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Having trouble getting orders

Poll Results: What do you charge for a PLAIN white 8" two layer cake (vanilla and buttercream with fondant)

Poll expired: Jul 31, 2013  
  • 3% (2)
    $0-$19
  • 3% (2)
    $20-$24
  • 16% (9)
    $25-$35
  • 75% (40)
    Over $35
53 Total Votes  
post #1 of 83
Thread Starter 

A lot of people who are inquiring about buying a cake or cupcakes from me (London Ontario) gawk at my prices. To me, they're fair - I think ..... Are my prices unreasonable? Or are my prices inflated? I can't figure out how to tell. I'm a baker just starting out and I'm trying to put together some extra money to have on hand when I open my little bakery - but I don't have orders.

 

If I cant make money now, how is my bakery supposed to run smoothly?

 

Recently I called all the local home-bakers and bakeries in my area and asked a simple question. What they would charge a large 12", 9", 6" tiered cake, with fondant, and a teddy bear cake topper. I got prices anywhere from $60 (what are they making the cake out of? dirt?) to $230. I currently charge $140 for the cake described.

 

I'm unsure if I should change my prices, or keep them as they are and wait for some customers who are used to purchasing specialty cakes which are of a hefty price tag.

 

I mean I feel like telling some people, if you want a $20 cake, go to Costco or Metro.

 

*Mod deleted per member request

post #2 of 83
Your prices are most likely way too low. At your current price, how much of an hourly wage are you paying yourself and what is your profit margin (after taking into account ingredients and allocated overhead)?

What are your competitive advantages? Who is your target market? What is your current marketing strategy?
post #3 of 83
Thread Starter 

I honestly don't give myself an hourly wage just yet. All I do is calculate my costs, and multiply by two. I figured that a 50% profit would suffice.

 

My dream target market is brides. I'd love to craft beautiful wedding cakes - but the only orders I've gotten are for birthdays and showers, etc.

 

As for marketing, I've just been utilizing Kijiji and facebook, plus my website and word of mouth advertising. I've gotten in touch with a local wedding planner in hopes that she could introduce my business to some of the brides that she works with.

 

I really would like my business to succeed, and I need more practice with my cakes, I've been practicing making cakes and donating them so that I can have extra photos of my work, but I can only do so many free cakes ..........

post #4 of 83
Quote:
Originally Posted by NSuojhayer View Post

I honestly don't give myself an hourly wage just yet. All I do is calculate my costs, and multiply by two. I figured that a 50% profit would suffice.

Setting appropriate prices is the first step, before you do anything else. In fact I would recommend not accepting any new orders (and taking down your existing pricing page) until you have reworked your cost structure, since every order you take at your current pricing level is leading you further away from where you want to be.

When you are pricing cakes, the labor involved is a critical component. If you are not as efficient as you would like to be that's fine, but you need to pay yourself something...doubling your costs only gets you 50% profit if your time is worthless and you have zero overhead.

Read the Pricing Formula link in my signature below for more details.
post #5 of 83
Okay, in your poll I chose 25-35, but I would like to point out that a plain, 2 layer cake would never happen with me. I always do three layers and there is always some decoration, so although I voted 25-35 in your poll, I would never actually sell a cake for less than $35.
post #6 of 83
Quote:
Originally Posted by jason_kraft View Post

Setting appropriate prices is the first step, before you do anything else. In fact I would recommend not accepting any new orders (and taking down your existing pricing page) until you have reworked your cost structure, since every order you take at your current pricing level is leading you further away from where you want to be.

When you are pricing cakes, the labor involved is a critical component. If you are not as efficient as you would like to be that's fine, but you need to pay yourself something...doubling your costs only gets you 50% profit if your time is worthless and you have zero overhead.

Read the Pricing Formula link in my signature below for more details.
This is very good advice. Please heed it, you will not regret it. icon_smile.gif
post #7 of 83
Thread Starter 

I just feel that if I actually price my cakes "properly" that they will be so expensive that nobody will want to order any cakes from me! I just want to make nice cakes and make people happy. I could be really good if people gave me the chance.

 

Thank you Jason, for that advice. I will certainly utilize your pricing formula - however if my competition has such low prices, I fear that I will never get any business.

