Is This A Reasonable Price For A 4 Tier Wedding Cake?
Business By Blueridgebuttercream Updated 8 Dec 2013 , 6:28pm by jason_kraft
So I got a request for a wedding cake to feed 180, fondant with modeling chocolate fall leaves. The customer gave me a picture of a 4 tier buttercream round cake and said she wanted a similar design, but square tiers. Based on a calculated cost of $160 for ingredients (scratch baking) and supplies, and the other local shop (the one I bought my wedding cake from, probably box mix cakes) being listed as $3-4/serving, I quoted her $2.50 per serving, or $450 total, because I'm just starting out and trying to get more business. My other emails she replied within the hour, now she hasn't replied for a week, so I expect she's decided it was too much. Was that price nuts?
(Just to forestall the questions - home-baker, not inspected yet, but legal in VA, licensed, insurance in the works)
You might be to high for her. But at $450- $160 for ingredients your looking at a gross profit of $290 that's not giving you much for your time. Plus you have to figure the cost of your utilities and you gas for delivery boards rowels and all the little things we forget to count. In the end unless you really work fast you probably aren't even making minimum wage
Peg and Karema, thanks for your opinions. I have a hard time believing anyone actually pays that much for cake (I sure wouldn't!), but I'll take your word for it. We must have very different financial situations, 'cause if I got the order, the whole time I'd be thinking, "Wow, I'm making a whole $290 at a job I don't hate! I've never done that before!"
In general about the financial advice I've seen on here: not everyone is in a position to sneer at minimum wage. From down here, it looks pretty good to me. Actually, when I think about it, there is no way for a mother like me to make more than minimum wage at anything other than cake decorating either, because I'd have to make more than $18/hr to end up with minimum wage after paying daycare costs. And you can't make that around here in my (former) field, even if the jobs were available.
Leah, could you explain to me why it is illegitimate to have a range of prices (corresponding to a range of skills/offerings) available to the consumer? I don't understand this. Should I charge the same price as the best decorators in town? Because my skills are not equal to theirs and anyone with the choice between a world class decorator and myself at the same price is going to choose them. But not everyone wants a world class decorator. I know when I was buying my own cake, I was perfectly happy to pay a lower price for a competently decorated and decent tasting cake.
The quickest way to cake burn out is under pricing. While it sounds good, you have to keep in mind how much time away from your family you are spending working on this cake.
You also don't want to be know as the cheap decorator, because then people will want grander and grander cakes for very little pieces.
Leah, could you explain to me why it is illegitimate to have a range of prices (corresponding to a range of skills/offerings) available to the consumer? I don't understand this. Should I charge the same price as the best decorators in town? Because my skills are not equal to theirs and anyone with the choice between a world class decorator and myself at the same price is going to choose them. But not everyone wants a world class decorator. I know when I was buying my own cake, I was perfectly happy to pay a lower price for a competently decorated and decent tasting cake.
World class decorators charge a lot more than $3-4/serving. It is very important to look at what the market is in your area and try to stay in line with those prices (while still making sure you are earning a decent wage and funneling profit into your business).
When you eventually grow your business you may have to find a whole new set of customers once you increase your prices, so you may as well increase them now so you can build a more profitable customer base. And when you do increase your prices, how do you think you will feel when competitors pop up with a similar skill level undercutting your prices?
Price wars are great for customers in the short run, but in the long run the only winners are the businesses that are the best at cutting expenses as opposed to providing quality products. Walmart uses a variation of this strategy with great success -- they move in to a town, cut prices (sometimes even taking a loss) until their competitors are out of business, then they push prices back up once they have a monopoly.
I believe the OP was basing her pricing based on her own estimation of her skill level. Nothing wrong with that IMO. What she may have done though was under price her cake so much that the customer thought that she must not be any good!
If you want to offer a discount without looking like you're desperate, my suggestion would be to quote a higher price but show a 'new customer discount' of X%. That way you will be able to create the cakes that will give you more experience and confidence, PLUS it implies that any future order will not be discounted. Hopefully by then you've got 'em hooked on your cakes and you can get paid what you'll be worth. Just an idea! 
I appreciate all your opinions and responses.
Carmijok, thanks, that's pretty much what I was saying.. And considering this person was referred to me by a former customer who (I have no doubt) gave her a rave review, it's unlikely that she thinks I suck because I'm so cheap. I'm surprised that it seems so hard to believe that she thought that was too much. I do not live in a major metropolitan area; I live in a rural area currently saying "Recession is over? Are you kidding me? We're still in the Depression!"
There actually are a class of people who only have so much money in their budget for the cake. Jason, you may choose not to target them as your customers for your business. Does that mean no one should cater to their needs and price range? Not everyone has to have the same business plan and target. Good thing, or we'd all be competing for the same small segment of the population.
