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Oh no, I didn't...or...Was that outloud? Or...is there an unsend button somewhere? *sigh* - Page 4  

post #46 of 79
Quote:
Originally Posted by gatorcake View Post

The problem is the O.P. should have educated the client before-hand.  This is a common recommendation for how to compete against low-cost alternatives.  Given what is described here, the client did not have a sense of the quality provided by the O.P. and frankly the email does not provide much either resting the justification for prices on the fact that she is trying to make a living from her business.

This.
post #47 of 79
Quote:
Originally Posted by costumeczar View Post

That's not a business, that's a hobby. You could look at that as a business run at a loss as a tax deduction, too. I worked at a job once that was set up that way, it was pathetic.

I'm working on a blog post that explains how financially disadvantageous it is to run a hobby at a loss vs. running a business at a loss. The rules for taking deductions are much stricter for hobbies.

I have no problem with someone having their cake decorating subsidized by someone else (it doesn't matter who, I think just saying it's subsidized is enough). I don't even have a problem with this subsidized cake decorator launching a business, as long as they price based on market value and their cost structure without the subsidy. What I have a problem with is when the subsidy becomes a crutch and serves as a substitute for acquiring and exercising the basic business skills necessary to serve the public in a capitalist society.

If you don't want to learn the business side, that's fine too. Just keep cake decorating as a hobby and don't run a business, formally charge for your work, or advertise.
post #48 of 79

I like the black teeshirts at Macy's. But Target has black tee shirts that are half as expensive.  Are they as good of quality?  Most likely not.  But I need a black tee shirt to wear to this birthday party and I'd rather spend less on it. After all, they are both black tee shirts and no one is really going to know the difference, right? I can go tell Macy's this, but Macy's probably knows that Target also sells black tee shirts so what's the point?  I'd be really surprised and very turned off if Macy's felt the need to 'educate' me about their quality and that their vendors need to make a living.  Yes, I know that a Macy's tee shirt is great and I would probably buy one for a more special occasion. Heck, I'll probably buy a nice cocktail dress, shoes and a new red lipstick from Macy's for my next special occasion--but not if Macy's criticized my decision to buy a tee shirt at Target. But Macy's isn't going to do that. Maybe the little boutique out of Pretty Woman would poke jabs at my Target shirt, but i'm not their customer anyway.

 

my (round-about) point is: brand your business so that you aren't seen as competition with low-price bakers.  If you are primarily attracting price-shoppers but are loosing out on that business because your price is too high, then you need to attract shoppers who are looking for more than a great deal.  

post #49 of 79
THAT is the problem!! Most people recognize the difference between the quality of those 2 shirts. Sadly, most people don't know or understand the difference when it comes to cake.

I understand there are people who can't afford a custom cake. What bothers me is that people really do think cake decorators are just making a bundle. Sadly, there isn't much we can do to change it.

I wish there was a way to educate without seeming pretentious. I haven't yet found one. For now, I have to be grateful that my clients do recognize &/or value my cakes. I will forever battle the cost issue. Just lost one last night.

Really wish more shows would show the price. Love that "amazing cakes" on TlC does.

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It's never "just cake!"

 

You may get a cake for $way to little but you won't get this cake!

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www.VeryDeliciousDesserts.com

https://www.facebook.com/pages/Delicious-Desserts/207874222593145

 

It's never "just cake!"

 

You may get a cake for $way to little but you won't get this cake!

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post #50 of 79
Quote:
Originally Posted by lorieleann View Post

 

my (round-about) point is: brand your business so that you aren't seen as competition with low-price bakers.  If you are primarily attracting price-shoppers but are loosing out on that business because your price is too high, then you need to attract shoppers who are looking for more than a great deal.  

Exactly, and if someone is just looking for a great deal then let them go get it somewhere else because if the quality isn't as important to them as it is to you then you can't change that. If you have an opportunity to tell them why your cakes are better and worth your pricing then do it, but after the fact comes off as sour grapes.

 

Jason, I've been writing about cake business for years on my blog and I wrote a book about starting a home-based business and what goes into it in terms of the mistakes that people tend to make when going from a hobby to a business. Most people aren't considering the financial aspect of it when they decide to start selling cakes, they're thinking "oh boy, I can be my own boss, get out from behind a desk, and have fun!"  I had one woman write to me and thank me for the book, since she read it and decided that running a business wasn't for her. What my issue is with threads like this is that people seem to think that there's a magic way to make everyone charge what the average market price is, and you can't do that, other than with price-fixing, which is illegal.

