Little Pricing Advice?

Business By savannah1986 Updated 28 May 2014 , 5:57am by SystemMod1

savannah1986 Posted 23 May 2014 , 3:30am
post #1 of 85

AI plan to buy cake boss software, until then I need a little help. I did a bridal shower, 24 cupcakes with gerber daisy toppers. I charged $1.50 for each cupcake and an additional $.50 each for filling. that would be $2.00 per cupcake. [IMG ALT="*"]http://cakecentral.com/content/type/61/id/3237244/width/500/height/1000[/IMG] Did I charge too much or too little? or am I right in between? I live in a rather small town and I've been told my prices are too high, have even lost customers due to this. so I looked at other bakeries in surrounding areas and lowered my prices close to theirs.

84 replies
AZCouture Posted 23 May 2014 , 3:49am
post #2 of 85

AYou've had customers that paid your prices, and wouldn't order again afterwards? That's what losing a customer is to me. People nit ordering at all because of your pricing isn't losing customers, they're just not willing to pay your prices, and that's perfectly normal. I think $3.50 would be a more reasonable price to me, but I can't tell you what to charge.

Jenny BakesAlot Posted 23 May 2014 , 3:49am
post #3 of 85

Looking at your topper, it appears as if you shaped each petal of FOUR layers of flowers for EACH cupcake!  (Plus the middle).  That's a heck of a lot of work for $2/cupcake.  So I'd say you are definitely NOT overcharging.  I think you are undercharging.  They are very pretty!

savannah1986 Posted 23 May 2014 , 3:54am
post #4 of 85

AI believe you're correct. Pricing is so difficult for me as I'm just starting out, I live in a small town and I need your honest opinion, should I raise my prices?

savannah1986 Posted 23 May 2014 , 3:57am
post #5 of 85

AThank you jenny :) and yes it was an awful lot of work. 4 layers, centers, all but the hot pink flowers I used the veining tool on (discovered how to use that tool after the pink ones were made lol) then petal and disco dusts. Whew!

FioreCakes Posted 23 May 2014 , 3:59am
post #6 of 85

AAccording to your other post this is your first customer?

Norasmom Posted 23 May 2014 , 4:01am
post #7 of 85

Raise the prices and lose the cheap customers.  Just tell your price and if people say it's to high say okay, thanks for your inquiry, buh-bye!  

 

I charge $2.75 for my cupcakes, even for the most simple ones, but I am in Boston and everything is crazy expensive up here.

drea88 Posted 23 May 2014 , 4:17am
post #8 of 85

AThis is from the perspective of a customer, since I don't sell cakes or cupcakes, but I think $2 is too little, even in a small town. I can't imagine paying so little for a cupcake with a daisy topper and fillings.

howsweet Posted 23 May 2014 , 4:28am
post #9 of 85

AAs far as I know, all cake boss is going to do is help you organize your costs. It's not going to tell you what to charge as price should not be based on cost.

For example, if a cupcake goes for $5 then that's what you should charge. It doesn't matter if it costs you fifty cents to make it or $5. Except that if you make it for fifty cents, you'll make a nice profit.

AZCouture Posted 23 May 2014 , 5:14am
post #10 of 85

AIf you consistently have trouble selling those at that price, and you can't find customers to pay more, you might just be in an area that can't support a business like that. Sometimes it just can't be done. So you might be able to drop the level of detail you offer, and only sell simpler items better suited to smaller budgets.

Smckinney07 Posted 23 May 2014 , 5:50am
post #11 of 85

AI can't speak to the Cake Boss Software but I can tell you pricing is one of the most discussed threads on CC.

I live in a small, rural community and I charge more for cupcakes with a custom filling then add on per complexity of decorations. I'll attach some links to other threads that you might find useful.

Also, when comparing prices in your area you need to look at custom cake/cupcake shops rather then Walmart (maybe you have, I don't know). If a custom shop isn't going to be profitable in your area then lower your detail rather then your prices, as AZ stated.

It does take a while to build a good customer base, I do a lot of networking with other vendors in my area, promoting small business's are big in my area we put together vendor fairs and do cross promos together which was especially helpful when I first started.

There are people who will complain about your prices, I've found having a pricing minimum helps 'weed out' some of those customers but if someone doesn't value my product then they can go to someone else.