 

Although to some degree I believe that when people see a big price tag they immediately associate it with quality, I want to attract customers.

 

Oh goodness I should stop rambling. Getting in over my head again.

post #8 of 83

It's probably useless to call most home bakers to see what they charge as odds are they are undercharging and not business experts. Someone who makes his/her living in the cake business is more likely to know what fair prices are for cakes. You should have better luck comparing your prices to what bakeries charge. Jane Asher's prices are on her website. You don't even have to call her. From what I've seen, it's not that uncommon for UK bakers to list their prices.

post #9 of 83
I checked out your website, your cakes are nice. Before I start babbling I wanted to tell you that I practice on styrofoam cake dummy's all the time, if I want to practice a new technique, pad my portfolio, etc. some I keep, some I tear the fondant off and practice something different (I can't remember which member it was but they suggested decorating one side, taking a picture, decorating the other side in a different design, take a picture, tear it off and repeat) so that should help you gain experience without giving cakes away every time you want to practice.

I think having your prices on your website will save you time, and help 'weed out' customers you don't want-like the woman who wants a 5tiered cake for $100. However, Jason's suggestion is right on (check out his website).
The first thing I did was check out the other decorators in my area, even Kroger, and found out their prices-just to get an idea of what other people were charging and make sure I wasn't undercutting anyone. But then I realized a lot of the decorators in my area specialize in sheet cakes or the old school fur-type piping (I have no clue what it's called) while I focus more on detailed cakes, fondant covered or buttercream, stacked or carved cakes.

Anyway, I looked at your pricing and for the 6/8" you charge $1.67 per serving and the 12" $1.07. Your example of the 6,9,&12" tiered cake covered in white fondant equals about $1.40 per serving (not taking the teddy bear) that's so inexpensive! I live in a small, rural community and I charge way more than that, for a bare bones cake. Especially, if your baking from scratch I just don't see how you will be able to make a profit that you won't end up resenting. Please don't think I'm being rude, I just think your cakes are worth more than that and you should too!

There are several ways to put yourself out there and advertise but having lower prices shouldn't be one of them. You can donate cakes to charity events, sign up for bridal shows, rent a booth at your local farmers market, take samples to other small/large businesses in your area and pass out cards...but I really think you should rethink your prices before you proceed
post #10 of 83
Remember that you are not your customer. Most of us can't afford our own cakes, but the sales guy at the Porsche dealer probably drives a Ford home too. Don't price at what you would pay, price at what your cake is worth.
elsewhere.
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elsewhere.
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post #11 of 83

Nope, you're not charging enough.  Don't be afraid to have the confidence to raise your price.  Think about the fact that people will pay twice what a diamond is worth just to say they got it from Tiffany.  (Blue Nile rocks my world, they totally undercut Tiffany!!!)  So if people will do that they will certainly pay for a cake.

As for weddings, all you need is just one bride and others will follow.  Tell everyone you make cakes. I won't ever do a wedding cake, but the painter who did an estimate at my house saw my chocolate clay flowers and asked me to bake his daughter's wedding cake.

I said no thanks....I just can't handle it.

post #12 of 83
Quote:
Originally Posted by NSuojhayer View Post

I just feel that if I actually price my cakes "properly" that they will be so expensive that nobody will want to order any cakes from me! I just want to make nice cakes and make people happy. I could be really good if people gave me the chance.

Thank you Jason, for that advice. I will certainly utilize your pricing formula - however if my competition has such low prices, I fear that I will never get any business.

Although to some degree I believe that when people see a big price tag they immediately associate it with quality, I want to attract customers.

Oh goodness I should stop rambling. Getting in over my head again.

I totally understand where your coming from, I had the same mindset when I started. It takes time to build a successful business, it sucks, but it's true. However, if you want to build a business that will last you have to charge appropriately otherwise you'll get burnt out quickly! If you value your work, eventually others will to!
post #13 of 83
Thread Starter 

Thank you everyone for the great advice. I think I'm going to seriously rethink my pricing, and my means of advertising. Balancing a cake business with university is no joke... I thought it would be so much easier! Not easy, just easier

post #14 of 83

I forgot to mention - your cakes are lovely.
 

post #15 of 83

Yes, your cakes are beautiful and I like  your website a lot.

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