Pricing-How You All Make It Work! Kinda Long!
Decorating By dabear Updated 19 Aug 2007 , 7:49pm by dabear
I am really curious. I do not sell cakes but would like to know how some of you do it. I see people selling 12x18 for $35-that seems like no profit. And then there's people who make $30 off a sheet cake they sold for $45(yes a scratch cake). Just for fun I figured out the cost on some recipes I like. I figured everything (I think) from tape to the box. The cheapest I found was a Dr'd cake - 9x13 for $18! A 12x15 was $24. The chocolate scratch recipes were $24 for the 9x13 and $35 for the 12X15. Does that seem right?? 
Those figures don't include my time or gas to get all the items!
I hope this doesn't come across as attacking anyones prices. Because that is not what I am trying to do here. I am trying to understand the whole pricing thing! I see the price per serving and 3x's the cost but.... nothing seems to figure in my head! 
Hopefully someone can tell me what I am doing wrong!!!! 
Here is how my basic costs break down for a 12x18 iced in basic buttercream:
3 boxes mix @ .88/ea. : $2.64
3 boxes pudding mix @ .66/ea: $1.98
12 eggs: $1.29
1 c. vegetable oil: .75
2 lbs. powdered sugar: $1.39
2 sticks margarine: .30
1 cup crisco: .50 (approx)
2 T. clear vanilla: .55
1/3 c. milk: .20
I allow an extra misc. $3 for wear on pans, electric, water, and other things like food coloring or any other little extras. That's about $12.60.
Just to add that my costs would be in the same range as Kitty's.
In this industry, the biggest expense is time. They are not so much paying for the cake as they are paying for the time and your expertise. If they wanted "just cake", they could throw it in the oven themselves.
No you don't just figure ingredients. To me, that's why a lot of cakes are underpriced. YOu have to allocate a cost for rent, utilities, misc items, payroll, insurance, etc. Time is the biggest factor that I see being omitted from the equation. Think of it "If I had to pay someone for their time to bake, cool, level, ice, decorate, delivery, what would my payroll be?"
That's why I dont' compute a price-per-cake with every inquiry. One, I dont' have the time to rebuild the same mouse trap with every phone call. Two, it keeps my pricing consistent.
My base price for non-sheet cakes is $2.50 (going up to $3 on 9-1-07). Sheet cakes are $1.50/serving. Pricing is based on the Wilton Wedding Chart servings.
So my 12x18, serves 54, is $81.
A 10" round, serves 38, is $95.
I am really I see people selling 12x18 for $35-that seems like no profit. A:
That's because a lot of people ARE selling them for no profit or almost no profit. Some say they only charge cost of supplies and that's ok. But I agree, I am amazed sometimes at what people are charging.
I do price my cakes individually but I'm in a different situation than indydebi and that's what works for me.
I have an excel sheet set up with all the things I would possible cost for, I have a priced up how much it costs me to make particular types of cakes and then when someone calls for a quote I simply type in how much of everything I would need, how long it would take me, any other miscellenous items, and the spreadsheet adds it up for me. I regularly review my base prices by checking ingredients.
I think now matter how you decide to price and it really is about finding what works for you but no matter what you do need to understand the costs of your product, otherwise you will never make a profit.
I struggle with this....I live in a southern town that is steadly growing. I asked the ady who owns the one and only cake supply store in town and surrounding areas for 50 to 60 mles..( imagine what she brings in) in her experience with her customers what do people charge...get this $1.25 per slice...and when I asked about the $2.00 to $2.50 she said that is too much for that area and she only knows on person who charges in that area and they don't have much business and she can't unerstand how she can charge that..
Example...I was there today and there was an oval 10x7 cake with a fondant/gumpaste/mazipan (not sure) person laying on top as if they were getting a massage..laying on the table and all...he had hair and towels and the whole nine yards...and it was $25.00. Now if they meant to charge more..who knows...
I have people look at me crazy when I give them a price...You know the whole wamart, sams, koger for $13.99 and a sheet cake at sams for $30.00. WHAT!!???
Ouch, that's tough. My hard candy lollipops are twice that amount. But I live in an area of Los Angeles, CA where everyone wants the cheepest price they can get. Cosco etc. (the area you live in will dictate the price of almost anything) I have given classes for what I do and my students often compain that they can't get the prices I do. I tell them this. First of all do your homework and it sounds like you have. Know your competition. BRANDING your work must be different and unique and have draw. It will put you in an advantage and you will be able in time to command your price. Keep your head up, it sound to me like your doing all the right things. Service and Quality will out do price. I know because I'm the highest price cake decorator in my part of town. It is rare for me to have a free weekend. Right now all my business friends are complaing of it being slow.
Sometimes when a bakery is offering a low per slice cost, you have to look at how big their servings are. Some claim a 6" round to be 16 slices, which I disagree with entirely. For instance, my base price is $3/serving and I say a 6" round serves 10, so that's $30.00. If a place has a base price of $2/serving and claims a 6" round is 16 servings, their price is $32.00 for the same amount of cake. It looks like my prices are 50% higher, but you end up paying more for much smaller servings with them.
When doing price comparisons it's important to not only look at the price per serving, but the serving size.
I'm so glad this came up -- it's the biggest struggle I have with cakes!
Sometimes when a bakery is offering a low per slice cost, you have to look at how big their servings are. Some claim a 6" round to be 16 slices, which I disagree with entirely. For instance, my base price is $3/serving and I say a 6" round serves 10, so that's $30.00. If a place has a base price of $2/serving and claims a 6" round is 16 servings, their price is $32.00 for the same amount of cake. It looks like my prices are 50% higher, but you end up paying more for much smaller servings with them.
When doing price comparisons it's important to not only look at the price per serving, but the serving size.
Excellent point! I saw a 3-tier wedding cake display in Sam's one day. It was a 12-8-6 and they claimed 148 servings. Oh sure! And I wear a size zero!
Sometimes when a bakery is offering a low per slice cost, you have to look at how big their servings are. Some claim a 6" round to be 16 slices, which I disagree with entirely. For instance, my base price is $3/serving and I say a 6" round serves 10, so that's $30.00. If a place has a base price of $2/serving and claims a 6" round is 16 servings, their price is $32.00 for the same amount of cake. It looks like my prices are 50% higher, but you end up paying more for much smaller servings with them.
When doing price comparisons it's important to not only look at the price per serving, but the serving size.
Great point. Hadn't thought about that.
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