Should I Tell Her To Raise Her Price?

Baking By mkolmar Updated 16 Jul 2011 , 7:42pm by Harrisburgcupcakes

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mkolmar Posted 31 Jul 2008 , 4:29am
post #1 of 24

A lady I know sells cupcakes only out of her home (In OH so it's legal) She says she is making a killing and is taking business away from the strictly cupcake storefront in town. There cupcakes start at $2.99 a piece.
Her best seller is a triple chocolate cupcake with a chocolate center - chocolate icing and a raspberry on top. Her next one is mandarine orange cupcake.
I'm glad it's working out for her but she's only charging $1.25 a cupcake. That doesn't seem like much of a profit to me or am I crazy. By the time she drives to pick up the ingredients, bakes them, packages them and then delivers that doesn't leave much room for a profit. I want to tell her to raise her prices to cover her costs better but I don't know her that well and am afraid she'll get upset. Should I say something or not?

23 replies
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cakedout Posted 31 Jul 2008 , 4:58pm
post #2 of 24

While she may be undercutting the local bakery, if she is happy with her profit margin, then don't let it concern you.

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doughdough Posted 31 Jul 2008 , 5:09pm
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I wouldn't. Even if you go out of your way to be extra nice about it, chances are she won't take it very well.

Hopefully she'll figure it out on her own, after exhausting herself making so many cupcakes and not having much $$ to show for it!

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mcelromi1 Posted 31 Jul 2008 , 5:18pm
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Originally Posted by cakedout

While she may be undercutting the local bakery, if she is happy with her profit margin, then don't let it concern you.

If she's happy with the money she's making, why is it bothering you.
Your idea of what a decent profit is and her idea may be on two different levels.
If she says she's 'making a killing', then the money coming in obviously satisfys her needs.

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mkolmar Posted 31 Jul 2008 , 6:17pm
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We use to hang out but just kind of drifted apart because we are both busy with our families. I know her family is having money issues and struggling. I guess She decided to start up this small business on a whim to help her family out. I just have a soft heart and know that she's not making the profit she really thinks she is because she's not counting in a lot of her costs.

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chutzpah Posted 31 Jul 2008 , 6:47pm
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Start oredering your cuppies from her and then sell them at a much higher price.

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indydebi Posted 31 Jul 2008 , 10:24pm
post #7 of 24

Gosh, I luv those competitors who sell their wares so cheap! Because at those prices, I wont' have to worry about them being a competitor for very long.

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mkolmar Posted 1 Aug 2008 , 12:36am
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chutzpah--Now that's an idea icon_twisted.gif

I actually had someone we are both friends with cancel her 2 dozen order with me and go with her yesterday because she's cheaper. I honestly could care less about that because of what exactly Indydebi stated. She won't be in business long with those prices.
Normally I would let something like this go, but since I do know her and know her family is struggling that's why I was concerned. Honestly though, I learned the hard way about pricing and did research so I put the time in, my DH says to let her figure it out the same way.

I decided I'm not saying a word. She would probably ignore it anyways.

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sjmoral Posted 1 Aug 2008 , 12:58am
post #9 of 24

Maybe she is charging what she is willing to pay for one cupcake, that's what I do with my cakes.

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jibbies Posted 1 Aug 2008 , 1:16am
post #10 of 24

Don't tell her what to do! It will end up in a real life drama like some of the threads on here.


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mkolmar Posted 1 Aug 2008 , 3:54am
post #11 of 24

No trust me. No drama. She's not like that and neither am I. We both grew up in drama filled houses and want nothing to do with drama. I never planned on telling her what to do at all, just was going to suggest that she raise her prices since I know they are struggling (and she is priced low with what she makes). We use to be closer and I still care about her and her family.

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7yyrt Posted 1 Aug 2008 , 7:40pm
post #12 of 24

You might say, "Honey, I know you're trying to earn extra money, but I'm concerned you haven't included all of your costs." If she's a friend, you might help her to realize she needs to count _____, too.

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Jasmine33 Posted 2 Aug 2008 , 2:16pm
post #13 of 24

Your cupcakes are cute, how much are YOU charging? That must be annoying having a competitor undersell like that.

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mkolmar Posted 3 Aug 2008 , 3:20am
post #14 of 24

It can be, but it doesn't bother me that bad because as Indy stated...they won't be your competitor for long with those prices.

I charge a simple decorated cupcake the same I do for a slice of cake, because it's still the same serving size as that slice, which is two dollars for my pricing.

I'm almost done baking for profit though. I have only one more cake on the books to complete as of now and then I'll more than likely be done since I'm leaving the kitchen I'm licensed through since we don't see eye to eye. I'll take this time instead to sharpen up skills and hopefully learn some new ones too.

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imakecakes Posted 3 Aug 2008 , 3:49am
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You could always refer her to this site. I came here originally to look at the cakes in the galleries, but soon entered the forums and have learned sooooo much from everyone! Just make the suggestion for the site and let her figure the rest out on her own.

