Fiore, I'm truly sorry about how I pointed out that I disagreed with every sentence. I don't intend to be unkind - I just go into this analytical arguing mode which looks at the words and not the person who said them.  I've seen a lot of great posts that you've made in the past that I was really impressed with and now I wish I'd always pointed that out. I just strongly disagree with this last one.

This is a subject I've been thinking about since around March of 2012. I've had lots of time to really think it through. I've argued a lot about it and have had one falling out. So, I went straight to argument mode and I wish I hadn't approached it that wayin this case.

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I agree with this 100%., it's a major factor. Cottage food laws allow the market to be flooded with new entrants who don't have to have a basic business standard as far as ANYTHING goes. No need to figure out a business plan, no need to invest time or effort into understanding how to run a business, etc. That results in a lot of "busineses" that operate at a loss, and chances are the operator doesn't even realize it. They see the cash handed to them, subtract out the cost of their ingredients and think they're making good money. That's the mentality that depresses prices and dilutes the market so much that it drives businesses that do their pricing correctly out of business.

Illegal businesses also affect the market the same way, but the cottage food laws have basically made the low bar to enter the custom cake industry even lower. While an illegal baker will generally sell to friends and friends of friends and keep it small, cottage bakers can spread their love farther without consequences. So that lowball pricing and glutting of the market creates a new baseline after a while, which drives people out of business.

Not every cottage baker is clueless on the business end of it, but from what I've seen a healthy percentage seem to be. It's a huge part of the situation.

I've seen so many businesses on facebook announcing that they're closing recently, and most of them are saying that it's because people don't want to pay what they have to charge to make a profit.

I'm meeting another baker for lunch on Monday...she said that she wants to talk about how she can increase her bookings, so everyone is feeling it. And we got a cottage law a few years ago.

AI'll add that the internet and access to free tutorials, videos, etc is the digital equivalent of the cottage food law. In the minds of a lot of decorators, everything should be free if some things are free. I've seen some pretty angry posts when people didn't get something for free and were told that they could buy it at XYZ website. "Why should I pay for that? How dare you try to charge me!" kind of stuff. Saying that is no different than a customer saying that they think you charge too much because you want more than $35 for a three-tiered cake!

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Oh exactly. Thaey are doing wonderfully.' There's a tool for pretty much every single thing. Most unnecessary.

Also, I agree...they are charging too low, driving the price down....but I think they feel the pressure to charge SO LOW because of how many cake ladies exist.  I may not be making sense!

AI'll jump in with my experience. I always had a love and passion for baking/decorating but was only a hobby until recently, after years of baking for family only I decided to take a wilton class where, my very sweet instructor taught us not only cake decorating but how to do it as a business. She's been selling cakes for 20 years, illegally, in fact she uses doctored cake mixes but lies to her customers and tells them they are from scratch, along with criscocream. I asked her what she tells her customers who ask if it's a box mix cake her response, "deny deny deny" I was in horror! As a matter of fact, she's very proud of herself for creating many "businesses" from her students. I know one of these bakers pumping out cakes every weekend who also lies about scratch baking, I tried their cake once and found a long piece of hair in it... I also researched local bakeries and was thrown off by the irregularities in serving sizes and prices. For example, one bakery uses cake mixes and sells an 8 inch round cake (8-10 servings) any flavor and various fillings, buttercream etc for $40. A scratch bakery sells their 6 inch round (6-8 servings) basic flavors for $40. The inconsistencies are big between every storefront where I live. Makes me wonder if it's a worthwhile pursuit....

....and then add in to the mix the hobby ladies who sell their cakes purely and simply to pay for the ingredients and maybe make enough money to buy some new tools occasionally.  They don't think or care about the market, just about supporting their expensive hobby, because it can be very expensive when your giving all your cakes away for free all the time (I know).

I knew where you were coming from! 

the latest episode of "save my bakery" on the food channel  that i just mentioned in another thread is actually a nice primer in how to correct some business mistakes and move it forward-- not to mention an awesome bakeshop makeover--

I've been making cakes all my life with my mom first and secondly on my own as an adult.   My mom is known in her circles as the lady for carrot cakes and other cakes - not necessarily decorated cakes, just good homemade cakes.  But, more than a few people over the years have approached her wanting to sell her cakes on the side to their friends and co-workers.  One of the big issues has always come down to what to charge for it.  She's always felt that she couldn't (and didn't want to) complete with the bakeries for several reasons - education, home "business", etc so that factored into any price she suggested with a very very modest profit included.

I say this to say, I understand that EVERY person who is skilled and provides a service wants to get paid properly for their work.  I think we should, as many of us have suffered and/or fought hard to learn their skills in one way or the other.  BUT, at least here in the US, I can say that people want a bargain at every opportunity they can because many of the pricing for things are artificially low to begin with.  For example, many as advertised on TV products are primed and waiting for CHEAPER knockoffs - so can't afford that $19.99 product?  Just wait a few more months and you can find a knock-off for $2 at the local dollar store.  It's never ending.

But that same attitude carries over into cakes.  A person may say, I love that work by [insert the name of any TV cake/cupcake designer] but I can't afford to pay for that look.  So, they go to a local cake lady/man who's skills may vary for the knockoff version of it because ultimately it's going to be in the price range of what they want to pay.  Someone like my mom (or any other "cottage" home baker) who wants to help but has little idea how to price their work or even what price goes in the local market.

