Sucker For Underpricing!

Business By SweetAsLemmons Updated 9 Dec 2005 , 6:50pm by HEAVENLYSWEETT

SweetAsLemmons Posted 22 Oct 2005 , 1:52am
post #1 of 68

Hello everyone. icon_biggrin.gif I've been decorating cakes for a few years but only recently decided to make a business out of it. I'm no math wiz or business woman, so pricing does present a challenge.

My biggest problem comes when someone asks "How much would you charge to do a _____ cake for ___ people?" I feel like a deer caught in headlights. Too many times have I been suckered into underpricing a cake to the point where end up working for pennies. icon_cry.gif It's just that I'm afraid quoting a price that's too high will result in no clients. Pathetic, I know.

A woman at work asked me to make a cake for a retirement party. I asked her what kind of budget she's looking to stay within and she replied "Well, at costco they sell 1/4 sheets for around $15 dollars so around that range" icon_mad.gif Now, I know that store bought cakes are no competition for custom homebaked goods, but how do I explain this to her without making her feel bad?

Also, how can I develop a quick way of quoting cakes?
Help! Advice! Please!

And thanks for reading! thumbs_up.gif

67 replies
melony1976 Posted 22 Oct 2005 , 2:40am
post #2 of 68

Hi there and welcome. The first thing I want to say is that store bought cakes hold no competition to a home made cake. I'm sure she knows this because she's wanting to buy one from you and not costco. You could politely tell her that if she's wanting to pay $15.00 then it's probably best if she buys it from costco. Just tell her you put alot of time into personalizing a cake and that yours are alot more flavorful, just explain to her and keep a smile on and I bet she'll still buy from you if she wants quality over savings.

There is also a pricing matrix that you could use to help you price your cakes I hear that is very helpful.

Good Luck, Melony

MrsMissey Posted 22 Oct 2005 , 2:48am
post #3 of 68

Here is the link to the price matrix.

Another fiarly accurate option is the 3x method....price out everything for the cake and then times it by three and adjust accordingly!

Oh yeah...a big welcome to Cakecentral!! We are glad to have you on board!!

peacockplace Posted 22 Oct 2005 , 2:49am
post #4 of 68

Sometimes I have to take a deep breath when the price part of the conversation comes up. I've found it's easer to come up with some kind of price list to stick to than to try and give a guess on the spot. Plus I always did it for less before I set some standard prices. Now I quote my price without flinching... most of the time!

melony1976 Posted 22 Oct 2005 , 3:00am
post #5 of 68

I barely sold my first paid cake last weekend and I was so out of the loop on what to charge. I wasn't even sure if my cakes were good enough to put a price on yet but I sucked it up and charged.

The first was a 1/2 sheet and I charged $20.00 and the other was a cross cake that I made out of a 1/2 sheet and I charged $25.00.

Probably not enough but It's a start.

alimonkey Posted 22 Oct 2005 , 3:09am
post #6 of 68

Melony - that's not enough for sure. Can you even get a half sheet from Wal-mart for that?

There's no shame in telling the customer you need to get back to them with a price. If you're not sure, don't put yourself on the spot, just go home, do some figuring and call her back. No problem! icon_biggrin.gif

melony1976 Posted 22 Oct 2005 , 3:21am
post #7 of 68

yeah I know I think with me my problem is that I'm still not convinced I'm ready to actually charge. Although I am proud of this weekends cakes. I'll post them soon to get everyones opinion.

Another thing that's hard is that people are used to getting all my practice cakes for free and I don't know how to tell them that the freebies are gone.

My sister in law called me and asked me for a 1/2 sheet practice cake for her sons football team, I was like sorry it's not practice anymore so we'll see if she still wants me to do it.

alimonkey Posted 22 Oct 2005 , 3:34am
post #8 of 68

Like others have said before me, it's better to get people used to paying full price from the start. That way they aren't shocked twice - once at actually having to pay and again when you raise your prices because you're so stressed out you can't breathe and you're only making $5 on the darn cakes anyway. Maybe you can approach it like this: the first 10 customers get a (say) 25% discount off your regular prices. Just make sure the customers know that. Tell them, for example, "This cake will cost $30 but I'm giving a 25% discount on my first 10 cakes, so that will only cost you $22 this time. The next one will be the regular price unless you order again soon."

