Home Bakers Who Undercharge...

Business By tarheelgirl Updated 17 Jun 2010 , 7:04pm by PiccoloChellie

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Adevag Posted 15 Jun 2010 , 4:26pm
post #31 of 52
Quote:
Originally Posted by PiccoloChellie



If one feels "guilty" about taking money or, even worse, is too timid/shy/etc to DEMAND money for their product... you ain't got a business; you have a charity where you get taken advantage of.
General "you," not specific "you," BTW.




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True, but you are funny!

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sillyoldpoohbear Posted 15 Jun 2010 , 4:34pm
post #32 of 52
Quote:
Originally Posted by Caths_Cakes

Believe me, i started out the cruddy way, Charging way less than i should have, And i learned the hard way!
i would love to be be able to say im making a mint and getting rich of making 3 cakes a month *snorts* as before, 90% of the population in my area will just not pay above the price for cake, they know they can go to asda and get a cake for less than £10 and there's no way in the world i can compete with that if i want to not live in a tent in a field some where lol! I'm just saying, Alot of it does depend on the area,and taking that into account is important.




As a fellow Brit I know exactly where you're coming from on the Asda thing. I get the one's "Can I have a Ben 10 cake for little Tommy" & when you tell them the price you can hear it in their voices that they expected it to be the same price as Asda. Well I'm sorry I make real cakes & they cost. If you want a cake that tastes like cardboard, has 2" of sugarpaste & is full of additives & preservatives then you take your £10 to Asda. Sorry to rant but supermarket cakes really bug me & so do the people who expect mine to be the same.

As for the unexperienced naive beginner that some of you mention I've also been there. I asked round friends what prices they were charging & charged the same, thinking that that was the going rate (£15 for a 10") It wasn't untilI went to college & realised how much I was underselling myself. My dh still thinks I do now but when you've got 2 cake shops in the area plus Asda lol you've got to find a balance somewhere to get the customers.

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kimbordeaux Posted 15 Jun 2010 , 4:43pm
post #33 of 52

My state does not allow home bakeries, no at home food prep for profit. I can't even have a separate building on my property that is used to make cakes unless it has its own water and septic and then building still has to has to pass DHEC (my state's Dept of Health and Enviromental Control) regulations. It has to meet the same standards as restuarants have to meet. I've started out in my home until found out all this. Now, I'm having to rent/lease another building in town, and also spend money getting it up to DHEC standards, so that I can advertise and get biz going to make money successfully. It would be nice to just be able to make them out of my home, less stress.

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auntginn Posted 15 Jun 2010 , 5:02pm
post #34 of 52

I am also in one of those states that does not allow home businesses and more recently you cannot even rent from another kitchen in order to insure your business.

10 yrs ago lifes challenges forced me to make some changes in my profession. So I revamped myself, seeing the need for decorating classes in my community. I developed my own teaching style because I didn't like Wilton's. I included a class on business practices which really all I did was teach "Pricing" the only hand out material was a worksheet which the students used and the class went thru and listed all the items.

Everyone was surprised at how much it really cost to make a cake from home even if you used box cake mixes on sale.

I now have a "commercial bakery" because I only start up my ovens when I have an order. I still teach though. In my little community I am the highest priced baker, BUT no one else does what I do in all the city, maybe in all the state and I'd like to say in all the world. rofl.

My orders and customers reflect that... By the way I am busy every weekend. Have not had down time except for those days I choose to take a breather.

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cakegroove Posted 15 Jun 2010 , 5:02pm
post #35 of 52

Sometimes the cart DOES come before the horse. In my case this is true. My sister in law received a gift certificate at Christmas to take a Wilton class in December and I tagged along because I have a crafty brain and like to fiddle with this sort of thing. I found myself really enjoying what I was doing, took ALL of those Wilton classes, bought hundreds of dollars worth of supplies. Now taking advanced classes at a local bakery. I started posting pictures of my Wilton class cakes on my FB page and started getting requests for cakes. I loved what I was doing so I said sure. I have said sure all the way through almost September already. Got myself insured and am doing cakes from my home (we are allowed where I live). Bought all the Sharon Zambito videos and am learning as I go the proper way to do things. Bought the Cake Boss software. I am mentally thriving off this new part of my life. I am attempting to fill in the gaps of the business know-how while I am happily taking & filling orders for business. I recently attended a business seminar and have been looking into what it takes to become licensed. I absolutely love what I am doing and would love for this to be my career one day.

