likely! :)  If I used my day job wage for cake orders... I would not get any cake orders!

 

It really is important to make sure you know what you're charging and why.  For every quote I give, I do up a spreadsheet for the amount of batter, icing, fondant, materials (all these costs are already known to me) and then add on an estimated time/labour cost and a bit more for profit.  

 

Sometimes I am tempted to show clients my cost breakdown so they get a better understanding of why it costs what it does!

1234me Posted 8 Apr 2014 , 6:15pm
post #3 of 17

I understand what you are saying but the two professions are very similar.  It is talent they as photographers have just like we cake decorators have a talent.  Some are better than others.  Some have better quality pictures than others.  They have factors that play into their cost just like we do (equipment, computer software for editing, the cost of the CD's, cost of props, etc)  But when it comes down to it, it is a business based on a product - their's the picture, ours the cake/cupcake, etc.  Same as an artist who paints.  So to me, they are very comparable!

Shortkaik Posted 8 Apr 2014 , 6:23pm
post #4 of 17

That's true, they are similar in a sense when you really think about it, but I think the big difference is how the two are perceived by clients.  When a client books a photographer it's for X hours.  When you book a baker, clients usually have no idea how many hours go into it and just know that a cake comes out at the other end!  They often don't think about the fact that you deserve to get an hourly wage, it's more than just the cost of ingredients.  Of course, they also don't think about the X additional hours a photographer spends on editing.

 

If we tried to charge cakes by the hour, people would just say "you should just work faster" (I feel like that comment belongs in the "things not to say to bakers" thread!)

as you wish Posted 8 Apr 2014 , 7:38pm
post #5 of 17

AI think your list of what goes into making a cake is good; just one thing I thought of to add, but for me it's a biggie. Time spent planning/designing the cake. Someimes it comes together quickly, especially if the customer really knows what they want, but sometime I can spend an awful lot of time on it!

Just a thought about the photography thing: I have several friends who are photographers, all at different levels of talent and ability. They spend a lot of time not just on the editing but on the preparation. The cute little props and backgrounds require work to pull together, the scheduling is never easy, you are sure to get no-shows and people running late. They also spend time and money to learn their art and often take classes to learn even more. Like us, they have to deal with people of all kinds and that can be anything from fun to a real PITA, as we know! So, where it looks like almost $400 for an hours work, it is actually many, many hours that have gone into it both before and after that one hour of taking photos.

costumeczar Posted 8 Apr 2014 , 7:40pm
post #6 of 17

I wrote a post about this that will be up on my blog on Thursday. I aim for about $30 an hour for what I get after all expenses. Some cakes end up higher than that, some end up lower, but I try to average it out.

 

I think that looking at photography like you're doing is deceptive, which is what the point of my article is. If I tell people their cake costs $500 and they ask me how long it takes me to make it, it looks like I'm making a heck of a lot more than I really am based on the hands-on time alone. Photographers might be charging $95 for a 20 minute session, but the editing time probably takes at least a couple of hours if they're doing a good job. They're definitely not earning $300 an hour! If you take everything into account that 20-minute session probably takes closer to three hours.

howsweet Posted 8 Apr 2014 , 7:52pm
post #7 of 17

AYou do need to know your costs, but your costs are not what you use to price your cake. Should everyone sell cake for varying prices because their costs vary? If my fondant costs me $10 less per cake than yours, do you think I'm going to sell the same cake for $10 less than you have to? Of course not! If you're getting $10 more for cakes, that's what I'm going to do, too.

I don't know if that was helpful, but I'm on my phone and it's hard to go back and edit. The bottom line is you charge as much as the market will bear. You have to find out what similar cakes go for and charge similarly.

You have to be really careful choosing whose prices to use with so many out there not knowing how to price. It's usually safest to use storefront operations.If your cakes look better and you use higher qquality iningredients, then your price would adjust higher.

You probably know that you can't just go to their website unless they post pictures under every cake. My website says my base price is $5, but they almost always come out to at least $7 +

howsweet Posted 8 Apr 2014 , 7:56pm
post #8 of 17

AMarket price minus your costs tells you what you will make on your cake and let you decide and keep track of whether you should sell cakes. That's what knowing your costs is for.

howsweet Posted 8 Apr 2014 , 8:01pm
post #9 of 17

A

Original message sent by costumeczar

I wrote a post about this that will be up on my blog on Thursday. I aim for about $30 an hour for what I get after all expenses. Some cakes end up higher than that, some end up lower, but I try to average it out.

I think that looking at photography like you're doing is deceptive, which is what the point of my article is. If I tell people their cake costs $500 and they ask me how long it takes me to make it, it looks like I'm making a heck of a lot more than I really am based on the hands-on time alone. Photographers might be charging $95 for a 20 minute session, but the editing time probably takes at least a couple of hours if they're doing a good job. They're definitely not earning $300 an hour! If you take everything into account that 20-minute session probably takes closer to three hours.

