I have noticed on this board that there is often discussion regarding wedding cake prices. I think I have noticed that pricing is around $4.00 per person. Where did this pricing originate? I don't want to make cakes for profit or anything. I am just curious.
Because of Federal Laws against unfair pricing and price setting, let's be clear that we do not get on this site and "conspire" to set a national cake price. We are not a cartel ... we are not stating what the minimum price should be.
What we do is share common pricing in our area, based on a number of variables, such as material and ingredient costs, labor costs, overhead (rent) costs, and what the market will bear.
What a person can get in Michigan, where folks have been hard hit by layoffs at the automakers, is much different that what a cake sells for in Alaska, where the transporation costs greatly impact the end price of a cake, or what a cake price might be in New York, where storefront rents are extremely high.
The price originates with each individual business owner, based on their particular costs and overheads.
Thanks IndyDebi! I am a huge fan of yours! I certainly wasn't trying to suggest that there is some sort of pricing fixing. Cake decorating is far too wide of an industry and would require far too much coordination for something like that. I was just curious if there was some formula or business model that is the starting point. I am an accountant and complete a lot of analysis on pricing and profitability so I couldn't wrap my head around how the pricing could be the same all over.
I don't know how many threads I have seen where someone has a "cheap" bride wanting a cake for less than the "standard". Everyone seems to have an opinion on that. So it appeared to me that $4 was the standard industry minimum. Anything less seems to be deemed "giving it away". If that was the case, I was just curious how the industry came up with that. Since it isn't, nevermind.
I would say that $3-$4/serving is probably the median these days, but wouldn't call it the "standard" (if there is such a thing). You will see people from rural areas, or areas of economic downturn charging $2.00 (or less!) per serving, while others in more affluent areas or areas with a higher cost of living charging $5 and higher. Another factor that can't be discounted is skill level. In the end, it's all about what your local market will bear. I have an article here where I delve further into my theory of setting a price point.