Generic Pricing Matrix: http://www.docakes.com/PricingCakes.html

Pricing matrix like the Cakulator: http://bakecalc.com/

Cookies pricing matrix: https://docs.google.com/spreadsheet/lv?key=0AvflfTGZ15dhcG1CRzk0dUI1Vzl3UzB2a0w5WUJnYnc&newcopy

Cakes pricing matrix: https://docs.google.com/spreadsheet/lv?key=0AvflfTGZ15dhcG1CRzk0dUI1Vzl3TFQ2X2laVWtDQUE&newcopy

Great Blog about pricing and business: http://jasonkraftblog.wordpress.com/

I haven't looked much at the first few but Jason Kraft's blog is very useful.

bakernoob Posted 23 May 2014 , 6:26am
post #12 of 85

Oh I think you definitely UNDERcharged! They are very pretty and I'm sure they took a lot time too. I would expect to pay at least $2.50 each for those and that is still the bare minimum of what I'd think. Pick your price and stick with it. If someone doesn't want to pay it then you could offer to create a lesser detailed version for their budget or they can buy plastic toppers from Walmart and stick them in some stale store bought cupcakes :-)

I just reread and they are filled too? Yes I would definitely be charging more and this is just as a consumer since I do not sell cupcakes.

as you wish Posted 23 May 2014 , 11:17am
post #13 of 85

AIt makes me nuts that people seem to think cupcakes should be cheap. Seriously, you could take three of those flowers and put them on a 6" cake and easily charge $50+ for it. But you make 12 and put them on cupcakes and people think they should cost $20! I almost never end up making cupcakes for people; I charge like each of them is a separate little cake. Because it it! Okay, rant over. Sorry about that. :)

leah_s Posted 23 May 2014 , 12:23pm
post #14 of 85

AMy basic, filled cupcake with a simple swirl is $3. With a flower like the ones shown, I'd get $5-$6 each. For $2.50 each you lost money. Sometimes it's not worth it to turn on the oven.

howsweet Posted 23 May 2014 , 3:56pm
post #15 of 85
Quote:
Originally Posted by Smckinney07 

I can't speak to the Cake Boss Software but I can tell you pricing is one of the most discussed threads on CC.

I live in a small, rural community and I charge more for cupcakes with a custom filling then add on per complexity of decorations. I'll attach some links to other threads that you might find useful.

Also, when comparing prices in your area you need to look at custom cake/cupcake shops rather then Walmart (maybe you have, I don't know). If a custom shop isn't going to be profitable in your area then lower your detail rather then your prices, as AZ stated.

It does take a while to build a good customer base, I do a lot of networking with other vendors in my area, promoting small business's are big in my area we put together vendor fairs and do cross promos together which was especially helpful when I first started.

There are people who will complain about your prices, I've found having a pricing minimum helps 'weed out' some of those customers but if someone doesn't value my product then they can go to someone else.



Generic Pricing Matrix:
http://www.docakes.com/PricingCakes.html

Pricing matrix like the Cakulator:
http://bakecalc.com/

Cookies pricing matrix:
https://docs.google.com/spreadsheet/lv?key=0AvflfTGZ15dhcG1CRzk0dUI1Vzl3UzB2a0w5WUJnYnc&newcopy

Cakes pricing matrix:
https://docs.google.com/spreadsheet/lv?key=0AvflfTGZ15dhcG1CRzk0dUI1Vzl3TFQ2X2laVWtDQUE&newcopy

Great Blog about pricing and business:
http://jasonkraftblog.wordpress.com/

I haven't looked much at the first few but Jason Kraft's blog is very useful.

Then why bother providing this list? How do you know if the information is helpful or going to lead her in the wrong direction?

howsweet Posted 23 May 2014 , 4:00pm
post #16 of 85

The internet is FULL of wrong information about cake pricing. Probably most of it is wrong. That anyone would just provide a link without [looking much at it] makes me crazy.

howsweet Posted 23 May 2014 , 4:27pm
post #17 of 85

ASo sorry, Smckinney07. I would have deleted my posts if there was still time. Y'all know I see red when it comes to pricing.

AZCouture Posted 23 May 2014 , 5:40pm
post #18 of 85

AYou mean, multiplying my costs by three for a price for the customer [B]isn't[/B] the right way??

Analisa Posted 23 May 2014 , 6:11pm
post #19 of 85

This makes my head hurt everytime. Would love to know a foolproof way

MimiFix Posted 23 May 2014 , 6:21pm
post #20 of 85
Quote:
Originally Posted by AZCouture 

You mean, multiplying my costs by three for a price for the customer isn't the right way??