I know it's easy to blame the little person who loves to bake and will do it for friends - but I think the problem lies with the overall economic overlook for every consumer in this country (the one I know best) who wants the lowest price possible.  The very same person who will skip the mom & pop local stores (and bakeries) because the super-big Walmart has arrived in town and sells a close enough product at dirt cheap prices.  It's really sad.

A[QUOTE][/QUOTE] Originally Posted by MimiFix Several days ago a few of us discussed the problem of CC members who have no business experience but still answer questions and don't get it right. The business world is changing but these folks have no clue. They simply spit out the same old answers and become indignant when we speak up.

Well ladies, I for one greatly appreciate your words of wisdom! I am operating under a cottage food law but have researched, read, taken business and other classes to do so. I appreciate all you've done to help educate others. Thank you

Thank you, bikemom3. Your thoughts are appreciated!

ACostumeczar, I agree with you. I never would have imagined there are people like that in the cake business.... she was surprised when I told her that I am a die hard scratch baker and could tell when a box mix is used even more so when i mentioned I just recently became licensed. I tried to report the hair baker but unfortunately she taught them well, they have no phone number or address listed on their Facebook or instagram only an email address. It seems as if the market where I live is going downhill, every home baker charges $2.50 a serving with fondant and decorations. I can't compete with that! Recently a customer complained about $50 being too steep for a 6 inch round with pineapple curd, coconut smbc and rum smbc because he can get a 10-12inch cake for that same amount at a local box mix bakery! I really want to thank you all for letting me vent and for all of your wisdom.

wow that is egregious, clearly over the line, pam loves to bake, -- if you do what costumeczar suggests, i would want to present some solid irrefutable evidence to wilton--check your recording laws and maybe get her on audio tape if it is not illegal there, a phone chat might work -- or get another of her students to back up your report--

i mean she says that in the wilton class? you could even tell the store she's operating out of--she's more than a dealer, she's a meth lab

and i'm the last person to promote turning in single illegal users-- because to me it's like whack-a-mole and makes me feel bad--but i'm retired too--no irons in the fire--but this is a worthy bust imo

then again whistle blowing is not for the timid--not that you are--just saying--so it's entirely your decision and no pressure from me either way i respect that--it's a worthy bust imo but your sanity & well-being is to be safeguarded above everything else--

choices choices and more choices

like if she was your next door neighbor or your husband's boss's wife, or your kid's principal's mother and your kids are in k-5 & 1st grade-- your mom-in-law's best friend -- obviously the stakes are higher then  

AUnfortunately it is illegal to record anything without permission. As far as reporting her to wilton, I admit it didn't even cross my mind, especially with evidence but to get another student is near impossible! She is well loved and respected for teaching anyone the necessary skills to succeed as well as she has, of course in the worst way possible. She has worked for over ten years in the same Michaels store and all the workers love her especially since she gives them free cake for every class she teaches, don't think I can report her to the manager either. But something must be done! It's very frustrating to repeatedly explain to customers scratch does not taste like box mixes or canned frosting, because they are being told that's what it is! Much less the explanation of my prices because they don't pay as much for a beautiful fondant cake from so and so... I don't even bother advertising, I'd rather let word of mouth speak for my baked goods instead of me trying to explain how scratch is different, so far it seems to be working! Maybe there is hope for me after all :)

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Heh heh, maybe you could call the health department or the IRS and suggest they send someone to take a class with her and see how she's training an army of tax evaders :twisted:

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HAHAHA:D

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I can't imagine how much work it took to make that cake look THAT bad...the level of skill involved to get the fondant THAT bumpy and lumpy and sagging is ASTOUNDING!!

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A few years ago I met a decorator at a mall bridal show (blech, I know & never again!) who worked at a well-known local bakery. At the time, I think I was selling cakes for around $3.25/serving. She was going around to all the bakers and getting our info for comparison....good business, I'd say. I guess her brother was the owner of the bakery and she mentioned how she kept telling her bro that they should raise their cake prices. They started at around $2.00 at the time. Granted their work isn't pristine, or super up-to-date or all encompassing as far as CUSTOM custom cakes go.

Fast forward to today...I think they start their prices at $2.25....Seriously! That's a bakery.

I start at $3.50 for basic cake, buttercream filling and frosting, $5.00 for fondant. Oy....although I can say there's not much comparison as far as execution (with the exception of piping).

Hopefully people will see the difference and if cake is their priority, they will pick me!

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Yes...this!

I think we can all just blame this on Walmart....EVERYONE has come to expect WALMART. Everything else, regardless of it's higher quality, is seen as outrageous highway robbery. People think that about child care. And it is crazy. But for crying out loud, you are entrusting another person with your little human. It's why I haven't worked outside of the home for 12 years (and 4 kids later)....why in the He!! would I pay someone else to watch my babies grow while I was out working JUST to pay for daycare? Unless I was pulling down six figures, it's just not worth my time.

You have to be offering a unique cake (for your area....I can find plenty of people around the globe that do similar cakes to mine...but not in my immediate area) to command higher prices. Sure peope will come to you wanting a more traditional cake but the reason they notice you in the first place is because of a cake that stood out from all the others via website, pinterest, FB, etc.

This, at least, makes sense in my area of suburban Cleveland. My immediate area is where the majority of my customers are from, but as I am trying to take on more business, I will need to widen my scope and consider some new strategies.