Hold your ground on your prices. They need a cake more than you need to make one for pennies profit.

melony1976 Posted 22 Oct 2005 , 4:24am
post #9 of 68

Very well put. I need to get a back bone really soon, lol.

SweetAsLemmons Posted 22 Oct 2005 , 5:05am
post #10 of 68

I'm in the same boat as melony. I'm always afraid to charge what I truly believe my cakes are worth for fear losing potential clients. I am very confident in my abilities, but I always manage to stupidly bend over backwards to just to please a bunch penny pinchers and get another cake in my book. icon_redface.gif I'm doing the best I can to increse the number of cakes in my portfolio, yet I feel that in order to do that I need to get the job.

I guess I do need to get my prices in writing. Maybe that will help me stand my ground a little better.

Now a question. What would any of you charge for a 4 tier, fondant covered, gum paste flower cascading cake (AND each tier is a different flavor)?

Are there any idiot proof formulas for pricing anyone knows about?

Thanks a million!

alimonkey Posted 22 Oct 2005 , 5:13am
post #11 of 68

Welcome to CC! (Forgot to mention that earlier)

I would charge absolutely no less than $3 a serving and very possibly more. A lot of it depends on your market - whether you're in a small town or big city. I don't do gumpaste flowers yet, so I can't really say, but they're pricey.

KayDay Posted 22 Oct 2005 , 5:45am
post #12 of 68

I charge $4.00 per serving.

SweetAsLemmons Posted 22 Oct 2005 , 5:50am
post #13 of 68

Thank you for the warm welcome's! icon_lol.gif

b]Example of a situation:[/b]
You hear someone discussing throwing a potluck, birthday party...etc. You think, "if I could make the cake, it would be a good way to show my work/advertise". How do you offer to make the cake without seeming pushy, or without them thinking you'll charge Wal-Mart prices. In other words, you want the task, but you want them to know you're not working for cheap here. (Nicely icon_biggrin.gif )

Here is what happened to me. I offered to make the cake (1/4 sheet) and the lady thought it would cost around $15, which is ridiculous! I felt like saying "Well if you're gonna be cheap about it NEVERMIND". I mean, its only fair to get paid accordingly for your work, right? But how would I decline the job then when it was I who offered? I think " why did I open my mouth?" tapedshut.gif

MakeItYours Posted 22 Oct 2005 , 5:56am
post #14 of 68

I know how you feel about underpricing your cakes. I just did it again to myself tonight. This lady wants a 1/2 sheet banana cake with a 12" round chocolate stacked on top, with red roses (of all colors), for a 60th anniversary cake. I have told myself over and over to tell any client that I would call them back with a price. Instead of doing just that, I quoted her $40.00. I think maybe I should have charged her closer to $60.00. Oh well, I guess I will get the hang of this sooner or later.

SweetAsLemmons Posted 22 Oct 2005 , 7:06am
post #15 of 68

Well MakeItYours, I hope its soon, otherwise we'll both end up rocketing to the poorhouse! icon_biggrin.gif I think $60 sounds about right. I mean, considering that most of these projects are customized and are new "first timers", it's just so difficult to come up with a well calculated price on the spot! You never really know what to expect. What happens when someone asks for something out of the ordinary, like a cake-purse? icon_eek.gif What price do you quote then? I can just picture my dumbstruck face at the request already! He He.

okieinalaska Posted 22 Oct 2005 , 9:27am
post #16 of 68
Originally Posted by SweetAsLemmons

Are there any idiot proof formulas for pricing anyone knows about?

I don't know how idiot proof it is, LOL but the cake matrix figures out how much you should charge for your cake three different ways and then gives you an average. icon_smile.gif

One way is per slice, the other way is by the hour and the third way is charging by mark up. You set your cost per slice ahead of time (you can easily change it later if you want, same with how much do you want to get paid per hour...and you even input how much your cake mix costs, eggs, milk etc...

The thing is, it only works if you a) tell the customer you will get back to them with the quote and b) stick to the price and not undercut yourself.