I'm not "stealing" anyone's customers by targeting my services to a lower income bracket; if they only have $400 to spend, my charging a higher price isn't going to make them go to the established bakery and shell out $1000. They have to get their cake somewhere. Why should they have no choice other than Wal-Mart? As far as how I would feel if someone "undercut" my prices, well, there's more to cake than decorating skill and price; I'd just make darn sure that there is something different or better about my cakes that justifies the higher price. It's a business. I don't have a moral right to a certain profit margin or to have my competition not compete.
There actually are a class of people who only have so much money in their budget for the cake. Jason, you may choose not to target them as your customers for your business. Does that mean no one should cater to their needs and price range?
Of course not...many grocery stores, Walmart, Costco, etc. offer cakes for cheap, as do legions of Craigslist bakers who don't know how to price. If you can't afford a premium price, you probably won't get a premium cake...it may not be fair, but that's life.
It's fine if you want to limit yourself to people with low budgets, just be aware that you will most likely end up doing very simple designs (or doing elaborate designs for below minimum wage if you don't force your customers to compromise). The former may be OK if you enjoy the baking aspect more than decorating, but the latter will eventually make you resent your customers and your work.
there's more to cake than decorating skill and price; I'd just make darn sure that there is something different or better about my cakes that justifies the higher price.
That's a great outlook, an additional competitive advantage is always a plus. The primary target for the bakery I founded is relatively downmarket, as our basic BC cakes range from $50-150 and are about 90% of our orders. We can make this work because we offer a product no one in the area can match, but if you want to create elaborate multi-tier works of art every week you would likely be disappointed working in this kind of business.
I've been reading some of your comments about cake pricing and I try to stay right with my competitors for pricing or a little below because I know pricing too low is bad and pricing too high isn't good either. But I have a request for a full sheet cake, covered in fondant AND I have to ship it. So here is what I came up with and I'd like some opinions because I've never done a full sheet in fondant and shipped it. Though I have done a designer cake (2 shoes with the shoe box) and shipped with no problem. I firmly believe the verse in the bible where it says "God likes a just weight"...so I try to think of that whenever I price my cakes and I've been in business for 9 years now (online store). From what I've learned your suppose to double the cost of whatever it cost you to make your cake. I'm going to use 4 boxes of cake mix and just add my touch to it since I've never like the consistency of cake mix but I've come up with a recipe to make them taste SO much better but, here is my breakdown:
Cake ingredients: $37.50
Doubled, Total: $75.00
Boards,Cover, Frosting, Fillings: $30.00
Total:$90.00
My cost, labor, time:$80.00 (I charge $10 per hour)
Total:$170.00
Fondant/Decor: $100.00
Total:$270.00
Tax: $22.57
Final Total:$$327.55
This does not include
ackaging/dry Ice and shipping.
I live in the Colorado area if that will help.
Appreciate the feedback...only "CONSTRUCTIVE" critcism please. Thanks.
Cake ingredients: $37.50
Doubled, Total: $75.00
Boards,Cover, Frosting, Fillings: $30.00
Total:$90.00
My cost, labor, time:$80.00 (I charge $10 per hour)
Total:$170.00
Fondant/Decor: $100.00
Total:$270.00
Tax: $22.57
Final Total:$$327.55
The total cost for ingredients and supplies is $105 ($75 + $30).
What is the $100 figure for fondant/decor, is that ingredients, labor, or both?
My advice would be to add your profit margin to the final price including shipping (20% or so). You'll also want to get a quote for shipping and see if your customer still wants to go through with it, I'm guessing you will spend at least $150-200 just for shipping/packaging, which would increase the price of the order to the $600 range.
Plus if you've never shipped a fondant-covered cake before you'll want to do a trial run to make sure your packaging method doesn't compromise the design.
Thanks Jason, the $100 is for making the fondant/labor. The first time I shipped a cake I actually put a photo of it outside the box with a "Please don't drop this cake sign" AND insured it (don't know if that help but, it got there without a scratch). This cake would be shipped over night, I'll still need to get a price on that. I don't have time for a dry run since it's due by 13 April. My customer knows the risk and I'd offer a % back if it arrived damaged?
So it will take you 8 hours for prep/baking/cleanup and another 10 hours to make the fondant and decorate?
I'm not sure if insurance will help, since it usually only covers you if the shipper does the packaging themselves. You can basically assume that the box will get thrown around regardless of what you put on it.
Personally I would offer a full refund if the cake was damaged. Presumably they are buying the cake for your decorating skill, otherwise they would buy one locally for a fraction of the price.
Yep, that just about covers my cost as I'll be doing this over a two day period in a commercial kitchen I rent. I did suggest a local Bakery but...they wanted me. I'd only offer a full refund if the cake was horribly dammaged, we both know the possibilities and risk of shipping. But I'm hoping to package it just as well as my last but this one would be shipped over night un-like the last which took 3 days. Appreciate your input. Have a good one!
Yep, that just about covers my cost as I'll be doing this over a two day period in a commercial kitchen I rent.
How much do you pay in rent for your commercial kitchen (hourly or daily)?
