Concerned About All These Pricing Threads....

Decorating By Deb_ Updated 25 Jan 2010 , 6:28pm by Katiebelle74

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Mensch Posted 13 Jan 2010 , 5:07pm
post #181 of 200

I have five. party.gif

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LaBellaFlor Posted 13 Jan 2010 , 5:12pm
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Quote:
Originally Posted by Mensch

I have five. party.gif


icon_razz.gif

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FromScratch Posted 13 Jan 2010 , 6:09pm
post #183 of 200
Quote:
Originally Posted by Mensch

I have five. party.gif




Bitch...

icon_wink.gif (you know I luv ya)


I just want an oven where I can bake on more than one rack. *sigh* Try baking 26 layers (and then 6 more because one of those cakes was SUPPOSED to be square... yeah... totally did that) for one weekend in a little oven that's not even a convection oven so you can only use the middle rack. That, my friends, is frustration.

My next investment is going to be a commercial oven and a 10 qt mixer. Just have to find someone to buy my kidney on the black market... icon_lol.gif

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Mike1394 Posted 13 Jan 2010 , 6:12pm
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Quote:
Originally Posted by Mensch

I have five. party.gif




You have five ovens with three racks???? icon_biggrin.gif

Mike

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FullHouse Posted 13 Jan 2010 , 6:23pm
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I have 2 ovens with 5 racks (3 in convection, 2 in regular), makes life so much easier. My DH thought I was nuts that it was one of my top 5 requirements when we were house hunting.

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LaBellaFlor Posted 13 Jan 2010 , 7:49pm
post #186 of 200
Quote:
Originally Posted by FullHouse

I have 2 ovens with 5 racks (3 in convection, 2 in regular), makes life so much easier. My DH thought I was nuts that it was one of my top 5 requirements when we were house hunting.




icon_cry.gif Now I'm really jealous! icon_cry.gif

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cakesweetiecake Posted 14 Jan 2010 , 3:03pm
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I am on a mailing list and today I received this great article on

Denial About Financials Leads to Failure
The husband-and-wife team behind a struggling ice cream manufacturer enjoy the perks of being owners but won't apply that enthusiasm to managing their finances

http://www.businessweek.com/smallbiz/content/jan2010/sb2010017_484404.htm?link_position=link3


There was also a link to this article

Pricing: The Magic Number
If you don't have a carefully considered pricing strategy, chances are you're leaving money on the table. Here's how to figure out what your prices should be


http://www.businessweek.com/magazine/content/06_52/b4015452.htm


Some key points:


The "charge based on what the other guys are charging and hope to squeeze out a profit" method of pricing, otherwise known as "cost and competition," is used by plenty of companies, both large and small. It's intuitive and can be relatively easy to work out. But it often leaves a lot of money on the table.

...the cost-and-competition method has little to do with how your customers value your products or services.

While both cost and competition are important, they shouldn't be your focus.

Developing a pricing strategy begins with determining the true value of your offerings to customers.

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Mensch Posted 14 Jan 2010 , 6:05pm
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Excellent article about the ice-cream owners!

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CeeTee Posted 14 Jan 2010 , 7:39pm
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Very excellent articles!

I want to highlight this which was actually in the comments section of the second artice.

Typically, small business startups come into an established market and price themselves just below the established businesses so as to give themselves a sales wedge into the market. But the established businesses just wait them out because the newcomers are doomed from the start because they have not priced for profit. This is a major reason why the failure rate of startups is so high.

This sounds like it can apply to about 90% of the pricing/starting out posts we get here. I know the Price Undercutting strategy burned me big time, and it doesn't seem to be the best system to use with custom cakes and premium pastries. So yeah, the question "How much do I think MY time and talent is worth?" should be the very first thing a baker/decorator should ask themselves before they even consider trying to sell cakes.

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LaBellaFlor Posted 14 Jan 2010 , 7:55pm
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But you know what CeeTee, as much as they think their cakes are worth, there seems to still be a shut down, cause the other thought that comes with poor pricing is "No one will pay those prices".

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CeeTee Posted 14 Jan 2010 , 8:02pm
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LaBella: But that shutdown is a mental one, not a marketplace one. A new decorator has to get over the "No one will pay if I charge that" mindset because they've then failed before they even start. If you try to do what you think others will pay with no regard of what it will cost you (be it financially/timewise/education ect.) then you will never make a profit and you're just shooting yourself in the foot.

I'm not saying a new baker needs to say "I'm worth a thousand dollars and HOUR", but they need to NOT think "Oh the local bakery only charges X so that's what I should charge too cause that's all I'm worth"

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CeeTee Posted 14 Jan 2010 , 8:19pm
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LaBella: I also just read your post as meaning that if a decorator charges a low price to start then the person they are selling to balks, then it starts an ugly cycle of downselling ones talents in order to make any sale at all, leading to a frustrated decorator ready to give up trying to make a go.

