Time To Lower My Prices?

Business By CakeBlessed Updated 6 Oct 2015 , 12:18am by eaamckenzie14

CakeBlessed Posted 21 Sep 2015 , 2:35pm
post #1 of 14

There are several home bakers (cakers) in my town and surrounding area who advertise on social media. I, too, have a Facebook page advertising my business. As I have time during the day from my regular 8-5 job, I scroll through some of the several 'yard sale/mom' sites looking for pics of cakes that people need for different occasions. And sometimes my friends, family and previous customers will 'tag' me in a comment to recommend me to that person. Over the weekend, a woman posted a pic of a 3 tier Lion King cake with TONS of fondant detail that she needed in 2 weeks and SHE stated how much she would be paying for it. Yep, SHE stated her price. $100...I just kept scrolling. No way, I am #1 going to work with a customer who thinks I could do that for $100, #2 think that 2 weeks is enough notice for that elaborate of a cake and #3 thinks that she is going to set MY prices. And there were FIVE people who jumped all over that waving their hands to make that cake! Are they crazy?! But as I checked out their Facebook pages, they are getting all kinds of work! So, even though they are (in my opinion) not getting paid what their time and cakes are worth, should I lower my prices? BTW, I wouldn't have touched that cake for less than $175.

13 replies
Jedi Knight Posted 21 Sep 2015 , 2:43pm
post #2 of 14

The race to the bottom is short and fast.

Snowflakebunny23 Posted 21 Sep 2015 , 3:51pm
post #3 of 14

Short answer...no.  For the amount of work involved in that, they will be 'earning' probably a 5th of minimum wage per hour.  If that's what they want to do...fine.  Personally, I'd rather go and work part time as a mascot at the local kids play centre...you'd earn more and get to play in the ball pit!

Someone posted a picture on a local forum the other day asking if she was undercharging for a cake she had sold...she charged less than a quarter than what I would have for the same cake.  If they want to do that, that's their purgative but it makes me very very angry because it massively undervalues our industry.  That is then what people think it should cost and I am suddenly stupidly expensive.  I am not, but I value my time and will not make a 3-tier cake for £50.  Like I said...I'd rather be in a ball pit...

costumeczar Posted 21 Sep 2015 , 4:22pm
post #4 of 14

Don't lower your prices. The custom cake industry is in the toilet right now because of just what you're describing. Too many people doing cakes for way too little money, and it ends up with people expecting decorators to work for $2 an hour. 

If there are too many bakers in your area to earn a decent profit, you might have to look into changing your focus and going into baking other things. Maybe there's a market for dessert cakes that aren't decorated, or maybe you could do dessert buffets. You'll have to do that research, but it's at the point now where the supply in the market is far outweighing the demand, so people can get elaborate cakes for cheap. But it's never worth trying to keep up with people who are willing to work for nothing, that gets you exactly nowhere.

Jinkies Posted 21 Sep 2015 , 5:02pm
post #5 of 14

Totally agree with the others.  It is very frustrating, I know from experience.  Think of it this way- if you do one cake a month and make the same amount of profit as those other people who make 8 cakes a month, what's the problem?  Clearly, you're the smarter business person.

ladyonzlake Posted 22 Sep 2015 , 12:44am
post #6 of 14

No, don't lower your prices.  I too have people in my area doing cakes for cheap.  They are unlicensed and doing it from home and advertising on Facebook "garage sale" pages.  My minimum is $200 and $5 per serving and up and I'm sticking with it.  I get a lot of orders for the high end cakes so I don't consider those other businesses competition so hang in there!

Jeff_Arnett Posted 22 Sep 2015 , 7:19pm
post #7 of 14

I think you have to consider several things.  First and foremost....how does the quality of your work compare to the others who are willing to take this cake on for $100.  If your skills are more honed and the quality of your work is superior to theirs, then stick with your prices.  I wish I could say that you will attract all the business you need who will appreciate you level of attention to detail, but without knowing more about your market area I can't speculate on it.

If, however, these other decorators have comparable skills to yours, then you might need to take some time to access you pricing.  If it turns out they others can consistently turn out a product as good as yours, you will then likely have to lower your prices or else be willing to get less work than you desire. 

I know that might not be what you'd like to hear, but in today's "get it cheap economy", that's the challenge we face.  We see these celebrity cake bakers who make millions off of their cakes each year, but in reality, that's only a small portion of the hard working bakers out there who work for much less than they get paid.