I guess my humble point is please do not lump all the newbie/at home/inquisitive/cakeballs-lacking individuals under one umbrella. Everybody has to start off somewhere.

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artscallion Posted 15 Jun 2010 , 5:11pm
post #36 of 52

If I wanted to be a Banker but was told $5 an hour is all we're willing to pay Bankers in this part of town, and it cost me more than that just to cover my suits, ties and bus fare, I'd do one of two things:
1) I'd switch professions.
2) I'd move.

One thing I would not do is:
1) be a banker in a town that only paid bankers $5 an hour.


Because...the only reason people won't pay more than $25 for a cake in your town is because there are people willing to sell them a $25 cake in your town. Don't be one of them and perpetuate the problem!

If your town is small enough, form a cakers' union amongst the bakers. Agree to some base industry minimums that you'll all accept. They'll be able to make a living wage instead of working for twenty cents an hour, feeling like they have to underprice just to stay in the game. And you'll even the playing field.

If your town is too big to form such an agreement, then your town is too big to really have this problem and will support reasonable pricing. You just need to start charging what you should be charging.

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kimbordeaux Posted 15 Jun 2010 , 5:12pm
post #37 of 52
Quote:
Originally Posted by sillyoldpoohbear


As a fellow Brit I know exactly where you're coming from on the Asda thing. I get the one's "Can I have a Ben 10 cake for little Tommy" & when you tell them the price you can hear it in their voices that they expected it to be the same price as Asda. Well I'm sorry I make real cakes & they cost. If you want a cake that tastes like cardboard, has 2" of sugarpaste & is full of additives & preservatives then you take your £10 to Asda. Sorry to rant but supermarket cakes really bug me & so do the people who expect mine to be the same.




SillyOldPoohBear,
I know exactly what you mean. I had a call last Tuesday from a woman who wanted a cake that Friday. First I try to make customers give me 2 weeks on specialty cakes because there may be supplies I need to order plus customers dont seem to understand it takes more than a day to create a huge (2ft long) monster truck. She wanted a monster truck by that Friday. I tried talking her out of it but she wouldnt budge because it was little Cody's bday. I gave in. When I told her the price she literally made spitting sounds and told me she was thinking of it only costing $30. I told her it was not an easy task to create a standing monster truck. I would have to build a frame, cook, carve, cover, and decorate all by Friday. Then she told me that she had a friend who could make it for her for that price. My response was, "Well, I guess you need to get your friend to make the cake then". Then she hung up. Oh, and I told her I was getting a wisdom tooth pulled that Thursday before she heard price and she still wanted by Friday.

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PiccoloChellie Posted 15 Jun 2010 , 5:21pm
post #38 of 52
Quote:
Originally Posted by cakegroove

I guess my humble point is please do not lump all the newbie/at home/inquisitive/cakeballs-lacking individuals under one umbrella. Everybody has to start off somewhere.




I'm not speaking of newbies, homebakers, inquisitive folks, and so on and I think I can say that the other posters here aren't either.

The cakers I'm speaking of are those who are charging $.75 per serving when all the other cake shops in the area are priced at $3 per serving.
Even with a cake mix on sale and a bucket of icing from Sam's Club, no one can make a true profit charging $.75 per serving. They might sell the cake for $25 and spend $20 on mix, icing, eggs, oil, a board, paste color, and a bakery box and figure that means they made five bucks. They're not counting the cost of turning on the oven, of the gas used to drive to 2 or 3 stores to get the supplies along with wear & tear. They're not counting wages/labor for getting the supplies, baking the cake, leveling & torting, decorating, packaging, and delivering the cake. They're not accounting for income tax that needs to be paid on that $25.

They spent $20 to buy the hardware and someone gave them $25 so they're $5 ahead - that's the mindset I'm speaking of.

If your cakes are being sold (legally) at enough markup to account for all the above and any other incidentals while being in line with other area cake shops, there isn't an issue in the world if you're a new decorator baking from home. That's fantastic, actually! But there's a big difference between the two. icon_smile.gif

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LoveMeSomeCake615 Posted 15 Jun 2010 , 5:38pm
post #39 of 52
Quote:
Quote:

I guess my humble point is please do not lump all the newbie/at home/inquisitive/cakeballs-lacking individuals under one umbrella. Everybody has to start off somewhere.




