I am a home baker and set my prices based on ingredients and time. I have a big matrix I used. I was at $3 per slice for BC and $4 for fondant that included some decorating included and i used Earlenes chart as I mainly do party cakes and found that to be more accurate.
So for example a 6" and 8" that feeds about 25 with bottom in BC and top in fondant I would charge $90 for.
Well I have been slow to fill up and I recently found out that similar cakes are going for $60 among other home based baking businesses.
Now I am stumped. Maybe I am a slow decorator but based on my pricing matrix that would be TIGHT.
But then again, I know people who have received a quote from me are going to these other bakers because I see the cakes they asked me to quote being made on these other peoples facebook pages.
What would you do? Would you lower to match their prices and get more bookings or stay higher with no real reason why. There cakes are just as pretty.
Help please I am feeling super discouraged.
Hi! I too am I home baker and have the same troubles. What I've learned though is to not cheat yourself! If you do lower the price I would only go $75.
Hi. I am also home baker. Price depende on ingrediens, size, but mostly on time and effort that you put in it. Also depende if you relly need that money, then I guess, you will sell it litlle under price. I bake more for hoby and collect money for that, so… .I put my price, no matter what other think. I advice you to do the same. Put your price and wait for a customer. Never forget that our cakes is art.
Don't compete with things like facebook. It's a short race to the bottom. If you bake from scratch and others don't, that's a selling point. What is different about your product from theirs? The differences are selling points. Word will get around quick if you compete with the cheap cakers/undercutters. They may also be using a different serving chart which gives them more servings hence a cheaper per-slice price. Don't play bidding wars, that's the quickest route to the bottom. For example, I paid about $100 for an 10" buttercream (might have been an 8", was last year) with some fondant details. Just goes to show you it depends on your area and who your target market is.
This is a two-part response...First, do NOT lower your prices based on a couple of undercutters. There's a lot more that you need to take into account, but if you'll be making less than minimum wage if you lower prices then what's the point? If you've worked out your pricing and it's right for you, then that's what you need to stick to. If you feel like you have to adjust your pricing to be competitive, you can either work faster or cut your costs, but I don't recommend dropping prices without those adjustments.
The pragmatic truth, though, is that the sheer number of home-based cake businesses that aren't being run like businesses are driving prices down. People think that making "a little money on the side" is great, but if they're basically selling cakes as a hobby and not paying attention to their overhead and other costs, it's going to affect your local market by driving prices down. YOU might think that if you present your cakes as art then people will come for them, but that isn't necessarily true. You might end up sitting there with no orders if the undercutters have trained the people in your area to expect a custom cake for a grocery-store price.
You might have to find another niche that isn't being served in your area. You could offer things that other people don't offer, like cake pops or other small desserts. You might have to branch out if your market is saturated, because once people are trained to pay low prices they won't pay the higher ones unless you offer a really good reason to.