 

 If someone wanted to run a business with the goal of making minimum wage or less, and they accomplish that, then they have a right to do that. I think it's stupid and not a great business plan, but if that's what they want to do then you can't stop them. Doing custom cakes as a business has a low bar to entry in an area where there are cottage food laws, so anyone who can get a cake pan can do it (I guess that's the bar to entry.) Of course the people who plan on earning a decent wage for themselves will be irritated by it when customers go somewhere cheaper, but it happens in every industry, and it will continue to happen. All you can do is plan a sales pitch that gives people reasons to consider why your product is worth paying more.

post #51 of 79
Quote:
Originally Posted by DeliciousDesserts View Post


I wish there was a way to educate without seeming pretentious. I haven't yet found one. For now, I have to be grateful that my clients do recognize &/or value my cakes. I will forever battle the cost issue. Just lost one last night.

Really wish more shows would show the price. Love that "amazing cakes" on TlC does.

I like that show because of that, too...I have people come in with pictures from wedding magazines with the prices ripped off, like I'll think that it's $2 a serving if it doesn't have it on the picture they give me. I've lost a few cakes recently to pricing, but that's been happening more since the cottage food law started here a couple of years ago. On the other hand, I just heard that one of the venues that I work with has started requiring a business license and inspection certificate from bakers because of the cottage food law and the disasters they've had to deal with as a result, hahaha!

 

the only way to show that you're better value is to have the reasons on your website and in your sales pitch when you're meeting with the clients. I always tell them that I bake from scratch, don't use anything artificial, don't freeze anything, do a limited number of cakes per week, I'm the only one who works on and delivers the cake, I'm licensed and inspected, etc etc etc. The people who appreciate good quality food will respond to that, and the people who are just looking for the cheapest price won't, but they wouldn't have hired me anyway.

post #52 of 79

Oy...I got off this thread and went to check my email, and there was a response from someone who had asked about a 3-D sports car cake. I had asked her what her budget was, and she wrote back with a very nice email about why she wanted to get this for her husband, blah blah, nice story. Then she said something like she didn't want to insult me and she didn't know how much those cakes cost, but she's on a tight budget and was looking for something  for 10 people for $40.

 

Then she added something along the lines of "please don't make fun of me or scoff at my budget if I'm wrong about that price, I don't know how much they cost but I want to get him something nice." So I wrote her back and told her that I couldn't help her because those cakes take a long time to make and they start at $250, but that if her budget changes to let me know. I'm really, really hoping that she made a mistake and meant to type $400, not $40, but it makes me wonder if she's been laughed at before, which would be totally unnecessary. People really have NO IDEA, and they're flying blind with the $18 sheet cake from Costco for 30 people as the benchmark price in their minds.

post #53 of 79

But it's great that she admitted her ignorance about the cake costs. A perfect chance to educate a (future) client about why custom cakes are costly.

post #54 of 79
Quote:
Originally Posted by Godot View Post

But it's great that she admitted her ignorance about the cake costs. A perfect chance to educate a (future) client about why custom cakes are costly.

True...Now she knows that they take up to ten hours to do a detailed 3-d cake like that, but that's all I said.

post #55 of 79
Quote:
Originally Posted by Lili5768 View Post

She had some nerve to tell you she found someone else to do it cheaper!

In this case your response was justified and appropriate.

My motto is rise above it and always keep the door open icon_wink.gif  Because if the other cake is a disappointment she will return to you and pay whatever you ask!  and you never know.

So I would have written her this:

I'm very sorry that I could not be of help to you at this time. I loved the design and was looking forward to making it. But I'm happy you have found someone that can.

I do feel though that my price was based on the quality of the work that I do, quality ingredients, and the time and work involved in executing the design.

I wish you a joyous occasion and I remain at your service for any future celebration.

Thank you and have a blessed day.



A saving grace!! Very nicely put!
post #56 of 79
Quote:
Originally Posted by costumeczar View Post

What my issue is with threads like this is that people seem to think that there's a magic way to make everyone charge what the average market price is, and you can't do that, other than with price-fixing, which is illegal.

