Pricing Q's Sorry

Business By agroeve Updated 18 Jan 2009 , 2:13am by indydebi

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agroeve Posted 17 Jan 2009 , 1:51pm
post #1 of 4

Hi all, i work from a kitchen specially built for cake making and decorating am all legal etc. but i am struggling to work out the best way to price. i work alone an am fairly new to this so charging by the hour wont work. i've read that most cost the ingredients and times it by 3. to be honest i wouldnt pay that much for a cake so how can i expect others to. that sounds like i'm picking on ppl darn it. i'll put it this way :
10" round madeira with jam and butter cream filling and fondant covered with piped royal icing to base and a message costs me £16.86 to make.
so if i charge 3x =£50.58 without flowers etc. sounds very expensive to me.
and what about bouquets and models how on earth do i price those.
sorry its a bit long but i've got some telling me i'm not charging enough at 2x but 3x seems too much. i have altered my prices on my site to 3x and ppl are looking but not buying. i want to drop my prices to 2x but dont want to look like i'm cheap either or make others look bad for their prices.
any help would be great. thanks

3 replies
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trumpetmidget Posted 17 Jan 2009 , 5:52pm
post #2 of 4

Just because you won't pay that for a cake doesn't mean someone else won't. You are a specialty baker, not costco, walmart or something equivalent in the UK. I actually don't agree with the charging 3 times your ingredients - that is not enough for me. A cake may only cost my $6 to make, which would be $18 if I triple it. However, I spent 5 hours on it. So, I am only making $12 when you subtract my cost and then about $2.40 an hour? You've got to be kidding! I charge $3 a serving to start. Fondant, special decorations, carvings - everything is more. And I will not make a cake for less than $30. Ever. You need to realize you are worth it. It took me a while to come to that realization. As for models and things, that depends on how intricate. I charge at least $10 a model, but like I said - depends on the figure. Remember you are worth it. People will buy your cakes. You need to make money if you are going to be in business.

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costumeczar Posted 17 Jan 2009 , 9:35pm
post #3 of 4

I agree, the 3x the ingredients formula is totally random and wouldn't pay me minimum wage. Remember that you're not only paying yourself for the decorating time, but also the shopping, baking, cleaning, bookkeeping, website-monitoring and email returning that you do.

A better way to go about it would be to look at other shops in your area to see what they're charging, and base your pricing on what 's customary in your marketplace as well as on your own expenses. That way you won't be totally out of hte range of normal for your area, but you can also adjust the price up some from the low end of the range to distinguish yourself as someone who doesn't do run-of-the-mill cakes.

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indydebi Posted 18 Jan 2009 , 2:13am
post #4 of 4

Agree. NEVER based your pricing on what YOU would pay. I'd never pay $300 for a purse, but somebody is making money selling to all of those women who ARE willing to pay that.

The times three theory would bankrupt me in 2 minutes .... and every CC'er would be down my throat because of the CHEAP prices I'd be charging. I dont' know how that theory got started, but I dont' see how it works in this biz.

Trumpetmidget had a great illustration ... $6 in ingredients but 5 hours in labor. Your ingredients are not the biggest hunk of your expenses in this biz .... it's your labor. Just because you're not writing yourself a check (yet) doesn't mean it's not a legit expense.

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