Am I I Undercharging?

Business By yatziriascakery Updated 22 Oct 2016 , 3:04pm by SweetNeddy

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yatziriascakery Posted 20 Oct 2016 , 5:17pm
post #1 of 15

Ok so I got emailed yesterday asking for a wedding cake and got the following picture. I calculated my cost as half icing (2.50/slice) and half fondant (3.50/slice). She wouldn't want any flowers but I always make clients get their flowers and I'll place them when setting up.  


My question would be since I would be doing a three tiered cake for 100 people am I undercharging by asking for $300? ((50*2.50)+(50*3.50)=300)


[postimage id="5386" thumb="900"]

14 replies
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SweetNeddy Posted 20 Oct 2016 , 6:21pm
post #2 of 15

Hi... I think that of you are basing your prices off of what you normally charge for fondant and/or but thread- then yes - you are under charging. This fondant work isn't just "cover and go"... there's extra work in getting the folds and pleats... extra work to make sure the opening is even on both sides and that it's centered over just the right spot. The black portion of the cake looks like fondant as well... with the images maybe painted or airbrushed - but either way - it's not typical buttercream or fondant work. This cake will take extra time, and time = money.

At least... that's my humble opinion. 

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-K8memphis Posted 20 Oct 2016 , 10:52pm
post #3 of 15

i agree with sweetneddy

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Alohilani Posted 20 Oct 2016 , 10:56pm
post #4 of 15


Is this for a close friend or family member?  I'll explain to you why I'm asking later. Let's talk about the price first.  In one word yes, you're underpricing. Prices vary depending on which city, state and country you're in. However, $2.50 and $3.50 is already wayyyyyy to low to start with for plain buttercream and plain fondant like the previous poster said which doesn't include any decorations.  Are you calculating all your expenses, overhead, time, ingredients? All that for $300? How much are you paying yourself for an hour? It can't be much at all. This cake has a lot of detail. The draping will take some time to get it right and match on the other side. Also that is not buttercream, it's fondant google the picture and it will take you the original designer of that cake. Then you have the chalkboard style side, that too will take some time. It's also fondant and it's hand painted. 

Remember when I asked if it's for a relative or close friend? If it is, then you shouldn't be taking any money at all. It needs to be a gift. You can't even accept any money for ingredients.  I'm sure you're aware of the problems with Star Wars and copyright. Disney owns the rights to Star Wars, let me say that again DISNEY owns the rights now  and they aren't shy about going after people who infringe on the copyrights of anything they own. The $300 you're going to charge for this cake won't even cover half an hour for a good attorney. It's not worth it. Disney has an entire department dedicated to this kind stuff. Google the bakery that made the birthday cake a few years ago without permission. I'm not trying to scare you, it's a beautiful cake but without written permission, you're taking unnecessary risk.  If you decide to do it without the Star Wars characters then $300 would still be a little lower in my humble opinion. 


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yatziriascakery Posted 21 Oct 2016 , 1:50am
post #5 of 15

Thank you for the info. You actually did scare me enough to completely change my mind and just told this client that I wouldn't be able to do it and I could do something else like their names for example. Also no she wasn't a friend or family.  

Another question what would you charge for this cake? I originally wanted to price 3 for buttercream and 4 for fondant but people would always not respond to the cake quote. I even had a lady say she wouldn't pay 300 for a three tiered cake when she had previously stated that bakeries were charging her 600. She also told me that she wanted to pay 75 dollars for that same three tiered cake which was supposed to be wedding themed. 


Anyways what would be your base price for cakes and how do you determine what is an elaborate design that requires an extra charge as well as how you determine how to charge for that extra detail?

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Cwelch0011 Posted 21 Oct 2016 , 3:00am
post #6 of 15

Wow! Any one that would do a three tier cake for $75 is crazy! There is absolutely no way that would cover all your ingredients, bake time, decorating time, etc! I live in a small town where the cake prices have to be a lot cheaper than say prices in NYC, but I would barely do a 2 tier for that! (Walmart charges a little over $60 for a 2 tier) ...You should be charging more than Walmart for a custom cake!!! That being said, the most important thing to do when pricing is think about the time it will take you to complete the cake! Pay yourself for that time!!! What is your time worth? $10/hr? $12? That's up to you! Always deduct your ingredients! Don't forget the board, dowell rods, etc! Count everything that goes into the cake! Gas to deliver the cake, the extra time it will take you to set up the cake (especially if having to add on flowers) take everything into consideration and charge accordingly. It's better to do 1 or 2 cakes and get paid correctly, than to kill yourself making 10 cakes for the same price! IMO :)

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BakerSupreme Posted 21 Oct 2016 , 4:13am
post #7 of 15

@Alohilaimay 

May I ask why you think this should be a gift? 