It may not be clear to some people reading. Your $30 per hour includes all time associated with the business, not just time picking up supplies, baking the cake and cleaning up. Is that correct?

cupadeecakes Posted 8 Apr 2014 , 8:50pm
post #10 of 17

Don't forget things like:

 

Business License

Food Safety courses

Continuing Ed (cake classes)

Insurance

Rent

Utilities

 

Once you figure out why that photographer needs to charge what they do, you'll be better off applying it to yourself and your business.  When I was still wet behind the ears (they're still a little damp) I started wearing a stopwatch while I was working on a cake.  The clock was running as long as I was "working" on that cake.  That included e-mails, baking, decorating, photographing the finished product, delivering, etc.  I was amazed at the amount of time I put into one cake.  My prices went up pretty much immediately.

Norasmom Posted 8 Apr 2014 , 9:22pm
post #11 of 17

My professional photographer friend ($120/session) was aghast at my price of $150 for a cake to serve 50 people.   And that was a special discount, I charge more usually.  She thought I was ridiculously expensive…anyhow, I go to the mall to get my family photos taken and she went to Wal-Mart for her cake.  We can't afford each other's prices  LOL

costumeczar Posted 8 Apr 2014 , 9:27pm
post #12 of 17
Quote:
Originally Posted by howsweet 


It may not be clear to some people reading. Your $30 per hour includes all time associated with the business, not just time picking up supplies, baking the cake and cleaning up. Is that correct?

Yes...And I base that on the fact that I've been doing this for 15 years and I don't work for minimum wage anymore. Some things that earn income will be less per hour and some will be more. If at the end of the year I can see how much I made per week and it comes out to around $30 an hour that's fine.

mariak Posted 8 Apr 2014 , 9:30pm
post #13 of 17

One other thing that might be a factor for photographers is that there product lasts forever. Not trying to diminish the importance of cake! If I did I would be out of work!! I'm just saying that a cake while very important to a celebration, it gets eaten and is gone. You have the pictures to look back on forever. I had a bride basically tell me this once. Of course to all of us the cake is the most important thing!!!:-D

CWR41 Posted 9 Apr 2014 , 12:41am
post #14 of 17

Quote:

Originally Posted by 1234me 
I know I am missing many things.  Anyone care to add?


I'll add... see my list on post #7:

http://cakecentral.com/t/707078/business-expenses

howsweet Posted 9 Apr 2014 , 1:55am
post #15 of 17

I don't see any reason for criticizing any thought process that helps a person decide to reevaluate how they are charging. It's definitely something that should be looked at with fresh eyes from time to time.

 

On a side note, one thing that effects a photographer perhaps to a greater degree than bakers, is that they can only be in one place at one time. I can hire someone to deliver a cake while I'm delivering another, but I can't be taking pictures at 2 weddings at once.

 

Quote:

Originally Posted by costumeczar 
 

Yes...And I base that on the fact that I've been doing this for 15 years and I don't work for minimum wage anymore. Some things that earn income will be less per hour and some will be more. If at the end of the year I can see how much I made per week and it comes out to around $30 an hour that's fine.


That sounds like a really great way to look at the big picture. I find it impossible to cost out a cake exactly.  Even if you specifically keep track of how much time you literally spent talking to that particular customer and every bit of time spent on that cake,  you'd still have to factor in other things like talking to customers who wind up not ordering or working on your website or filing your taxes or a thousand other things.

cupadeecakes Posted 9 Apr 2014 , 12:36pm
post #16 of 17

Quote:

Originally Posted by mariak 
 

One other thing that might be a factor for photographers is that there product lasts forever. Not trying to diminish the importance of cake! If I did I would be out of work!! I'm just saying that a cake while very important to a celebration, it gets eaten and is gone. You have the pictures to look back on forever. I had a bride basically tell me this once. Of course to all of us the cake is the most important thing!!!:-D


To that I would say that filet mignon lasts just as long, winds up in the same place, but the stores still charge a premium for it!  Some people will never appreciate the artistry that goes into something like cake, and that's something I can live with.  It was a good day when I finally realized that not everyone can afford my product and I shouldn't feel bad about that.

costumeczar Posted 9 Apr 2014 , 2:39pm
post #17 of 17

Quote:

Originally Posted by howsweet 


It may not be clear to some people reading. Your $30 per hour includes all time associated with the business, not just time picking up supplies, baking the cake and cleaning up. Is that correct?

 

Quote:

Originally Posted by howsweet 
 


That sounds like a really great way to look at the big picture. I find it impossible to cost out a cake exactly.  Even if you specifically keep track of how much time you literally spent talking to that particular customer and every bit of time spent on that cake,  you'd still have to factor in other things like talking to customers who wind up not ordering or working on your website or filing your taxes or a thousand other things.

oh Lordy, yes. Not everything you do is directly related to selling a specific cake, so you have to take everything into account.

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