Exactly what I was thinking. I agree with what everyone is saying about never undercutting or cheating yourself and other local businesses, but please allow for those of us who, like myself, kind of stumbled into a love of and talent for cake decorating. My experience is very similar to the PP above. I have never sought to be "The Cheap Cake Lady", but it's taking some trial and error to get where I need to be.

To me it's still mind-boggling that anyone is willing to pay over $100 for something I made! icon_eek.gif

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indydebi Posted 15 Jun 2010 , 7:44pm
post #40 of 52
Quote:
Originally Posted by artscallion

If I wanted to be a Banker but was told $5 an hour is all we're willing to pay Bankers in this part of town, and it cost me more than that just to cover my suits, ties and bus fare, I'd do one of two things:
1) I'd switch professions.
2) I'd move.

One thing I would not do is:
1) be a banker in a town that only paid bankers $5 an hour.



Beautiful!!!!!! thumbs_up.gif

Caution on the "cake union" .... actions like this can be construed as price fixing, which is *SO* totally frowned upon by the govt!

There is a reason you don't find a Macy's or a Nordstrom's in every little po-dunk town in the country. Because the market won't support these stores in certain areas. And sorry to say, if it costs you $50 to make a cake and your market area won't support pricing a cake out at $250 to cover ALL of your expenses (not just ingredients, but ALL expenses), then openign a custom desing cake shop in that area just isn't going to fly. Get a new idea .... or move to an area that WILL support those prices.

The "excuse" of no one will pay that price here just makes my a$$ tired. When I came on to CC, I'd been making/pricing cakes for 25 years and thought I was pretty good at it. When I saw what people were getting for cakes, I didn't step back, wring my little hands, wrinkle up my face and whine about "people will NEVER pay that for a cake HERE!" What I did was step UP, form my fightin' fist, set a DETERMINED look on my face and proudly proclaimed, "If these people can do it, then so can I!" and my prices basically DOUBLED in a few months. With *NO* adverse affects, might I add! thumbs_up.gif

If "they won't pay that price here", then stop pretending to be a business and move on to something else. I will never NEVER understand the logic of going broke in your own so-called business just so you won't make the general public "mad" about having to pay the right price for something.

I won't pay $70,000 for a car but that doesnt' stop Cadillace from selling Escalades at that price! It also doesnt' cause them to lower their price. They pretty much look at me, wave me away as they say (in their W.C. Fields voice), "Get away from me kid, ya bother me!"

If they WILL pay those prices in your area, then get in the ballgame and start thinking like a business (wo)man. "Guilt" about being paid a fair wage for the work and the art you create is NOT part of business thinking.

Yeah, I got my mom-finger going on this one, but I also just got back from vacation, and I'm tired and cranky! dunce.gificon_wink.gif

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auntginn Posted 15 Jun 2010 , 8:05pm
post #41 of 52

Touche!! Well put.

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_christina_ Posted 15 Jun 2010 , 9:03pm
post #42 of 52

This is a great topic! Seriously!!

I am new to pricing for myself but worked in a few bakeries where I was shocked at the prices they charged. And they came up with prices just cause, not even really based on time, ingredients, etc. Just pulled a number.

We were profiled on Platinum Weddings and they said the bride paid $5000 for the two cakes...she didn't but it was a couple thousand. Anyway, I would have never paid that. I can't believe people do but I am happy they do.

It can be hard to do proper pricing because, well, sometimes you don't know but I think this topic certainly opens eyes to see what you need to now!

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sillyoldpoohbear Posted 16 Jun 2010 , 7:27pm
post #43 of 52
Quote:
Originally Posted by kimbordeaux


SillyOldPoohBear,
I know exactly what you mean. I had a call last Tuesday from a woman who wanted a cake that Friday. First I try to make customers give me 2 weeks on specialty cakes because there may be supplies I need to order plus customers dont seem to understand it takes more than a day to create a huge (2ft long) monster truck. She wanted a monster truck by that Friday. I tried talking her out of it but she wouldnt budge because it was little Cody's bday. I gave in. When I told her the price she literally made spitting sounds and told me she was thinking of it only costing $30. I told her it was not an easy task to create a standing monster truck. I would have to build a frame, cook, carve, cover, and decorate all by Friday. Then she told me that she had a friend who could make it for her for that price. My response was, "Well, I guess you need to get your friend to make the cake then". Then she hung up. Oh, and I told her I was getting a wisdom tooth pulled that Thursday before she heard price and she still wanted by Friday.




