Cake Pricing

Business By Knforsyth88 Updated 5 Apr 2016 , 10:27am by cakebaby2

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Knforsyth88 Posted 30 Mar 2016 , 5:42am
post #1 of 13

Hi, I am making cakes from home and I need help with the pricing. I've done some research and most people are charging $2-$4 per serving with or without fondant. I know you charge more for details and all that. It is costing me about $25-30 to do a 2 tier (8" & 10") fondant covered cake with homemade icing and Duncan Hines cake mixes and the decorations are handmade. I charge $60-$70 for my 2 tier cakes. I just think that $3-$4 a serving is a bit if the cake was absolutely flawless and amazing I could see paying that. I'm also doing a 3d lightening Mcqueen cars cake in a few weeks to feed about 20-24. I charged $ that a fair price? I really want my customers to be able to afford a nice cake and I also want to make a descent profit also. Any feedback will be great.

12 replies
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joeyww12000 Posted 30 Mar 2016 , 9:33am
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I'm just starting out as well. Prices vary in my area from $3.95-$6.00 per serving depending on the type of cake. I set my prices at $3.50 to $4.50 to fall in the middle and I add for swiss meringue buttercream, fondant, and decorations. All that adds up to time! I always underestimate my time....Almost every cake I make basically takes a full day by the time Im completely done.

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julia1812 Posted 30 Mar 2016 , 12:36pm
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It depends on where you live how much you can and want to charge. But 40$ for a 3d mcqueen cake? Seriously that's way way way to low! I understand you want to charge according to your skill level (don't know how good and FAST you are) but do yourself a favour and pay yourself at least a minimum wage. Otherwise you'll burn out in no time. 

I don't charge per serving, I add up ALL my cost -all of them! - and then add my hourly wage and profit.

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costumeczar Posted 30 Mar 2016 , 12:41pm
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Quote by @Knforsyth88 on 6 hours ago

 I really want my customers to be able to afford a nice cake and I also want to make a descent profit also. Any feedback will be great.

First, NEVER base your prices on what you think your customer wants to pay, because they always want to pay as little as possible. To make a decent profit (which should be the goal in setting your prices) you need to figure out ALL of your costs including materials, annual expenses like insurance and licensing fees, cost of gas to deliver and shop, etc etc. Add those to the cost of your time (how much you want to make an hour=wages) and add in your profit, which is NOT the same as the cost of your time. Profit goes back into your business, your wages are your wages. If you figure all of this out, and it does take time to do it, you'll have an idea about how much you need to charge per serving or per cake. It's important to know what your market can bear price-wise, but more for deciding whether it's even worth having a cake business at all. If you need to charge $6 a serving to make a decent wage+profit, and everyone in your area is selling cakes on Craigslist for $1.50 a serving, you might need to find a different business to be in.

You should also ignore all "go for your dreams" and "you got this" advice, since those are not helpful in the long run.

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kakeladi Posted 30 Mar 2016 , 4:55pm
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Do you want to become know as the WalMart/Dollar Tree cake lady or the Macy's or the high class Rodale Dr.  (Hollywood) cake lady?   Wouldn't you rather become known for high class, speciality designs that taste super rather than what could be easily done by some place like Walmart?  You get what you pay for.  As the other poster said, *never* base your prices on what you think someone will pay for them.  

On another level, what's your home life like?  Little tots running around or single, and working full time or somewhere in between?  How much work do you want to put into making cakes?  Wouldn't you rather bake one or two cakes a month or week and make $500 than be baking/working all week and missing out on your family's affairs, all for nothing more than trading $$?  (Only getting back what you spent to make or *even less*)  Take the time to really think about this.  As has been said, otherwise you will end up burning out and hating how much you missed of your kids little lives and *they* will not be happy either.

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LelekBolek Posted 30 Mar 2016 , 5:22pm
post #6 of 13

What costumeczar said.

I also think you are undercharging. A 2-tier cake for $60-70 for 8' and 10" (I am assuming at least 2 cake layers+filling), or a $40 for a 3D car cake sound very low.  

People can afford nice cakes at different prices, and depending on their definition and expectation of "nice". You should remember that you are not a grocery store, therefore, you cannot sell at grocery store prices. 

