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What should I charge for my home made cakes?

post #1 of 12
Thread Starter 

I am new to this site and I make cakes as a hobby.  I could use some help with pricing for my cakes please.  Thank you for your time and help.

 

Short story 

Can you look at my home made cakes and help me figure out what I should charge for my cakes because I am getting a lot of people asking to buy cakes from me and I'm selling my first cake in a few days. Everyone that asks me to make them a cake are told that 1. I'm not a pro, 2. you can show me a picture to give me an idea what you would like, and 3. It will not look exactly like the picture but be in similar design/style. Thank you all.

Link to my cakes 

http://s826.photobucket.com/user/ejhernandez381/library/My%20cakes 

Long story 

I bake cakes as a hobby and everyone loves my cakes. Every party I make a cake for I have at least 3 people asking me if I could make them one and how much I would charge. The problem is I don't know what to charge for my cakes. The local bakery charges $50 for a half sheet cake. I make sheet cakes and layered cakes and tiered cakes and all my cakes have home made butter cream frosting or home made butter cream mixed with cream cheese frosting. 

I am making a two tier cake with a double layered 12in bottom layer and a triple layer 10in top layer and so far the person is paying for the supplies needed to make the cake i.e. cake mix, eggs, powdered sugar etc... It is a baby shower cake and so far everything has come to around $35 to $40. It is a given that I will get that much because I had to get what I needed for the cake and it was easier for they buyer to have me get exactly what was needed instead of them guessing what I needed. 

My problem is on top of the cost for supplies they want to pay me for making the cake and I have no clue what to charge. I am not a pro and I do this as a hobby but as you know it takes a lot of time to make cakes. Everyone that asks me to make them a cake are told that 1. I'm not a pro, 2. you can show me a picture to give me an idea what you would like, and 3. It will not look exactly like the picture but similar. 

I hope you can give me your thoughts on what I should charge and thank you for your help.

post #2 of 12

Where do you live? If you are aloud to sell cakes in your area, you could get $1- $1.50 a serving for your cakes. But you can't just sell cakes out of you house in every state. you have to have a health department review or a liscence. It sounds like yore cake is 70 servings so you could $70- to $100 for it. 

post #3 of 12
A couple things first, you need to make sure it's legal to bake/sell from home in your area. Some states allow you to only sell at designated areas like Farmers Markets others won't allow direct sales (what you are talking about) unless you have a seperate kitchen with its own outside door & specific equipment (three compartment sink). Some states require all your items be labeled and what items you can sell from home (usually only 'low risk' items which includes cakes but some exclude fresh/frozen fruit, whipped topping, cream cheese, pies, etc.) some states have a cap on the income you are allowed per year.

You still need a food safety certificate, tax ID, insurance...so contact your local health department first and they'll give you a checklist and a packet of info. My state required me to have my floor plan setup a certain way and I had to build a seperate kitchen. Also, no pets and you cannot sell cakes with copyright characters. Yes, people do it but the company can fine you ridiculous amounts and this is something they are looking for more and more. Also, if your health department finds out you are selling without meeting the requirements they will shut you down.

Ok, you don't want to base your prices off grocery store cakes. OMG stated above that $1-1.50/slice there is no way you can make a profit with those prices. Not to mention 'undercutting' other bakers in your area is a big no, no. This only devalues your product and the industry in general-it's poor form. Baking from home makes your overhead lower then a storefront but most people don't realize that the things you mentioned above (ingredients, electricity, water, supplies-boards, cake tools, dowels, boxes, icing bags, even paper towels...) these need to be figured into your costs for each cake you sell. I realize you have committed to an order but I strongly recommend not taking anymore orders after this until you get your pricing structure in place (not to mention your state requirements).

When you say double & triple layer are you talking about extended tiers/double barrel? Industry standards are 1x2x4 (tall) some people charge differently for wedding cakes-they have party cakes split into larger size slices (all my cakes are priced per slice and based on the complexity of the design it's just easier for me, if they want larger slices they order a larger cake. That's also something you need to have figured out beforehand. I assume you are talking about a 10" cake with three layers of cake and a 12" with two that's about 98 servings (if my brain is working correctly).

No one can tell you how much you need to charge. We don't know how complex the design is, how long it's going to take you, how much your overhead is, what support system you are using and the price, or how much you value your time and what you expect to make hourly. <
All of these things need to be figured into each cake plus your costs from above (liscencing, insurance, business cards...). Plus the costs of your ingredients.

My base (starting) price is between $4-9 ($9 being my base price for carved cakes). Then additional costs are applied depending on the design. I have a minimum order requirement, most people do, I won't turn on my oven for a $50 cake-there's no profit.

This is the hardest thing for many new decorators, they think they are making a profit when they really aren't. The reason I suggested getting your pricing in order before taking on anymore cakes is because of this. Say you keep booking all these cakes, charging $2 or $3/slice. You get busy and build a customers base, then six months to a year later you realize you aren't making enough (working hours on a cake that takes you collectively 10+ hours and charging less then $100 because you can't imagine paying that much for a cake). You raise your prices to where they should be and you lose all those customers-you are right back where you started!