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julia1812 Posted 21 Oct 2016 , 7:01am
post #8 of 15

Not knowing the size and flavours I can't tell exactly but not less than 900$ for the star wars cake (copyright might be an issue though...)

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LelekBolek Posted 21 Oct 2016 , 10:35am
post #9 of 15

Hi @yatziriascakery ‍. You got your answer and some advice from pps: they are right, you are undercharging.

So just an opinion... Copyright - yes, issues there to address first.

As pictured, cake is close to $900, assuming the flowers are fondant, and depending on tier sizes. For a 3-tier (or 100 servings) of this design my price would start around $550, and would only go up - depending on additional expenses like transportation, etc. 

As far as gifting cakes. I sometimes do gift cakes, but not at this scale. Basically, if I were to spend $60 on a gift for a friend, but I know they would rather have me do the cake (a small party size), I would do something, maybe with a little extra flare than $60 would allow.

Most of are my friends, do not ask for gift cakes, knowing from talking to me, or seeing my work, how expensive and labor-consuming these can be. But I had orders for larger cakes from friends, and sometimes I will deduct a "gift" amount from the total price, unless I am giving them another gift.

Wedding cakes, IMO, are especially not a gift commodity even among friends: why would anyone expect a cakemaker to give an upwards of $600 of a "gift"? 

Donations are different. They are donations, and are free. But it is your decision to make a creation on your time, with your heart in it, and let it go to a good home for a good cause - auctioned out, raffled out, or otherwise. 

These cakes are no joke (if you wanted a joke, ask that client to tell you again she wants a 3-tier elaborate cake for $75, and laugh, laugh, laugh...), your labor is no joke, your time is no joke, overhead and other costs are real. Treat yourself with respect, and do not apologize for, or appear unsure of your pricing. 

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yatziriascakery Posted 21 Oct 2016 , 3:32pm
post #10 of 15

Hello @LelekBolek ‍ thank you for the information. I've done a baptism three tiered cake which was a gift they just paid for materials. I spent about ten hours doing it but it was also a naked cake. Let's say that I pay myself 10 dollars an hour that would be about 100. If I now charge 250 for that cake should I add the 100 to the 250 and just increase my per slice price? 

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yatziriascakery Posted 21 Oct 2016 , 3:34pm
post #11 of 15


Quote by @yatziriascakery on 1 second ago

Hello @LelekBolek ‍ thank you for the information. I've done a baptism three tiered cake which was a gift they just paid for materials. I spent about ten hours doing it but it was also a naked cake. Let's say that I pay myself 10 dollars an hour that would be about 100. If I now charge 250 for that cake should I add the 100 to the 250 and just increase my per slice price? 

This isn't the cake:


[postimage id="5394" thumb="900"]

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LelekBolek Posted 21 Oct 2016 , 6:20pm
post #12 of 15

I am sorry, @yatziriascakery ‍ , I am not sure what you are asking. Is the cake on the photo - the cake you gifted for baptism, or isn't it? 

Basically, Number of hours X your hourly wage price, + cost of ingredients and materials + overhead + profit mark up is the beginning of it.  Consultations, designing, shopping time - those are all additional time and costs.  Any extra embellishments, and so on. 

Pricing of a cake is not an easy thing to do, and you have to factor in the area where you work, delivery fees, etc. There are many articles, and courses taught on the subject of how to approach the pricing. 

I cannot give you an advice and tell you "take this as a Bible!", just because it is not in my power to do so - this is just an internet forum.

But you should count up all your expenses and labor, and draw a baseline for your prices. Then ad up per slice for any design or material upgrade. Some people have basic price per slice for buttercream VS fondant covered cakes, and mention that additional design and embellishments will cost more. When discussing a design of a cake, it is important to establish that basic price per serving will produce a basic level of decorated cake, and then talk more elaborate. You can't back down from absolute basic price for your work. At least that's my approach. If part of the cake is a gift, then just see what is the total of the cake comes up to, and take "off" what your gift amount is. Say, cake price ads up to $600, and I really like the recipient(s), they are my friends, and I am attending the party, then I will knock off a 100 - or whatever is appropriate. 