Thanks Jason, the $100 is for making the fondant/labor. The first time I shipped a cake I actually put a photo of it outside the box with a "Please don't drop this cake sign" AND insured it (don't know if that help but, it got there without a scratch). This cake would be shipped over night, I'll still need to get a price on that. I don't have time for a dry run since it's due by 13 April. My customer knows the risk and I'd offer a % back if it arrived damaged?
If it costs you $100 to make fondant, you should check the prices on premade. You can get 20 lbs of Satin Ice for $50.
I make my own fondant but it only costs me about $12 and takes a little under an hour to make 12 lbs.
Thanks Texas Rose, I do make my own and buy Satin Ice to mix with it because I have so much trouble getting those rich colors they have AND it's the best tasting pre-made out there to me. But I think my customer and I have come to a solution because I don't want to over charge. I'm going to send the cake, they know the risk of shipping and only charge $190 plus shipping and tax, if that goes well then I'll charge an additional $75. For fondant I found the Twisted Sisters recipe to be the easiest and less sticky.
But I think my customer and I have come to a solution because I don't want to over charge. I'm going to send the cake, they know the risk of shipping and only charge $190 plus shipping and tax, if that goes well then I'll charge an additional $75.
Is that price including shipping? If so you are basically making the cake for free.
I agree with everyone as far as pricing cakes too low. Just because you feel like your cake decorating is not up to par, is no reason to give cakes away. If your cake is from scratch its probably way better than most cakes your customer would get for "cheap". You said that your cakes were edible, if thats all they are, I'm afraid you might be in the wrong business
I agree with everyone as far as pricing cakes too low. Just because you feel like your cake decorating is not up to par, is no reason to give cakes away. If your cake is from scratch its probably way better than most cakes your customer would get for "cheap". You said that your cakes were edible, if thats all they are, I'm afraid you might be in the wrong business
Based on a calculated cost of $160 for ingredients (scratch baking) and supplies Does this really include ALL your costs? Dowels, cake boards, fondant, electric, gas, renting kitchen or % of your mortgage, parchment paper, licenses fees, insurance, etc.?
Peg and Karema, thanks for your opinions. I have a hard time believing anyone actually pays that much for cake (I sure wouldn't!), but I'll take your word for it. Quite frankly, I find that offensive. YOU are making a judgement, based on little to no knowledge, of the value of someone else's work. Not very nice.
In general about the financial advice I've seen on here: not everyone is in a position to sneer at minimum wage. From down here, it looks pretty good to me. I could be wrong, but I've never witnessed anyone sneer at minimum wage. I have seen posters caution members to verify they are making at least minimum wage.
Leah, could you explain to me why it is illegitimate to have a range of prices (corresponding to a range of skills/offerings) available to the consumer? I don't understand this. Should I charge the same price as the best decorators in town? Because my skills are not equal to theirs and anyone with the choice between a world class decorator and myself at the same price is going to choose them. But not everyone wants a world class decorator. I know when I was buying my own cake, I was perfectly happy to pay a lower price for a competently decorated and decent tasting cake. I don't think anyone would argue that you shouldn't base your prices at least in part on your skill level. I would argue that there is a minimum skill level expected of someone "selling" a cake. As such, there is a minimum acceptable price which provides you profit while not perpetuating the fallacy that customers can get high quality cake for rock bottom prices.
And considering this person was referred to me by a former customer who (I have no doubt) gave her a rave review, it's unlikely that she thinks I suck because I'm so cheap. She may not value the opinion of that customer as much as you think.
There actually are a class of people who only have so much money in their budget for the cake. Jason, you may choose not to target them as your customers for your business. Does that mean no one should cater to their needs and price range? Not everyone has to have the same business plan and target. Good thing, or we'd all be competing for the same small segment of the population. I just have to say, you sound quite hostile. No, not everyone can afford expensive cake. I can't afford many of the things I would like. That doesn't mean I can't appreciate the quality or the fact that it's worth it. Would I take advantage of someone selling a Lexus for a Kia price? ABSOLUTELY! Sadly, that dealership would not be making any profit. Eventually, they would realize this....probably too late.
I'm not "stealing" anyone's customers by targeting my services to a lower income bracket; No, but you are contributing to devalue the rest of us. Not only in your actions, but also in your attitude in this post.
AOld thread or not, the other lady was making some pretty ridiculous statements and what Delicious desserts said, really needed to be said, to refute them.
A
Original message sent by Godot
Geez. You DO, I hope, realise that this thread is more than a year old.
Ugh! *facepalm*
In usually so much more observant. I got all worked up & didn't even notice.
So disappointed that OP will probably never see this. Dang!
A
Original message sent by DeliciousDesserts
[quote name="Godot" url="/t/741295/is-this-a-reasonable-price-for-a-4-tier-wedding-cake#post_7406766"]Geez. You DO, I hope, realise that this thread is more than a year old.
Ugh! *facepalm*
In usually so much more observant. I got all worked up & didn't even notice.
So disappointed that OP will probably never see this. Dang![/quote]
Don't beat yourself up, there are 1000 people a day on this site that needed to see what you read!
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