If you don't know excel this is a great chance to learn it. : )
I love excel, I even balance my check book with it. Maybe it would be worthwhile to have a little tutorial on how to customize and use the cake matrix. thumbs_up.gif

bubblezmom Posted 22 Oct 2005 , 6:37pm
post #17 of 68

Let me start by saying that I don't sell cakes. However, my family and friends have bought many homemade products from others. If you are selling cakes on the side for a little extra money, then my suggestion is to have a set price based on the size of the cake. Keep it simple. Then you won't underprice yourself and you can charge for extras like fresh strawberries, giant fondant bows, shaped cake or whatever else the customer dreams up. It also makes it MUCH easier to get business by word of mouth. Someone can say, "Becky will do your birthday cake for $40" instead of "Becky charges $4 slice."

SweetAsLemmons Posted 22 Oct 2005 , 8:49pm
post #18 of 68

What would any of you ladies charge for a 1/4 sheet, buttercream iced with simple borders, BUT with gumpaste flowers instead of buttercream or royal icing ones? (not too many though).

okieinalaska Posted 22 Oct 2005 , 10:02pm
post #19 of 68

I still get confused over the sheet cake sizes.

What are the measurements for the 1/4 sheet cake? I don't do gumpaste flowers but maybe someone else could help you with that. : )

christinasconfections Posted 23 Oct 2005 , 12:23am
post #20 of 68

SweetAsLemmons - You sound just like me. I've been doing cakes a couple of years now but just decided to start selling them for some extra money. People asked me how much for a certain cake and I would say, I'm not sure and felt like I lost a potential customer. So what I did was this: I put together a portfolio with a description of each cake below it and what occasion it was for. Inside the front cover I put my business cards and the very last page of the album is a price sheet. It lists all of my pan sizes, approximate number of servings and the associated price. I also make sure to note that the prices are for basic decorating and filling and that it would cost extra for special decorations or recipes. Then at the bottome I list the basic cake flavors, basic frosting flavors. This way if someone asks you about a cake you can show them your portfolio and they can see your prices upfront and there is no worries about pricing unless they are wanting something special in which they know that it will cost more than what is listed.

I just did a black and white cake for my old place of employment and only charged $40 (I gave her a quote before I did my price list) and realized I was off at least $20. I told the person who ordered it that I was off in my quote that way just in case she orders from me again she won't be expecting such a low price again.

Good luck and welcome!

SweetAsLemmons Posted 23 Oct 2005 , 1:42am
post #21 of 68


Hey, and thanks for the welcome! icon_biggrin.gif

What a good idea! Too many times have I blurted out a price only to get home, calculate, and realize I suck at that! icon_cry.gif But having a list with me would relsolve this problem.
Do you ever have trouble letting a job slip through you hands? I mean it makes TOTAL sense for you to pass up a cake if the client wont be fair about it, but I always feel so bad about it. Just wondering.

Thanks for the info!

melony1976 Posted 23 Oct 2005 , 3:44am
post #22 of 68
Originally Posted by okieinalaska

I still get confused over the sheet cake sizes.

What are the measurements for the 1/4 sheet cake? I don't do gumpaste flowers but maybe someone else could help you with that. : )

A 1/4 sheet is a 9x13 or 9x12.

Just like most people that I chat with here I too underprice. For me I think that I'm not quite at the stage of decorating where I can actually charge some of the prices that I've seen on here.

I had my first paid cake orders this past weekend. It was two 1/2 sheets on the same day I almost went crazy. LOL

melony1976 Posted 23 Oct 2005 , 3:45am
post #23 of 68

I'd also like to see what everyone charges for their cakes just to get an idea.

djjarrett88 Posted 23 Oct 2005 , 4:58am
post #24 of 68

I think we are our own worst critics. I have found that even when I feel I have done a sub-par cake, people still love it. It is a forgiving craft. I have don about 50 cakes in the past year and sell them for the following prices: 1/4 sheet $20, 1/2 sheet (with character on top or computer generated photo) $30, Full Sheet $55.

I used to sell for $5 less and raised the prices and I still get more orders than I really would like. I have a regular job too.