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Jasmine33 Posted 3 Aug 2008 , 7:19am
post #16 of 24

Well I hope you find a new place soon. You have some very nice cakes and cupcakes. icon_smile.gif

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banba Posted 10 Aug 2008 , 1:21am
post #17 of 24

Have I read this right

you are concerned about this lady because you know herself and her family are struggling and you don't want to see her undercharging when she could be making a little more for her family

but you also know that you don't need to worry about her taking business from you or about her being a competitor because at those prices she won't last long

now you can't decide if you should say something to her or not?

youre not concerned about your business but you are concerned about her and her family so if you really want to help her out then say something

you are on the verge of a doing a good deed but not sure because of her reaction so is that a good enough reason to just walk away from doing the good deed even is she does not recognise it as one?

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debster Posted 10 Aug 2008 , 1:34am
post #18 of 24

What part of Ohio are you all in? It's hard to get 2.00 for a cupcake where I am west of cleveland unless it's the jumbo ones. People have a fit at 1.50 here and say I'll go to Sams. Now 20 min away from me they pay almost 4.00 per serving for cake and 2.50 for cupcakes. I'm rurual. I say go ahead I can't beat their prices. Now do you want homemade or that. You choose. That's speaking of Sams.

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mkolmar Posted 10 Aug 2008 , 4:31am
post #19 of 24

Near Toledo is where I am located.

Banba- I'm not one to chicken out about talking to someone no matter what the situation. I just wasn't sure if I should in this case because of how things are. I don't know her that well anymore. In fact we have not talked in probably almost 2 years. I heard all of this through the grapevine and wasn't sure how she would take this information after not seeing each other for so long. I was never able to tell her what I thought about her raising prices. Their number changed and I was never able to call her.
I resided to the fact that if she is happy than why should I bother. I don't know how much her expenses are or other important factors. I make costly cakes, she may not be (even though they sound more costly doesn't mean that they are) She knows what I do and since I can't contact her, if she has questions she can get a hold of me. I wish her the best. icon_razz.gif (You are a good person to be concerned though as I'm sure how this post sounded. I don't word things that well at times.)

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Schmulie65 Posted 20 Aug 2008 , 5:04pm
post #20 of 24

I live in the Chicagoland area and have recently started taking some orders from friends and now friends of friends have started to call. So, I really need to get my pricing aligned. So far I have only done cookies/bouquets, but someone has asked me for cupcakes. I am not sure what to charge. I would be doing baseball themed cupcakes -- maybe to look like baseballs or caps. Is $2.00 to much/to little?? I have no idea. Thanks for your help!


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mkolmar Posted 20 Aug 2008 , 10:18pm
post #21 of 24

you need to actually sit down and consider how much it costs for each item you are using to make the products. What I mean is if you use 1C. of milk you need to figure out how much that 1C. is costing out of the whole jug. This needs to get done with every single food item that you use and also for every recipe. That way you know how much that item is costing you to make and then you can figure in how long it's going to take you and how much you want your hourly rate to be. The sooner you do this the better. That way you won't screw yourself over by lower pricing and have issues later on possibly if you need to raise them.

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amaryllis756 Posted 14 Jul 2011 , 11:26am
post #22 of 24

I think that is the hardest thing in this world of CUPCAKES is pricing. There are so many opinions in this forum, it is hard to keep track. Sure, I would like to charge more and make more profit, but you have got to consider your market. I live in an area where you can't charge more than $2.00 a piece for a single cupcake. (I know I wouldn't pay it). It really depends on where you live, and what the market it. The economy in Michigan is bad right now, so sometimes money is hard to come by. I do suppliment our income with my sales, so I am happy. The last time I listed my prices. I was told I wasn't charging enough. I have yet to really include my time (as minimum wage) and make it a reasonable price for customers. I guess you have to ask yourself this question>Do I love what I am doing? If not, then I guess you are not make the profit you need to count all of your time. To me, it is an enjoyable task. I don't have to work outside the home, and to me that is what I really enjoy about doing this. It's more of a philosphy than producing profits, I guess. Though, I do happen to make a good profit. Maybe things will change in the future for me, but right now it's working! icon_biggrin.gif

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Noobz Posted 14 Jul 2011 , 1:02pm
post #23 of 24

I would just tell her, it isn't something mean and if she listens she'll be better off. If she doesn't you haven't lost anything.

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Harrisburgcupcakes Posted 16 Jul 2011 , 7:42pm
post #24 of 24

I dont think you have a right to tell her to raise her prices, but for that price you would have to question the quality of ingredients. I will, at times, hear people say why would you pay $3 for a cupcake from a cupcake shop when you can get one at your local grocery store for 1/3 the price. Simply put, quality ingredients. If you are offering the same quality as your competitor and charging double then the customers will go elsewhere. If you are using high quality ingredients and baking from scratch the taste cant be beat and your customers will gladly pay the extra money for something that is of a higher quality.

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