CakeBlessed Posted 22 Sep 2015 , 9:58pm
post #8 of 14

Well, I thank you all for your advice. For now, I will stand by my prices and my work. Its not perfect, but I do have work booked up to keep me busy enough through the end of the year. 3 weddings between now and the end of November and 7 birthday parties and whatever else comes in. And of course I will have my grandchildrens' birthday cakes to make at no charge! We'll just see where things go from here! Happy cakin' guys!  

cupcakemama3 Posted 23 Sep 2015 , 1:03am
post #9 of 14

I agree with everyone else. I'm from a small town with lots of home based bakers. I am a nurse and a mom of three and do decorative cakes, cupcakes and gourmet cupcakes and other treats on the side. About three years ago I was getting tons of business. More than I had time to handle really. But to be honest, I wasn't making much off of my sales. Definitely wasn't being paid what my time is worth. I have since raised my prices. Yes, they are significantly higher than most local home bakers but I feel I do very good work. We leave near a fairly large city and my prices are lower than the bakeries in that town. So, I feel like I'm somewhere in the middle.  And, even though everyone is constant bragging on my work, I don't get much business anymore...BUT when I do I am actually MAKING $$$! That's important. I don't want to be baking someone else's child a cake for nothing when I could be spending time with my own. And, if I'm wanting to do a cake for fun or practice there is at least one birthday each month of the year from my family so I can just bake them a cake! Honestly, who can compete with those who just do cakes for hobby?? A lady recently contacted me about a short cake for her granddaughter. She wanted to make sure I did everything from scratch because she can't stand "store bought" etc. when I told he my price for buttercream simply decorated cakes started at $2 a slice, she almost died!  She is used to getting her cakes from a local home baker ( whom I know and who couldn't do the cake because her husband is ill)  that charges about $1 a slice or less.  I can't compare with that. And, I don't even think that's a bad price. But, like I said my time is worth it. 

SharonK1973 Posted 23 Sep 2015 , 1:29am
post #10 of 14

If anything, I would start raising mu prices to weed out clientele that are not worth my time. I used to make cakes for less than what bakeries charge and then realized I was setting myself up for never really making a profit. I came to the realization a few years ago that I would prefer to turn down a cake order and not lose money than to take one at a loss. Its now much better. People looking to get a cheap cake don't bother coming to me, and those who appreciate good work and quality products do. I'm also much happier... no resentment for making cakes that are cheaper than I think they should be. Plus one business person once gave me great advice : "always start with a high price. Its much easier to lower a price than to raise it." So by no means would I go any lower with my prices.

ladyonzlake Posted 23 Sep 2015 , 2:53am
post #11 of 14

I agree SharonK1973.  That's also why I set a minimum of $200.00.  I had people requesting $50 cakes, $30 cakes and I thought this is not what I want to be doing.  I needed to make it worth my time.  Now, I focus mostly on wedding cakes but for my repeat clients I do do celebration cakes.

costumeczar Posted 23 Sep 2015 , 12:14pm
post #12 of 14

I raised my minimum to $500 recently because of the number of cheapo bakers around here. I was getting people asking if I could match prices from people who were charging $250 for a three tiered cake plus 50 cake pops plus cupcakes. Raising my minimum eliminates the people who only want to base their buying on price, and I'm still booking wedding cakes. It's not worth my time to deal with a wedding cake customer for less than $500, since a $250 tiny cake will mean I end up making about $10 an hour once all the wedding business stuff is added into the time it takes per cake.

eaamckenzie14 Posted 6 Oct 2015 , 12:18am
post #13 of 14

Hi I just read your post and I don't think you should lower your prices either. You have to account for the goods and time it takes to make the cake. Just judging by what you have said I believe that 150.00 should have been the bare minimum for a cake like that and in my opinion that still low balling. I think a fair price is 175.00 and on the high end about 225.00. I wasn't sure if the cake was supposed to have tiers in it but if so that is going to factor in as well.

eaamckenzie14 Posted 6 Oct 2015 , 12:18am
post #14 of 14

Hi I just read your post and I don't think you should lower your prices either. You have to account for the goods and time it takes to make the cake. Just judging by what you have said I believe that 150.00 should have been the bare minimum for a cake like that and in my opinion that still low balling. I think a fair price is 175.00 and on the high end about 225.00. I wasn't sure if the cake was supposed to have tiers in it but if so that is going to factor in as well.

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