OMG Kim I thought I got some bad ones. I'd have defo told her to go give her friend $30 & see how far she gets. I know exactly where your coming from on that one. Regular cakes are bad enough, with some people, but with sculpted novelty cakes they just don't have a clue. Ever get the "If I have a smaller one will it cost less?" It doesn't matter if it's 6 inches or 6 foot there is still the same amount of work. Ok there's a lot more cost involved as far as ingredients are concerned but it's still the same amount of work!!!!

As for short notice don't start me on that one, that's a whole other discussion lol. I had one last week, who's a regular BTW. She orders a cake weeks ago for her daughters boyfs 18th & told me she wanted it on Friday. She then phoned me Wednesday afternoon & said she wanted her cake on Thursday! What gets me is that people just don't get that creating a cake takes time & effort, it's not a 10 minute job (how I wish it was then I really would be raking it in icon_lol.gif ) It wouldn't normally be a problem but I'd had 2 days out because my dh had suprised me for our anniversary & then I had a hospital appointment on the Wednesday, all of which she knew because she works wth him. Anyway long story short I was still baking at 10.30pm on Wednesday just because she decided to change her mind at the last minute.

Makes you wonder why you do it sometimes but then you remember the good customers, who appreciate your work & the price it costs icon_smile.gif

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tat80 Posted 16 Jun 2010 , 8:21pm
post #44 of 52

ok- I am new here so please go easy on me! What I have read from most of you is what I am concerned about the most. I am what you might consider a "wanna-be". I have been making and decorating cakes for friends and family for a few years and have recently decided that I want to mak this hobby into a work-from-home business. (Then I will at least have a job I enjoy!)

My problem is that I am 100% self-taught. I want to make sure to do this the right way, not undercut anyone and be legal and all that stuff, but I am not exactly sure where to start. I have been pressured by family and friends to make business cards and get them out soon.

Looking at some of your cake designs I am not sure I am good enough to price competitively with you all beccause my cakes might not look as perfect as yours all do. However I do not want to work for free. My goal is to be able to quit my part-time job and still have enough income to pay the bills. Does anyone have any advice for me?

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GeminiCake Posted 16 Jun 2010 , 8:36pm
post #45 of 52

I battle myself with this. Is it OK to still charge what our competitors charge, if we are newbies, and they have been around longer?

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mhuerta Posted 16 Jun 2010 , 8:39pm
post #46 of 52

so i myself have just recently started baking and decorating cakes aobut 7 months ago and i knw trying to figure out pricing in the beginning is tough i didnt want to undercharge because its hard work but i didnt want to over charge because i was new to the profession although i have done some really beautiful cakes i still have alot to learn so then my cousin wanted a HUGE cake for her daughters 1st bday i was estimating the cost for around 150 servings so i fairly charge 1.25/serving but since she was family i would discount that all changed when she asked for 350 serving omg!!!! so everyone knows that alot of work bc i was planning to make 6 cakes of a specific character so i thought id ask for 1.00/slice and i told her actually 325 for everything and she said NO that was too much then i told her well you can pay half that and have a crappy cake then bc thats what im charging i mean what do you expect for that many servings 50 dllrs idts ugh

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artscallion Posted 16 Jun 2010 , 9:26pm
post #47 of 52
Quote:
Originally Posted by tat80

ok- I am new here so please go easy on me! What I have read from most of you is what I am concerned about the most. I am what you might consider a "wanna-be". I have been making and decorating cakes for friends and family for a few years and have recently decided that I want to mak this hobby into a work-from-home business. (Then I will at least have a job I enjoy!)

My problem is that I am 100% self-taught. I want to make sure to do this the right way, not undercut anyone and be legal and all that stuff, but I am not exactly sure where to start. I have been pressured by family and friends to make business cards and get them out soon.

Looking at some of your cake designs I am not sure I am good enough to price competitively with you all beccause my cakes might not look as perfect as yours all do. However I do not want to work for free. My goal is to be able to quit my part-time job and still have enough income to pay the bills. Does anyone have any advice for me?