Price fixing is when you meet directly with your competitors and all agree to charge the same fixed price. That's very different from attempting to educate competitors on how to price in the first place (which is of course not guaranteed or even easy).
Quote:
If someone wanted to run a business with the goal of making minimum wage or less, and they accomplish that, then they have a right to do that. I think it's stupid and not a great business plan, but if that's what they want to do then you can't stop them.

Agreed, the hope is they are undercharging and undercutting. The most damaging situation is someone with a high level of baking and decorating skills and a lack of business skill combined with a subsidy that allows their cake charity to continue indefinitely.
post #57 of 79
Quote:
Originally Posted by jason_kraft View Post


Price fixing is when you meet directly with your competitors and all agree to charge the same fixed price. That's very different from attempting to educate competitors on how to price in the first place (which is of course not guaranteed or even easy).
 

I can't think of one example where trying to "educate" your competition about how to price things would be useful. Most of the comments on these types of threads are just saying things like "they're undercutting me and they need to charge more" which would mean that they need to charge what the person complaining is charging. But then if they did raise their prices so that everyone was in lockstep they'd have to learn to market themsleves appropriately, which is what they should just do in the first place. I have to go see World War Z now, so I can't keep beating this dead horse (unless it's a zombie). 

post #58 of 79
Quote:
Originally Posted by jason_kraft View Post


The most damaging situation is someone with a high level of baking and decorating skills and a lack of business skill combined with a subsidy that allows their cake charity to continue indefinitely.

Unfortunately, I know about a similar situation, but somewhat more damaging because the person understood business but had non-business motives. I did some consulting for a caker who'd been in business for a year. She was independently wealthy, an artist with incredible skills, and charged way under market expecting to build up her name recognition. She had more business than she could handle, hired two people to help with production, and operated at a loss. She was only interested in growing her (hobby) "business" for emotional reasons and did not care that the three established cakers in her community suffered from her presence. I addressed this issue but nothing that I said made any difference. She had only hired me to help write a business plan for her latest venture: a bakery cafe.

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post #59 of 79
Quote:
Originally Posted by costumeczar View Post

I can't think of one example where trying to "educate" your competition about how to price things would be useful.

I brought this up in my blog article on pricing and economic damage. IMO the best way to approach this is indirectly by working with a third party to engage the businesses serving your market with a free course (covering pricing and marketing in general) on how to make more money selling cakes.

Businesses do not have to price in lockstep, but they do need to price appropriately to their market (which includes earning a decent wage and margin), otherwise the long-term prospects of viable businesses serving said market are grim.
post #60 of 79

If I felt compelled to write anything to educate the customer I probably would have said something like:

 

"I fully understand your budget situation.  It is my hope that you get the cake you want at this much lower price.  However,  I worry that customers often think price is the only difference between cakes when there is so much more.   Since there is such a large disparity in our prices,  here are some points I do hope you consider for your peace of mind and confidence in your purchase. 

 

1.  I encourage you to research your baker thoroughly and that you feel confident in their skill level.  Make sure they have consistent  photos of their work and that they have produced cakes with similar quality of design.  So often I've seen instances where the reality did not meet the expectations of the cake purchaser.   No amount of money saved is worth the disappointment in getting a bad 'bargain'. 

 

2.  If you have not tasted the person's cake,  order some cupcakes in the flavor and icings that you are wanting and get a taste of their quality.  Often bargain bakers rely on cheap ingredients and shortcuts to lessen the cost of their product.  Doing this step will assure that you are getting the taste and quality you want for you and your guests.

 

3.  Make certain that there will be no 'hidden' costs that show up later...such as the cost of  fondant or gum paste applications, or a filling that was 'extra' or  the cost of internal structure (dowels, SPS system, etc.).  Make certain your quote is all-inclusive.

 

If you are satisfied with all the above, then congratulations on finding a true bargain!  The costs of quality ingredients, the overhead, and most importantly, the time spent producing a highly skilled design all play into pricing a quality cake.  Take advantage of it now because chances are, this baker will eventually have to raise their prices in order to maintain their business if they wish to keep operating with the same high standards. 

 

Best of luck in your purchase and know that if any of the above scenarios do not meet your requirements,  I will be happy to provide a quality product that meets and hopefully exceeds your expectations.

 

Thank  you for your consideration!"
 

If I am ever on life support, unplug me...

Then plug me back in.  See if that works!

If I am ever on life support, unplug me...

Then plug me back in.  See if that works!

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