here was a feature in our local paper about a girl who does cakes and she charges 15 dollars for most cakes and 20 dollars max. She is living in a very high spending area, and I know she isn't covering her costs. She said she is extremely busy (well, yeah, when you charge that little) but said she uses cake mixes and what sounds like the wilton frosting recipe (she named the ingredients). I am just waiting for someone to come to complain that my prices are too high...
that doesn't sound right! 
Is that a bakery?? I would think if she was a home business the health dept. would be at her door!
Of course people are flocking to her door! She is undercharging! She doesn't even know! Don't worry about people complaining though. If they see your work then you'll be worth it! Maybe if she hears about another decorator in town and people start buzzing to her then she will raise her prices?? Then you'll be the same! LOL I don't know if it'll happen but, you never can tell with people!
Marketing 101- You're a niche market. You're selling to a different customer. A 100 dollar bottle of wine is not in competition with a gallon box/bag of wine- in terms of end user- lexus/honda, butcher shop/walmart meat dept.
I think this hit the nail right on the head for me I too have had HUGE problems pricing cakes. I just recentlly started making sure I charged a double my supplies and sometimes I am unsure of using that method. I am always nervous of charging to much.
If you sound like you're not convinced they are worth it, then how can you expect your customer to be convinced they are worth it?
This is also true if I am unsure of my pricing so will my customers!
Thank you Steph for posting this question I feel more confident just reading it
I LOVE CAKE CENTRAL 
chloe1979
There was a feature in our local paper about a girl who does cakes and she charges 15 dollars for most cakes and 20 dollars max. She is living in a very high spending area, and I know she isn't covering her costs. She said she is extremely busy (well, yeah, when you charge that little) but said she uses cake mixes and what sounds like the wilton frosting recipe (she named the ingredients). I am just waiting for someone to come to complain that my prices are too high...
Chloe -- there is also a lady in my town that does what everyone calls the "$15 deal!" When I was still practicing my cake-decorating skills, I took a cake to a coworker's home for a meeting and she said "oh, you should start selling these like _______ and do the $15 deal!" I remember thinking -- I would never do this for just $15!!
Well, apparently she earned herself in the quarterly Sunday women's magazine that is published with our paper. I sell my 8" round cakes for between 25 and 30 and that is pricey for the area I live in, but I would rather not be as busy than to be cranking out cakes in a sweatshop where I get none of my money back out of the deal.
Some people don't do their research, I guess. 
indydebi
southerncake wrote:
Chloe -- there is also a lady in my town that does what everyone calls the "$15 deal!"
What is she, one of those cheap pizza places that always has the 2 for 1 deal running?
It sounds like it doesn't it!!! She will do basically any 1/4 sheet for 15 bucks!!!!!!! A friend told me that her wedding cakes are 50 cent per serving to 65 cent per serving!!! CRAZY! Years ago I thought I would have to compete with her prices, but I have since discovered that we have very different clients!!
I thought about the health dept. They showed a pic of her work area in the paper/magazine and she is from Illinois, so I don't know what the rules are surrounding working from home. In Iowa, we can go about our business pretty much as we please, but I took steps to get a license just to be extra safe. I think it gives me credibility, too, considering it isn't required in our state.
As far as her charges, I don't know what she is thinking, but it sounds like this isn't the only person who does that, since this whole feed was started about a 16 dollar cake. We are a half hour apart in distance, and the bottle of wine quote really hits it on the mark--I have had that same situation with grocery store cakes and people comparing my prices, but once they taste it, they know the difference (I have a LONG way to go on decorating...)...
I read all this and think Wow I won't turn my oven on for less then $25.00 you have to add lights and gas to all that goes into baking and if you make all your icing homemade that cost I don't use sam's club icing.. So all that will make an 8' be $25.00 easy.
We use a very complicated spread sheet that figures costs right down to the penny, and I actually do very well on my cakes. So, I guess my point to the whole set of posts was that people should really do their research into their costs before throwing a price out there. I started out lower on my price and in the last year raised the base price for my round 8" cakes by over 10 dollars. That was purely based on increase in skill.
I totally agree with Chloe1979.. research is the key. I too started off very low in price, not just b/c of skill but also b/c I didn't really research & factor everything. Not until one day, when my mother & sister(the same one that complained) started getting me outside orders did I really sit down and re-evaluate my price list.
I realized that I was way...way.. below what I should've been charging, b/c I never factored in my time and always thoght since I had the ingredents on hand why charge extra. BOY WAS I CRAZY!! 
... And thinking back on it now.. I truly wonder how I managed making a cake for so little.....
oh btw I WAS charging $15 for 9" & 1/2 sheet cakes(fully decorated)!
step - If it makes you feel any better, my minimum charge for a plain 8" cake is $35. If they want decorations or a recipe that calls for fresh fruit or nuts, the price goes up.
Lazy_Susan
Step.......thanks for starting this, in reading the recent posts, I think I might be underselling myself on my upcoming order for a 50th anniversary for 400 people.........I actually have not given her a quote yet- meeting with her this weekend. She had my cake at another event I did and insisted that I make their cake, because it was the "best chocolate cake she ever had", then she heard how good my carrot cake was, and asked to do some of that too........I was just planning on doing chocolate, white, and lemon with different servings in a tiered cake and sattelite rounds. So, I was going to charge $1.50 per serving, now I am thinking maybe I should charge $2.00- we are in a small farm community, so anything more would be out of the question........
Wow! You guys have all been really helpful!
I guess with me because I just started I am doing that my supplies time 2 or 3 thing just because I know my skill level and what I would want to get out of it. Plus, here I don't want to be charging too much because of that bakery and I am not licensed or anything like that! I don't want to get caught. And someone did tell me that if that particular bakery finds out they WILL call the health dept.! So I guess I am just a little hesitant at keeping a base price for everything! But, I think I will start doing that using my pricing matrix and then go from there! I don't want to be getting short changed from MYSELF! LOL!
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