But once again, this is an internet forum "opinion", not a written-in-stone rule. 

The important thing is to not sell yourself short, know your costs, and never feel obligated to follow the customer's lead to make them a free cake. I mean, in polite way. )))

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yatziriascakery Posted 22 Oct 2016 , 3:58am
post #13 of 15

@LelekBolek ‍ I'm really trying to figure out a system and I'm really sorry if I bother you. So let's say I charge for example 200 for the cake (materials and other expenses) plus 150 for my time (the cake I showed you took me 10 hours from my home) for a total of 350 on a basic design and it goes up from there for 100 servings. Would that be an acceptable formula? Let's say something like this: 

[postimage id="5410" thumb="900"]

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LelekBolek Posted 22 Oct 2016 , 11:13am
post #14 of 15

@yatziriascakery ‍ You are not bothering me. Most of us have been there.  You are on the right track. It is just that I can't tell you flat out: "this! charge THIS for your cake" - it is something you need to decide. I can only tell you an opinion.

If you are a business, then by setting price for your product, you are trying to return on investments and make profit. Undercharging will make you sink. Breaking even - is breaking even, it is neither here, nor there: you got paid, everything you got goes back into your business an recovers what you spent on making the product, but you won't be buying a new cake pan, or something :-). But profit, and how much you can up-charge to make it, depends on many factors, such as demand/market in your area, competitor's prices, need to pay rent and permits for the store front, utilities cost, etc.

I am not trying to give an economics lessons, or discourage you at all - not by any means. Just giving you an idea that although complex, a lot needs to be considered for a seemingly simple thing like "how much to charge for this cake".  

Even at home, the oven, fridge, dishwasher, mixer, other appliances are working on extra electricity to bake the cake. Sometimes additional A/C must be ran, to keep the kitchen cool while working with intricate designs. At home bakers are "their own staff" - one and the same person is the baker, the decorator, the cleaning crew, and a business manager. Have you paid yourself for just decorating, or did you include the cleanup time? And so on.

A 3-tier cake for 100 servings, at $350, gives you 3.5 a serving, which - in buttercream and basic design as shown above - is doable, I guess.

Once you start talking design, you start adding for decorating it. Although then - is 10 hours of labor used just to put the cake together, or is that including decorating it? I have 3 levels of prices for my product, none "match" the grocery store, but I am very up-front about my cakes not being the grocery store variety, so the potential clients are made aware I am not cheap.

After I calculated my costs, and how much I pay me, and how much profit is reasonable, I set prices per serving, per a level of decorating: X for basic, XX for detailed, XXX for elaborate or special orders.  The basic price usually ends up slowly moving up, into "detailed" category, when people realize they want a lot more than simple scroll border with maybe confetti thrown in on it. But I can't give out all the bells-and-whistles-and-glitter for free, so if they want more - they pay more, and it is written down and signed on as a price we agree on, BEFORE I fire up my oven, or go shopping for ingredients.  Oh, and I get a 50% deposit upon agreement.  

I hope this helps, good luck!

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SweetNeddy Posted 22 Oct 2016 , 3:04pm
post #15 of 15

I discovered early on, when I was selling baked goods at farmers markets, that there's  an important decision about pricing: you can let your market dictate your price, or let your price dictate your market. What are comparable bakers/bakeries charging (NOT supermarket bakeries)? If the going rate in your area is $5/slice, I don't think you should come in at $3.50. It's  ok to be competitive, but not ok to undermine your fellow bakers  (you might need their help some day). You don't want to be known as the "cheap" cake lady.  Offering a lower price option for very basic designs, as already mentioned, is a great idea. It's also ok to charge more - as long as your skills warrant the higher price AND there is a client base willing and able to pay the higher price. You might make beautifully detailed cakes, or very intricate carved cakes, easily worth $15/slice - but if your client base can't, or won't, pay those prices, you won't sell many cakes. That might be OK- nothing wrong with being a specialty baker - very exclusive - if there is someone willing to pay those prices.

So... figure out your costs  (all of them)... learn your market.... and figure out your goals. If you're a home baker looking to have a storefront - charge "storefront" prices now.

Good luck.. and BTW, I think we ALL hate pricing!



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