Believe me, my family & friends where the same way, loving my cakes until it came time for me to charge them (even with a discount). Keep those things in mind when pricing. Who wants to be the 'cheap' cake lady?!
post #4 of 12
Thread Starter 

Thank you all for the information.  You are right about two 12in cakes stacked on top of each other when I say a double layer and so on.  I'm not really looking into starting a business out of my home and mainly make cakes for family and friends.  Sometimes I just use the cake as my gift if it were a birthday party or what not.  The person that asked me to make the cake for the baby shower is a family friend and the cake is for her sister.  She insists that she pays me for making the cake.

 

I just wanted to get an idea for the very few cakes I may charge for.  I am very selective of who I make cakes for because like you said it does take a lot of time. For the baby shower cake what I thought was the price of what was needed and minimum wage in my are for the time it takes.  I am estimating that the cake would cost about $88 to $100.

 

Like you also said, its hard for me to imagine charging someone that much for a cake.  On the other hand I designed our wedding cake and had everything I needed to make it but my wife got me to have a bakery make it because we agreed it would be to much stress for me.  With delivery I was charged $400 for a double layered 3 tier cake sizes 14, 12, and 10 inches.

 

I know I will not be charging any time soon for another cake but I will look into everything you have said too.  Thank you again for the information.  I'll keep checking to see if anyone else posts some comments. 

post #5 of 12
Quote:

Originally Posted by CakesByEddie View Post

 

 

 

I just wanted to get an idea for the very few cakes I may charge for.

 

Sounds exactly like a business to me. 

"Life itself is the proper binge." - Julia Child
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"Life itself is the proper binge." - Julia Child
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post #6 of 12
Quote:
Originally Posted by SweetCarolines View Post
 
Quote:

Originally Posted by CakesByEddie View Post

 

 

 

I just wanted to get an idea for the very few cakes I may charge for.

 

Sounds exactly like a business to me. 

 

 

especially on cc it can sound like a business--but in reality many peeps get paid for cakes and they do not run businesses--charging for a cake or several cakes in this manner is not automatically a business even though others here think otherwise--

one baker's 'never ever do' is the next baker's 'i swear by this'
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one baker's 'never ever do' is the next baker's 'i swear by this'
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post #7 of 12

Hobbyist here...

 

Made a large cake for a friend. 8" round, 4" high with 6" round 4" high. ... what is that? 72 servings? Premium ingredient, great chocolate, fresh raspberries and lots of hand made fondant decorations (custom for Iranian new years). My materials only, were about $55. 

 

Everyone raved, everyone wanted one. I laughed. Later....

I said I spent 3 days (few hours each day, not man hours) working on it, and said they could not afford to "hire" me. Maybe, $300. My friend and I discussed then how "everyone wants one" but no one wants the bill for the fair market value. Yeah--- for $50, I could make 20... work like a dog, and lose $100. 

 

I want a Mercedes, I drive a Corolla. 

 

Just because they all want one doesn't mean they understand what work it took, or what they think is a fair rate of pay.

 

My son is a degreed construction manager, with multiple certifications. Employed full time with the city, and taking his journeyman electrician's exam soon for more credentials. A friend of a friend didn't understand why he didn't jump on the "opportunity" to do electrical work for $10/hr CASH in his house on weekends. (electricians here get $100 1st hour, and $30-$50/ hr after that). My son's city overtime rate is $35/hr at the city.

post #8 of 12

My husbands aunt from Canada was just telling me how she decided to make a cake for her sons Bar Mitzvah and how she spent $150 just on ingredients. She told me she has new respect for bakers as before - like so many others- she thought specialty cakes were completely over priced and that all professional bakers were raking it in; she had no clue what went into it until she spent that amount on box mixes, fondant and creams and everything else she needed. I feel like asking her to be my voice messaging system8)

post #9 of 12
Thread Starter 
Quote:

Just because they all want one doesn't mean they understand what work it took, or what they think is a fair rate of pay.

 

I think that's exactly how I feel.  

post #10 of 12
Thread Starter 
Quote:
Originally Posted by -K8memphis View Post
 

 

 

especially on cc it can sound like a business--but in reality many peeps get paid for cakes and they do not run businesses--charging for a cake or several cakes in this manner is not automatically a business even though others here think otherwise--

I agree.  I have been making cakes for a number of people and some insist to pay me and I just say think of it as my gift to you or to your kid or for what ever.  Plus me charging or excepting payment for probably at max 3 cakes in a single year would not be a business in my book.

post #11 of 12
Thread Starter 
Quote:
Originally Posted by SweetCarolines View Post
 

 

Sounds exactly like a business to me. 

I guess I should have been more clear on my very few I may charge for statement.  I do not believe that 3 cakes at max if that would be a business.  These are just people that have seen my cakes and just had to have one.  I do not make a cake for everyone that asks mostly people I know who would appreciate the work put into it. 

post #12 of 12
Thread Starter 

I just want to thank everyone that had provided me with information.  Even though I do not plan on baking as a business  out of my home I have been giving info that I haven't thought about which makes me feel like it would just be too much for me and take the fun out of it for me.  I like baking  and I like the wow's I get when people see my cakes even though I''m not a pro.  I'd rather hear the wow's and I have to have one of his cakes then someone getting upset for a cake that is priced fair even though they insisted on paying.  I think I will stick with asking for the cost of supplies and just tell them they can pay me what they think is fair above cost for the 2 or 3 people, a year if that, I might take on other than family and friends.

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