You can buy a single dessert at McDonalds for $1-$2, but if you go to a finer restaurant, your one-serving dessert will easily be around $4 and up. Unless you are a huge junk&fast food manufacturer, I can't see you being able to charge as low, and still be compensated for the efforts put into a custom cake. 

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Knforsyth88 Posted 31 Mar 2016 , 2:42pm
post #7 of 13

Thank you for all of the help. I'm not very fast a decorating yet, but I do put a lot of work into my cakes. I try to split my work up into 3 days. 1 day ill bake and freeze, next day ill make the icing and decorations and the 3rd day I'll put everything together. Please check them out and let me know what y'all think about them. What would you charge for a 3d cars cake? I spent $20 to make it.. I am going to charge more. Everyone always has new cake ideas for me to make by hand and I'm getting pretty good at it. 

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Jinkies Posted 31 Mar 2016 , 4:50pm
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Just think about this.  You will work on the car cake for 3 days and make $20 over your costs (I'm assuming that's just the costs of ingredients too).  You could work at McDonalds for 3 hours and make more than that.

Took a peek at your pics and you do nice work.  You are WAY undercharging, girlfriend...

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carolinecakes Posted 31 Mar 2016 , 6:28pm
post #9 of 13

In my neck of the woods 3D CAKES start at $100.00, that price goes up depending on the design. I bake for friends and family, purely a hobby. I get that you may lack confidence in your abilities, but I saw your pics, very nice work. When people ask me how much I would charge for so and so cake, I chuckle while I say " honey you couldn't afford me if I did this for a living". Seriously I couldn't afford to buy the cakes I make from someone else, hence the reason I make them.  That and I need a creative outlet to keep my sanity....

You spent $20.00 to make the  3D cars cake......that's what the ingredients cost. Then you factor in all the things costumeczar mentioned, into your price.  Just because you are still " learning " your craft, doesn't mean you have to give away your cakes, and at your prices, that's  what you're doing. Your time and effort is worth much more. IMHO

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costumeczar Posted 31 Mar 2016 , 7:38pm
post #10 of 13

For 3D cakes the cost of your ingredients is the least of your worries. I didn't even look at the picture because it doesn't matter, if it takes you three days you need to be charging for your time for that and ignoring the $20 as an incidental expense. If you worked for 8 hours on a cake (just as an example) then you'd charge for 8 hours of your time, whatever that's worth. My daughter works at Kroger as a cashier and earns $9.25 an hour, and there are places in the US where the minimum wage for someone saying "would you like fries with that" is $15 an hour. 

Let's use that $15 an hour as an example...If you put in 8 hours on a cake, that would be $120 for your time alone. Plus if you want any profit on it you need to add that in, so give yourself a whopping $20 profit for argument's sake. Then you have overhead and material costs, which based on my personal averages would be about $120 based on what the wages were for that cake. (That's my personal expenses so yours might be different, but this is all theoretical. ) 

Based on all that, I'd be charging $260 for that cake that you charged $40 for. And let's bump that us a little because I charge more than $15 an hour. 

And if you figured it out, you probably made about $3 an hour for that cake, and that isn't good. Please figure out your costs before you throw out a price again, because people will be happy to pay you $3 an hour unless you start charging the right price.

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LelekBolek Posted 31 Mar 2016 , 7:40pm
post #11 of 13

If you are looking for a specific number of dollars as an answer to "what shall I charge for this work", I doubt you will get here. Not because we are mean or stubborn :-), but because each case is individual, and is in hands of the artist who created the work. People responded with very good advice and tools for you to work with, to estimate and price your work, including profit, etc. 

It isn't an easy thing, to price a cake, and you should learn it as well as the decorating, to sell your work for a good and fair price. 

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Knforsyth88 Posted 1 Apr 2016 , 5:01am
post #12 of 13

Thank you for the advice and thank you for checking out my art pieces. I will definitely be bumping up my prices!

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cakebaby2 Posted 5 Apr 2016 , 10:27am
post #13 of 13

A 3D Lightening McQueen cake from a copyright license holder in the UK  would be at least £100.00 (GBP)

Don't know what that is in dollars. One of our local "cakeladies" recently did one under the table and she charged £65.00 for it...and it was a scratch baked cake.

She posted it on her FB page and I have to say it looked very professional.

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