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Undercutting- So frustrating. - Page 2

post #16 of 25

I don't do sketches either, ever, even after they book with me, unless it's something so generic and vague it makes no difference anyway. I'll write a description of the cake on the contrct but forget the sketching.

 

I have lots of undercutters around here, and one person who tries to block other people by getting into package deals with the venues around here, or discounts for certainvenues. It's aggravating...You might want to try to tell people that if someone offers them a lower price in writing for the same cake that they can bring that contract  to you so that you can see if you can match the price. I'm not saying to match the price, but if you get a few of those bringing you contracts from the same person you can see if there's a pattern of one person undercutting you and how much they're offering to take off. At least you'll know the specifics of what you're dealing with.

post #17 of 25
Thread Starter 
Quote:
Originally Posted by costumeczar View Post

I don't do sketches either, ever, even after they book with me, unless it's something so generic and vague it makes no difference anyway. I'll write a description of the cake on the contrct but forget the sketching.

 

I have lots of undercutters around here, and one person who tries to block other people by getting into package deals with the venues around here, or discounts for certainvenues. It's aggravating...You might want to try to tell people that if someone offers them a lower price in writing for the same cake that they can bring that contract  to you so that you can see if you can match the price. I'm not saying to match the price, but if you get a few of those bringing you contracts from the same person you can see if there's a pattern of one person undercutting you and how much they're offering to take off. At least you'll know the specifics of what you're dealing with.

Hmm, that's not a bad idea! Thanks! 

As far as not doing sketches period, I wouldn't mind adopting that policy. I hate doing sketches! icon_twisted.gif

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post #18 of 25
Quote:
Originally Posted by LoveMeSomeCake615 View Post

Hmm, that's not a bad idea! Thanks! 

As far as not doing sketches period, I wouldn't mind adopting that policy. I hate doing sketches! icon_twisted.gif

Yeah, it's too easy for people to trot them around town fishing for the cheapest quote.

post #19 of 25

I am a very small volume business, but I feel fortunate, there are very few cake shops in my area and the work they do isn't as creative as mine.  And they don't offer delivery.  Our prices are about equal for basic buttercream, but my custom prices are higher and people are okay with that.  I seem to be getting many word-of-mouth referrals.  Is there any way you can differentiate yourself from the under cutter by doing something unique they will not be able to duplicate?   If it's true they are undercharging, you may have little to worry about as they won't be able to sustain long-term growth.  Also, do you charge too much?  We live in a world of competition, so take a look at your pricing numbers.  

post #20 of 25
Thread Starter 
Quote:
Originally Posted by Norasmom View Post

Is there any way you can differentiate yourself from the under cutter by doing something unique they will not be able to duplicate?   If it's true they are undercharging, you may have little to worry about as they won't be able to sustain long-term growth.  Also, do you charge too much?  We live in a world of competition, so take a look at your pricing numbers.  

Well, not to sound conceited, but we do feel like we offer a higher quality product as far as our design work and execution. We do more gum paste work than they do (figures, flowers, etc.) though I would like to get into more of that. 

We most certainly do not charge too much, we are on the lower to middle end of the going rate for custom cakes and wedding cakes in our area. We actually really need to raise our prices. 

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post #21 of 25

It might work to raise your prices.  Sometimes people do believe "you get what you pay for..."  If your prices are already on the lower end and they are undercutting you, they won't survive.  Hope it all works out.  

post #22 of 25
Quote:
Originally Posted by Norasmom View Post

It might work to raise your prices.  Sometimes people do believe "you get what you pay for..."  

Agreed. If you are providing a higher quality product, your price should reflect that, and a higher price will help scare off "value" customers.
post #23 of 25

Raise your prices and you'll make more from the better quality clients you'll get and the cheap clients will continue going to the cheap baker. There is a segment of the market that pays what it costs for quality, no matter how much. Those people don't look for low prices as a sign of quality, they look for high prices.

elsewhere.
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elsewhere.
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post #24 of 25
Thread Starter 

Yeah, I know we need to. Just a scary thing to do! Our direct competitors in the area of the city we are in (not the same one I was talking about before who undercuts specific jobs) is a bakery that has been there for many years and is very well established. They are quite a bit cheaper than us, both in their storefront products and their custom cakes. Once again, their quality is not what ours is, but we have dealt with people being so used to their pricing that they balk at our prices. We do have customers that see the value and the difference in our work, but a lot who don't, or they do but it's not important enough to them to spend the extra money. So I guess what I am saying is that I'm afraid if we raise our prices, we'll price ourselves out of what our market will bear. 

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post #25 of 25

Then you could do it gradually and adjust as you find necessary. Maybe a slight increase in your most popular offering e.g. BC cakes or cupcakes, and see how customers respond. I know people often say here "raise your prices," what they don't add is: Be prepared for a mini-drought. There's a bit of a transition as the old grocery-store-pricing-seeking customers freak out or try to bully you down on your prices, your backbone gets stronger and "NO" becomes even more familiar as a response to folks wanting the moon for $0.25, and then more and more of those who stick around or show up end up being people who are willing to pay what your products are worth because they know they can't get that quality anywhere else.

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