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How to price a cake

post #1 of 9
Thread Starter 
I'm new to this site and like a lot of you newbies I ask the same question. How do I price a cake? I found some apps in the App Store. Search for Calculated Cakes love these apps and have helped me a lot hope it helps some of y'all like it helped me.
post #2 of 9

I attended a pricing session at IBIE earlier this month. I had someone ask me about a cake today and I used this new (to me) price model: ingredients, labor, overhead, profit. The numbers I got out scare me to pieces.

 

For a half-sheet cake (serving 50) I come up with a price of $157.75 with delivery. I'm sorry but I can't see anyone here paying that kind of money for a cake. I've already had some unpleasant remarks when I increased my cupcake prices to $2 each.

 

:ouch::(

post #3 of 9
In a large metro area there should be more than enough of a customer base willing to pay premium prices ($3-7+/serving). Part of your business plan should involve market research to determine who these people are and an advertising strategy to figure out how to reach them.

If you are selling cheap cake to cheap customers, you will probably have to start from scratch with an entirely new customer base once you set appropriate prices.

Check out the links in my signature below for more info, including Pricing Formula and Pricing, Market Value, & Economic Damage.
post #4 of 9
Quote:
Originally Posted by rwarren View Post
 

I attended a pricing session at IBIE earlier this month. I had someone ask me about a cake today and I used this new (to me) price model: ingredients, labor, overhead, profit. The numbers I got out scare me to pieces.

 

For a half-sheet cake (serving 50) I come up with a price of $157.75 with delivery. I'm sorry but I can't see anyone here paying that kind of money for a cake. I've already had some unpleasant remarks when I increased my cupcake prices to $2 each.

 

:ouch::(

So you were given advice by professionals and you think they don't know what they were talking about?

 I'm a professional and I can tell you it gets rather frustrating when I explain something to a non professional and have them say, I'm sorry but since I can't wrap my brain around that, you must be wrong.

 

Then someone posts a completely wrong answer and gets thanked.

 

Anyway, the last sheet cake I made was 11x15,  $175 plus $45 delivery. 

post #5 of 9
Quote:
Originally Posted by jason_kraft View Post
If you are selling cheap cake to cheap customers, you will probably have to start from scratch with an entirely new customer base once you set appropriate prices.

 

Nice pun :)  Actually I do bake from scratch. 

 

The pricing formula in your blog was similar to the one described in the seminar, with much more detail particularly in the labor section. 

 

Quote:
Originally Posted by howsweet View Post
 

 I'm a professional and I can tell you it gets rather frustrating when I explain something to a non professional and have them say, I'm sorry but since I can't wrap my brain around that, you must be wrong.

 

No I didn't say the presenter was "wrong".  It was informative and eye-opening.  I'm saying that I get so few orders as it is, if I increase my prices to this level, I can expect no orders at all. 

 

Most of my sales currently are at craft/art shows and church sales.  It is very discouraging to make nice things, bring them somewhere, listen to the comments (oh so pretty, but....), see the goodies sit there unsold and lug them home again.  Unlike the jewellers, painters, other arts & crafts people, I can't keep cake from one month/year to the next. 

post #6 of 9
Quote:
Originally Posted by rwarren View Post

I'm saying that I get so few orders as it is, if I increase my prices to this level, I can expect no orders at all.

Most of my sales currently are at craft/art shows and church sales.

That's true if and only if you don't change your target market. People who shop at craft shows and church sales tend to appreciate lower prices more than quality-based advantages (especially when talking about food products) and that's exactly who you don't want to target, unless you are planning on going head-to-head with Walmart and your local grocery store.
post #7 of 9
Quote:
Originally Posted by howsweet View Post
 

So you were given advice by professionals and you think they don't know what they were talking about? I'm a professional and I can tell you it gets rather frustrating when I explain something to a non professional and have them say, I'm sorry but since I can't wrap my brain around that, you must be wrong.

 

Then someone posts a completely wrong answer and gets thanked.

 

Not directed at the OP. This just happens to be a regular occurrence here.

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post #8 of 9

Very common occurrence!

Quote:

Originally Posted by rwarren View Post
 

No I didn't say the presenter was "wrong".  It was informative and eye-opening.  I'm saying that I get so few orders as it is, if I increase my prices to this level, I can expect no orders at all. 

 

Most of my sales currently are at craft/art shows and church sales.  It is very discouraging to make nice things, bring them somewhere, listen to the comments (oh so pretty, but....), see the goodies sit there unsold and lug them home again.  Unlike the jewellers, painters, other arts & crafts people, I can't keep cake from one month/year to the next. 

I guess I kind of jumped on you, sorry about that. It's a sensitive subject.  I was talking more about custom cakes. If I were selling at those places think I'd be making stuff like loaf breads (banana, pumpkin, etc) and carrot cakes, basically undecorated.

post #9 of 9

Bottom line is, you can either create cakes because its a side hobby which you have determined puts a little extra in your pocket, in which case you can charge minimally just to cover costs, you have all the time in the world, you stand there, shrugging in the kitchen, etc, or... You're the mad scientist with secret recipes and a slab of fondant in your hand determined to make the most beautiful presentation possible, in which case, one can assume, you would value your work and charge appropriately, because, you know, you're not handing your customer a buttercream covered walmart pancake, you're handing them a centerpiece to their celebration, and that's priceless. We've had customers who have frowned at $50 prices, and others who have left significant tips in addition to what their cakes cost. There can be no argument as to what is a correct cost. Opinions are subjective. The most important part of pricing is inquiring about the client's budget and expectations ahead of time and working within the parameters set, because, again, you are crafting & creating for them.  Happy Caking :)

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