Caveat alert: the standard pricing formula (multiply by 3 or 4, wholesale/retail) used in the baking industry, is an accepted and accurate business practice. However, it applies only to products with a relatively low level of labor, such as drop cookies, muffins, coffeecakes, rolls, etc. For labor-intensive items such as wedding cakes, that require a significant amount of work, the method differs.

 

If you're interested in this method of pricing, use the search function on this page.     

savannah1986 Posted 24 May 2014 , 5:46am
post #21 of 85

AThank you all so much for your advice. It sucks to know that I got screwed so bad :( I think what I'm going to do is visit the nearest bakery (we don't have one here, in surrounding towns we do though) and order a few things from them based on things I can make and see what their costs are. Pricing is so difficult, I feel I bit off more than I can chew :(

as you wish Posted 24 May 2014 , 10:21am
post #22 of 85

AJust one other little thought, if I may. A couple of people already mentioned that taking good pictures is important; in the future I am sure you will take that into consideration. For the pictures you have already taken, though, you can just crop out the background clutter and it will make a big difference. Allow me to demonstrate! :) Original: [IMG]http://cakecentral.com/content/type/61/id/3240508/width/200/height/400[/IMG]

Cropped: [IMG]http://cakecentral.com/content/type/61/id/3240509/width/200/height/400[/IMG]

Norasmom Posted 24 May 2014 , 10:42pm
post #23 of 85

Quote:

Originally Posted by savannah1986 

Thank you all so much for your advice. It sucks to know that I got screwed so bad icon_sad.gif I think what I'm going to do is visit the nearest bakery (we don't have one here, in surrounding towns we do though) and order a few things from them based on things I can make and see what their costs are. Pricing is so difficult, I feel I bit off more than I can chew icon_sad.gif

This is not the best way to figure out what YOU should charge.  My local bakeries are less expensive than I am.

howsweet Posted 24 May 2014 , 11:24pm
post #24 of 85

Are you selling the same product your local bakeries sell, but getting more for it?

Norasmom Posted 24 May 2014 , 11:47pm
post #25 of 85

No and that's why they are less expensive.

howsweet Posted 25 May 2014 , 12:26am
post #26 of 85

So, to me,  that means it's useful to check out the bakeries. It's helpful to know what others are charging even if your product is not exactly the same. If you had no idea at all what to charge for your product, but you tried theirs and learned you're selling something better, then you'd know to at least charge something more than what they charge. You extrapolate based on what else is out there.

Norasmom Posted 25 May 2014 , 12:38am
post #27 of 85

Well, technically, I didn't say it wasn't a way to do pricing, I said it wasn't the best way to do pricing.  The best way to do pricing has been discussed quite a bit on this website so hopefully OP can read through.

costumeczar Posted 25 May 2014 , 1:59am
post #28 of 85

So you got $48 for those if you charged $2 each...On average my net is about 54% of my gross income, so for argument's sake let's use that. Which means that if I made those I would have been left with about $25 once all my expenses were paid (including advertising, insurance, ingredients, taxes etc). If I spent three hours on those that means I would have made a little more than $8 an hour. Four hours would have been  $6.25 an hour. Five hours would have been $5 an hour. Taking all the time you spent on them into account, including talking to the customer, shopping, cleaning, decorating, making the flowers etc, only you can decide if $5 an hour is enough for you to be making. I would personally prefer to take a nap for an hour if someone said I could work for an hour for $5 or sleep.

howsweet Posted 25 May 2014 , 2:43am
post #29 of 85
Quote:
Originally Posted by Norasmom 
 

Well, technically, I didn't say it wasn't a way to do pricing, I said it wasn't the best way to do pricing.  The best way to do pricing has been discussed quite a bit on this website so hopefully OP can read through.

The OP said she was going to check out her competition which is absolutely necessary to come to an accurate determination of price. You come in and tell her it's NOT the best way, but you're not going to tell her what is?

 

Since you know it's not "the best way to do pricing" then you must know what IS the best way, right?

howsweet Posted 25 May 2014 , 2:48am
post #30 of 85

Quote:

Originally Posted by AZCouture 

If you consistently have trouble selling those at that price, and you can't find customers to pay more, you might just be in an area that can't support a business like that. Sometimes it just can't be done. So you might be able to drop the level of detail you offer, and only sell simpler items better suited to smaller budgets.


This is good advice.

Quote by @%username% on %date%

%body%