The bottom line is it comes down to confidence in your product. People tell you how good it tastes and how great it looks. We need to believe them and charge them accordingly becuase we all put tremendous effort into even the simplest cakes.

christinasconfections Posted 23 Oct 2005 , 3:53pm
post #25 of 68


To be honest I haven't had anyone not order from me due to prices. I think my prices are fair; approx $2 per serving and I charge at the highest serving suggestion. For example if a cake serves 8-12 people I will charge $24 for that cake, provided it's a simple smooth icing and simple decorations. I try not to compare myself to places like our local grocery store because there is no comparison, though I do my research to find out what is out there. Also, people can order whatever their hearts desire unlike the local store.

I also like to talk to people about providing them with a quote first and then have them tell me if they want to still order with me after they know how much it is, that way it's not a real order until they accept my quote (it's a frame of mind thing icon_smile.gif

I definitely agree with djjarreett88, we are our own worst critics. Your time and talent are worth something (definitely more than the local grocery store).

cakesbycathy Posted 24 Oct 2005 , 6:43pm
post #26 of 68

I don't know how many male bakers we have out there, but I think part of the problem so many of us have with fairly pricing our cakes is that we are women!
I think it tends to be more in the female nature to want to please people. Top that with underestimating our decorating ability - we end up underpricing (and then kicking ourselves later!)

I really like the idea of having a portfolio with a price list already in there is great! Just leave it in the car or your bag, and you can always be ready to quote a reasonable price.

atkin600 Posted 24 Oct 2005 , 7:02pm
post #27 of 68

I'm at a point where I'm trying to decide if this is worth taking time away from my kids. I think of a price, then when the cake is done I wonder if it is really as good as I am pricing it for. I need to come up with a price list as well. I don't think I've ever charged more than $40 for a cake. Most of my cakes I've sold for between $25 and $35. They are all so different I don't know how to charge for them. My cookies are a problem as well. I have been charging between 1.00 and 1.25 per cookie. It seems like it takes me the same amount of time to make two dozen as it does to make four dozen. Alot of the work seems to be in baking the cookies and just getting the icing prepared. Another problem is that most of my customers are friends.

djjarrett88 Posted 24 Oct 2005 , 8:50pm
post #28 of 68

I am a male baker/decorator and I charge too little compared to others. I am in a smaller area and feel being as close to grocery store prices the better. I know I am selling myself short, but I'm definately not losing money. Yes, time is money but my time is spent fiddling around so why not put it to good use. If I only make $20 profit on a $30 half sheet cake that took me the better part of two nights to bake and decorate it is still $20 I didn't have before. Sitting on my couch watching TV pays me nothing. The bottom line is I do it for the creative enjoyment first and the money second. When I'm in the grocery store and see someone pickup a cake I think to myself, "Boy are they missing out". The point is many of us don't do it for the money. It is a hobby. I don't want to price myself out of the market and lose opportunities.

Probably after the first of the year I will raise my price another $5 for a half sheet to make myself feel like I'm not getting cheated too much.

Where you can really make decent markup is on the larger cakes, ie full sheets, weddings, etc. I just received $175 for a 3-layer full sheet cake. That is good markup and the decorating part is still about the same work.

okieinalaska Posted 24 Oct 2005 , 9:42pm
post #29 of 68
Originally Posted by djjarrett88

I just received $175 for a 3-layer full sheet cake. That is good markup and the decorating part is still about the same work.

hi djjarrett88, just curious, was that three layers of cake or do you mean you torted it into three layers?

If it was actually 3 sheet cakes stacked, holy moly that's a lot of cake, LOL.

djjarrett88 Posted 25 Oct 2005 , 12:41am
post #30 of 68
Originally Posted by okieinalaska

hi djjarrett88, just curious, was that three layers of cake or do you mean you torted it into three layers?

If it was actually 3 sheet cakes stacked, holy moly that's a lot of cake, LOL.

It was a total of 18 cake mixes, 6 1/2 sheet cakes, trimmed, torted and filled on each layer.
Almost broke my back getting it in the car. Got help when I delivered it to walk it into the room. I'm guessing 40-50 pounds with the plywood base, but I'm not sure. My heaviest cake to date.

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