Cake Prices-I Think I'm Under Charging And Customers Are Complaining I'm Too High. Am I?

Business By flavorfavors Updated 27 Sep 2015 , 2:27am by costumeczar

flavorfavors Cake Central Cake Decorator Profile
flavorfavors Posted 26 Sep 2015 , 12:22pm
post #1 of 11

I'm just starting out my main focus is sugar cookies, but I've gotten a lot of request for cakes. So I decide that I would offer it. Because its something I love but I'm still learning the trade so far I've only made cakes for my kids. So it makes me a little nervous but I figure I got to start somewhere.

I came up with this price list for basic designs and said more detailed cakes would be higher Rounds Double layers about 4 in high 6 in $25 buttercream w/ fondant details $35 all fondant 8 in $35 buttercream w/ fondant details $45 all fondant 10 in $45 buttercream w/ fondant details $55 all fondant 12 in $55 buttercream w/ fondant details $65 all fondant

If stacking and additional charge of $15 for 2 tiers or $20 for 3 tiers Giant Cupcake $35 Rectangle/Square Double layers about 4in high 9x9 $45 buttercream w/ fondant details $55 all fondant 1/4 sheet (9x13) $55 buttercream w/ fondant details $70 all fondant

I have a current inquire about a cake like this

I quote her $85 for a 1/4 sheet or for a 10in round $70 Am I too high?

10 replies
-K8memphis Cake Central Cake Decorator Profile
-K8memphis Posted 26 Sep 2015 , 12:39pm
post #2 of 11

you are anywhere from less than a dollar to maybe two dollars per serving -- that's often how price is determined -- on a per serving basis -- so figure out the industry standard servings per this wilton chart for each size:

and then multiply by the price you want to receive for each serving -- for me it would start at  $4 or $5 per serving -- so the 10" cake would be about $200 -and serve about 40 give or take --

it sounds like the customers who don't like your pricing are more prone to purchase grocery store cakes that are much less expensive than a cake from a custom caker who is successfully making a profit -- although there are many home cakers who also charge way too little and don't seem to realize they are not only not making any money they are losing money --

some markets are so glutted with super low priced home cakers it will not support the ones who want to do it for a reasonable profit -- 

Jinkies Cake Central Cake Decorator Profile
Jinkies Posted 26 Sep 2015 , 1:13pm
post #3 of 11

Agree w/K8.  I start @ $4/serving and I won't take an order for anything smaller than an 8in cake.

Yvette352 Cake Central Cake Decorator Profile
Yvette352 Posted 26 Sep 2015 , 2:42pm
post #4 of 11

I start my servings at $2. And if it's anything that requires gum paste or any additional product like filling or flowers I add $10 per tier which ends up being like $4 per serving 

Gingerlocks Cake Central Cake Decorator Profile
Gingerlocks Posted 26 Sep 2015 , 3:32pm
post #5 of 11

I think your pricing matrix needs to be reworked; having a flat rate per cake size does not factor in each individual cakes requirements;  you need to work out a price per serving matrix based on many things, such as: cake flavor, butter cream/ganache, fondant/no fondant,. design time etc..

Based on what you've said you are absolutely undercharging and there will ALWAYS be people who complain about the price. They are not your customers; you are creating a unique custom order product and have to charge accordingly. It's worth taking a look at where you are advertising; to make sure you are not attracting the budget shopper kinds of customers, stay away from the Facebook buy and sell pages. 

flavorfavors Cake Central Cake Decorator Profile
flavorfavors Posted 26 Sep 2015 , 3:50pm
post #6 of 11

Thank you all for your input. Im not confident yet in my skills to charge higher. I figure this way allows me to get practice making cakes and get more confidence.  And yes the only place I advertise is on those facebook pages :) but i only advertise sugar cookies. If someone ask about cakes then i discuss price. 

costumeczar Cake Central Cake Decorator Profile
costumeczar Posted 26 Sep 2015 , 4:22pm
post #7 of 11

I'm putting the finishing touches on an e-course on how to price cakes correctly in order to make a profit, and I think it's going to make some people's heads explode.

The one thing I'll add right now is that if you're selling cakes you should be confident enough in taking people;s money that you charge appropriately for the work that went into them. If you're doing what you consider to be practice cakes, do them for your family or friends and don't sell them yet.  What you're doing by selling things at a lower price is building a clientele that will expect the lower prices and who won't stay with you if you raise your prices to where they need to be so that you're earning more than minimum wage.

pastrypet Cake Central Cake Decorator Profile
pastrypet Posted 26 Sep 2015 , 4:46pm
post #8 of 11

Plus, you are dragging down the custom cake business around you by undercutting and being the cheap cake lady. Don't sell until you can get profitable prices for your cakes. And read costumeczar's post about figuring our your salary.

kakeladi Cake Central Cake Decorator Profile
kakeladi Posted 26 Sep 2015 , 8:34pm
post #9 of 11

As pastrypet mentions when someone UNDERprices the industry standard pricing it hurts us all:(  Almost all of us started with the mindset you show - I'm just starting out and need the practice - but when you start raising your prices to match your skills you will loose many, many customers who only want a CHEAP cake - they have NO idea what it actually costs to make a cake just in ingredients alone - then add your invenstment,s equipment, lessons you took etc.   At the pricing you are using now you are paying the customer to order from you!  Y ou are loosing money - not making any.  Sit down and write out *exactly* what you are paying for ALL ingredients, gas, water, box, etc, etc.  Remember to include *EVERYTHING* used.  I'm sure you will be surprised what a cake costs! 

flavorfavors Cake Central Cake Decorator Profile
flavorfavors Posted 27 Sep 2015 , 2:24am
post #10 of 11

Thank you all for your input, i will be changing my prices :)  these are some of the 1st cakes i made for my kids. I like to think ive gotten better. The mario was the very 1st cake i ever made. It tasted terrible :)5607535c43452.jpeg5607535d06e3a.jpeg5607535d8b141.jpeg

costumeczar Cake Central Cake Decorator Profile
costumeczar Posted 27 Sep 2015 , 2:26am
post #11 of 11

I just posted my class on Etsy...For that Peppa Pig cake in a 10" round I'd charge about $190 using my pricing formula, which would be somewhere around $5.50 a serving.

Plus tax ;)

*Last edited by costumeczar on 27 Sep 2015 , 2:27am

Quote by @%username% on %date%