Undercutting Vs Competitive Pricing

Lounge By FlRugbyChick Updated 24 Sep 2014 , 1:27am by FlRugbyChick

FlRugbyChick Posted 24 Sep 2014 , 12:26am
post #1 of 8

AHow can I tell if I'm undercutting or just trying to price competitively? Is it wrong that I think with my 6 months experience I should charge less than someone who's been doing it for 6yrs? I asked a local home baker about a cake on her website and she said it cost $100. I would have asked $70 if I made it. I do think her work is cleaner than mine (not saying I'm sloppy). Should that factor in?

7 replies
AZCouture Posted 24 Sep 2014 , 12:35am
post #2 of 8

I priced myself high right out of the gate, from day one. There was one other person in town that did work like me, and when I got my pricing down (not considering hers really at all), I was higher.


But I also didn't sell until I put a LOT of time practicing and researching the business as a whole first. I studied the forums here, I picked the brains of established business owners like our very own @costumeczar , the great @snarkybaker , and some others.


I read countless stories of woe, of disasters, of refund situations, etc. and took note of how to handle them. More importantly, how not to handle them. 


I could go on and on, but bottom line is, I made sure there was a market that could support what I did, at prices I would be satisfied with, and I went after the high budgets right out of the gate. I didn't consider my lack of experience with customers to be a determining factor when it came to pricing. I knew what I was doing, and I knew that I could relatively handle any situation that would come my way.


Unfortunately, you usually see people just jump in by creating a Facebook page, having giveaways, and offering discounts to everyone under the sun. 


Too many people taking their momma seriously when she says "oh you should open a shop!" ;)


Great question, will be interesting to see other replies.

AZCouture Posted 24 Sep 2014 , 12:38am
post #3 of 8

And just out of curiosity, why thirty dollars less? What made you come to that price? 

AZCouture Posted 24 Sep 2014 , 12:47am
post #4 of 8

I just skimmed thru some of your posts/replies/questions. Honestly, it doesn't sound like you're ready for business at any dollar amount yet. Carved cakes for $30? Customer buying ingredients herself with food stamps to cut the cost? I don't see the point in selling unless you really have something that isn't easily obtained anywhere else. Otherwise, you're just competing with Walmart. Please don't take that as a slam, it's just reality. 

FlRugbyChick Posted 24 Sep 2014 , 12:56am
post #5 of 8

ABefore I contacted her I thought "that's about a $70 cake." I'm not saying that after the fact I thought, "I could do it for $70." Pricing is my biggest problem. So far I have made 3 cakes for cash, and each time I thought to myself (about half way through) I didn't charge enough.

AZCouture Posted 24 Sep 2014 , 1:05am
post #6 of 8

I don't want you to take my comments as a dream crushing negative comment. It's just honestly, there are so dang many cake businesses out there, why not stand out, and make as much as possible from the start? Rather than start off as just one more cheap person, with the same old cakes. 

Norasmom Posted 24 Sep 2014 , 1:21am
post #7 of 8

What FromscratchSF Said, that's right on.  If your cakes are perfection you can charge a premium and not bat an eyelash.

It's okay to charge a little bit less if you are a beginner, but not $30 less, that price says you aren't talented enough to charge more.  And, your cake has to be good enough to sell.

Also, You need to make a living wage and ideally, you want to make a decent profit.

FlRugbyChick Posted 24 Sep 2014 , 1:27am
post #8 of 8

AI don't think you're bashing me. My thought was why not serve the customers who would see the high quote then just run to the grocery store. My thought was as I get better I would charge more and then find higher paying customers. Yes I charged $30 for the carved dolphin, but it had 15 servings at most, and was easy to make. I have decided though that I will now charge at least $50 for all my cakes.

I also think part of my problem is that I am a stay at home mom. I make about $40 a week from babysitting. My bf works full time and pays the bills. I know for some people cakes pay the bills, but to me any profit is a profit. I know I shouldn't think this way though. If I sell my cakes "cheap" people will always want "cheap" cakes from me.

Quote by @%username% on %date%