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LaBellaFlor Posted 14 Jan 2010 , 8:37pm
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Oh no, you right. It's definetly a mental one. It's one I wish everyone who sells cakes or is starting to sell cakes realizes is not true. I've seen too many times on here, I know my cake is worth more, but no one will pay those prices. That is not true. And I'm not in NYC or LA either...cause the next thought is I'm from a small town.

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Deb_ Posted 14 Jan 2010 , 8:47pm
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Nobody will value our work if we don't!

That's for everyone who says "I can't charge $xxx, nobody will pay it in my small town"

We don't want the people who "won't pay it" we want the client that will, and they're out there.

I never ever in a million years would have thought I'd be able to get the price I charge for my cakes....especially with Walmart and the other big box stores so close to me.

There's a market for all price ranges and the key is to market to the correct one.

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FleurDeCake Posted 14 Jan 2010 , 9:14pm
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wow great info

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indydebi Posted 14 Jan 2010 , 10:19pm
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Quote:
Originally Posted by dkelly

Nobody will value our work if we don't!

That's for everyone who says "I can't charge $xxx, nobody will pay it in my small town"

We don't want the people who "won't pay it" we want the client that will, and they're out there.

I never ever in a million years would have thought I'd be able to get the price I charge for my cakes....especially with Walmart and the other big box stores so close to me.

There's a market for all price ranges and the key is to market to the correct one.




DITTO! DITTO! AND EXCLAMATION POINT AFTER ALL OF THEM!!

I had a walmart and a Kroger within 3 minutes of my shop. And I sent a lot of folks over to them. But I also had plenty who wrote their checks out to me.

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CeeTee Posted 14 Jan 2010 , 10:49pm
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dkelly got it in one!

As a Home Baker, these are the questions/priorities I go list through before I consider selling a cake, pretty much in order of importance:

- How well do I think I can execute the design they want (aka: difficulty level for my current skills)
- How much time will this take
- What does my calendar during the requested time frame look like and if there is something I would need to pass on in order to do the cake, and is it worth tabling/rescheduling it
- How much the initial ingredients and supplies will run me

I stopped factoring in local bakery prices long ago. I did do research to figure out what the going rates for premium cakes are in my area, but I found it to be very inconsistent and not a good way to base my pricing on. Some shops sell for less than I'm willing to work for, and frankly, they can afford to! Matching or undercutting the cheaper shops is counter-productive.

I don't get offended or feel bad anymore if someone chooses to go to a grocery store OR a specialty bakery than pay my price. I've started to think ahead in that if someday I do decide to open my own shop, I will do it on my terms and my pricing. In the meantime, I won't cheapen myself to do work for substandard pay under the table just to 'get my name out there', because that's not the name I want to spread. I don't want people to buy my cakes because I'm cheap, I want them to buy my cakes because they are My Cakes and My Cakes are Awesome and they Must Have one. If that means I don't make as many cakes for now, that's fine with me. I'm willing to wait till I'm Legal to make a profit. icon_smile.gif

Unfortunately, I had to learn that lesson the hard way. (I think I could write a post on how a cake newbie should NOT to price cakes rather than how to figure out a price! icon_lol.gif )

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Deb_ Posted 15 Jan 2010 , 12:22am
post #198 of 200
Quote:
Originally Posted by CeeTee

I don't want people to buy my cakes because I'm cheap, I want them to buy my cakes because they are My Cakes and My Cakes are Awesome and they Must Have one. If that means I don't make as many cakes for now, that's fine with me. I'm willing to wait till I'm Legal to make a profit. icon_smile.gif





Completely agree with ya!! Once we get caught in that trap of pricing to please the masses it's so hard to climb back out.

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cakesweetiecake Posted 22 Jan 2010 , 3:16pm
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Came across another article. It touches on some of the stuff in this thread.

How to Find the Pricing Sweet Spot
Tune in to customer needs and offer the right product at the right price point


http://www.entrepreneur.com/money/moneymanagement/moneymanagementcolumnistjosephbenoit/article204732.html

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Katiebelle74 Posted 25 Jan 2010 , 6:28pm
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I love Earlenes website : http://www.earlenescakes.com/Index2.html

it was amazingly helpful to me when I transitioned from Pastry Chef to having my own small cake biz. Of course being a pastry chef and knowing other local pastry chefs helps too! But there is a wealth of info for the newbie who just started daydreaming their way into this process in my opinion EVERY new wanna be cake person should go read ALL of her business of cake articles before they do ANYTHING.

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