If you don't have any cake decorators in your own town, check the websites of cakers/bakeries in the nearest large town. For example, I live in a small town so I would check out prices in Columbus- the nearest big town. If you also have a mid-size town close, check that too. Pick your delivery radius. Let's say 30 miles. What towns are within 30 miles from your town- in all directions? Those would be your competition.
I am in the same situation!!! I makes me a little crazy! I absolutly hate pricing my cakes. For starters, I feel like they aren't good enough and I am still learning. But also, I feel like I shouldn't charge my friends and family an arm and a leg for a cake. I mean, its just a cake. But at the same time, I can put a good 10-12 hours of work into one cake 
I really enjoy decorating the cakes though! I showed a local baker a pic of one of my cakes and she said she would have easily charged $180 for it! I almost died. I gave the cake to a neighbor for nothing! I guess I really need to get over it!
Yeah, you do. Even when they hint how much someone loooooves your cake. "Thats so nice. Let them know my minimum is a $100". And that was said to a close family friend.
I mean, its just a cake. But at the same time, I can put a good 10-12 hours of work into one cake
!
See, it isn't "just a cake," it's 10-12 hours of your time, which does have a value to it. Again, think about it like this: If your boss asked you to work an extra 10-12 hours, would you want to be paid for it, or would you just do it out of the goodness of your heart?
Meant to comment this morning...
Got pulled in one of the 5,000 directions I get pulled daily. But I just wanted to touch on ThreeDGirlie's comment about building a client base. (I'm working on my cookie pricing for favors.) If you're in a position to slowly build your base or spread the word, why not target those who will pay what truly is the fair price for your product? Which includes a lot of time and effort to design their custom goodie!
Thanks ThreeDGirlie for your comment! It helped me say to myself "See!, THAT'S how you do it!....you're on the right track!!"
So You know how I mentioned earlier in this thread that there really isnt anyone other cake decorators around me ...haha well I get home last night turn on Ultimate Cake Off and hear one contestant say hes from a town only 30 min from me! 
lol I had no idea! Ive never even heard of them! So of course i went straight to the computer and checked out their website and their cakes are A-MAZ-ING!!!
What works best for me, if family, friends or relatives ask for the price of a particular cake:
"just a SMALL one, you know for a few people with ONLY little decorations, nothing fancy, bla bla bla..."
I answer: "All my cakes are made from scratch and are therefore very labor intensive (''Beng'' gone with the LITTLE decorations cake), regardless of the size ('Beng, gone with the SMALL cake). I don't know all prices by heart, you better check my website which gives accurate information about pricing (Beng no further questions)."
I never state prices in a conversation, at a birthday party etc.
And as a rule I give family and friends a 10% discount on my regular prices. That is clear for me and for them.
Well this topic certainly made me feel better tonight! I had a "friend" from work ask me if I would make a cake for a baby shower for 50 people and what would I charge? She said a "simple sheet cake WITH a bassinet on top WITH a baby boy in it AND a binkie AND a bottle." Hmmm. I told her I would do it in buttercream only, no fondant (because of time and money) for $55. She did tell me that my cakes were beautiful but my price was out of her range and she had decided to go with a Costco cake. Ha! I said "no problem, I can't really go any lower in my prices due to ingredients and time and good luck with your baby shower!" It felt great to know I was not going to throw my back into a cake that I would make nothing off of. $55 was a steal, I think.
Thank you for the comments about undercutting the competition. That is a subject I don't think most people think about. In this economy it is only fair to charge a fair (higher) price. People who want custom cakes will pay custom cake prices. People who will only pay walmart prices can have their cake and eat it too . . . it just won't taste very good! :~)
Thank you for the comments about undercutting the competition. That is a subject I don't think most people think about. In this economy it is only fair to charge a fair (higher) price. People who want custom cakes will pay custom cake prices. People who will only pay walmart prices can have their cake and eat it too . . . it just won't taste very good! :~)
That's a point I try to make to brides, and it's kind of an "aha" moment for a lot of them. If you "save" money by buying a cheap cake, you'll probably really be wasting money because you're going to be buying a cake that won't be eaten. Lots of half-eaten pieces left sitting around on plates everywhere...
And you're right, $55 for what you were describing was a steal! 
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