Please don't take this the wrong way. And I haven't even looked at your cakes, so don't take this as an opinion of your skills. It's meant as a general opinion on the topic... But I would say that if your cakes are not yet good enough for you to be charging what a professional cake goes for, then you are not ready to be selling cakes professionally.

Plumbers don't start fixing peoples pipes for real cheap because they're not up to snuff with their plumbing skills yet. They apprentice or train until they are at a professional level where they can compete in the market, both price and quality-wise.

So if you charge $25 for a cake because it's not up to the professional standards of the cakes you admire here, keep practicing/go to school/work in a bakery until your skills are at a professional level. just because you have discovered you have a talent for something and like doing it, doesn't mean you should jump into business before you are ready, despite the pressure of family and friends.

This is for your benefit as well as the bakers that are undercut. I mean it cost about as much to make a bad cake as it does a good one. And you shouldn't have to work for nearly free just because you're not ready to be professional yet. So wait until you're ready and can work for a decent fee. (again, not calling your cakes "bad" as I haven't looked at anyone's in this thread's cakes)

Of course, I'm not the cake police, and anyone can do whatever they want, as long as it's legal. But that's the way I see it.

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mariemakescakes Posted 16 Jun 2010 , 11:21pm
post #48 of 52

I saw this on craigslist awhile back and your post reminded me of it.

http://dallas.craigslist.org/mdf/crs/1713596522.html

Edited for an update...I was interested to see if they were still in business/advertising on craigslist and found another of this person's ad

http://dallas.craigslist.org/dal/art/1749478142.html

Makes me want to e-mail them and ask them if they know what they are doing to bakeries

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artscallion Posted 16 Jun 2010 , 11:52pm
post #49 of 52
Quote:
Originally Posted by mariemakescakes

I saw this on craigslist awhile back and your post reminded me of it.

http://dallas.craigslist.org/mdf/crs/1713596522.html

Edited for an update...I was interested to see if they were still in business/advertising on craigslist and found another of this person's ad

http://dallas.craigslist.org/dal/art/1749478142.html

Makes me want to e-mail them and ask them if they know what they are doing to bakeries




Coincidentally, the baker in that ad is the OP in this heated thread...

http://cakecentral.com/cake-decorating-ftopicp-6849738-.html#6849738

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mim1106 Posted 17 Jun 2010 , 12:03am
post #50 of 52
Quote:
Originally Posted by artscallion

Quote:
Originally Posted by mariemakescakes

I saw this on craigslist awhile back and your post reminded me of it.

http://dallas.craigslist.org/mdf/crs/1713596522.html

Edited for an update...I was interested to see if they were still in business/advertising on craigslist and found another of this person's ad

http://dallas.craigslist.org/dal/art/1749478142.html

Makes me want to e-mail them and ask them if they know what they are doing to bakeries



Coincidentally, the baker in that ad is the OP in this heated thread...

http://cakecentral.com/cake-decorating-ftopicp-6849738-.html#6849738




DOH!

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mariemakescakes Posted 17 Jun 2010 , 12:29am
post #51 of 52
Quote:
Originally Posted by artscallion

Quote:
Originally Posted by mariemakescakes

I saw this on craigslist awhile back and your post reminded me of it.

http://dallas.craigslist.org/mdf/crs/1713596522.html

Edited for an update...I was interested to see if they were still in business/advertising on craigslist and found another of this person's ad

http://dallas.craigslist.org/dal/art/1749478142.html

Makes me want to e-mail them and ask them if they know what they are doing to bakeries



Coincidentally, the baker in that ad is the OP in this heated thread...

http://cakecentral.com/cake-decorating-ftopicp-6849738-.html#6849738




oops...sorry about that

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PiccoloChellie Posted 17 Jun 2010 , 7:04pm
post #52 of 52
Quote:
Originally Posted by GeminiCake

I battle myself with this. Is it OK to still charge what our competitors charge, if we are newbies, and they have been around longer?




As long as your quality of work is comparable, of course it is. I've seen some decorators who crank out masterpieces for their 3rd cake, and I've seen decorators who've been around for 20 years who ..... can't crank out a masterpiece, to put it nicely.
Pay yourself what you're worth!! icon_smile.gif

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