Hey Fellow Decorators! 

So I'm in the works of opening up my own Cupcake/Cake business soon and was wondering if some of you can assist me with prices. 

Everything I make is from scratch including the frosting, fondant decorations (if requested) and the cake itself. I personally believe a well gourmet cupcake (one that is filled, frosted and decorated beautifully) should be at least $2.50 if not more depending on flavor/design. That's just my own opinion but I want others assistance on this and opinions as well. I do know to charge for ingredients, time and labor and kitchen costs but I'll work that into my cost analysis soon. I'd appreciate just a general idea on where to start for now.

I also plan to decorate simple buttercream textured cakes for now until I build up a bigger clientele for more custom cakes. Now my big question with this is how much should I charge? I work at a bakery here in AZ that sells our 6in, 3-layer cakes with buttercream filling and frosting at minimum for $50. The design, colors and add-ons can change that to more. Is that a good price to start at? Customers come in a buy at that price all the time so I'm just curious. A simple 8in, 3-layer can start at about $75+ here at the bakery I work at. 

So pretty much here are my questions summed up for you all: 

1. How much should a gourmet cupcake cost? Per dozen? Individually? 

2. How much for a simple buttercream cake be charged for that reasonable but also profitable?

There is SO much that goes into pricing we really can't tell you how much to charge.  Are you in the US?  What type of area do you live in? (Rural, small town, large city or high cost of living place??)  What are other bakers/bakeries nearby charging?  How much does it cost you to produce 1 or a dozen of those cupcakes?  Be sure to include every little bit you put into them....including packaging, ingredients etc.  How much is your rent, insurance, electric, gas etc per month?   All of that and more needs to be considered into pricing.  Does it cost you (just picking a figure out of the air) say $2,000 per month to operate, including all the above then you have to figure out how much business you need to generate per month to make what profit over that figure you expect.   

Tried to edit my post but don't think it worked......so here is more info.   I personally think your price of $2.50 per is probably  too low.  A good gourmet cupcake, nicely decorated probably should be at least $3.50.  I suggest you scour the internet for cupcake shops to see what they are offering in  style, taste and cost, & where they are compared to you.  Only you can tell what comes closest to what you offer.

Edit: 

As I mentioned in the beginnng of my post, my cost analysis WILL cover all those fees mentioned including: ingredients, time, building expenses, etc. I do understand that basic concept of business  

As for the $2.50/cupcake that wasn't just a quick throw out for a price. Obviously I'm not settling on that. I was aiming more for "if I priced this cupcake at that price and it was well decorated would you buy it? Would you think I'm cheating myself out?" kind of answer.  Please give input still! I'd appreciate it.

The area I live in here in AZ is a relatively medium sized town but definitely growing into a city. We have no local bakeries out here without driving 35+ min into the main cities so I guarantee I'd be a hit if everything worked out here. Obviously I wouldn't stay here if I knew it wouldn't work out  

Also a side note, I myself am a Culinary Graduate so I'm fairly well built as a cake decorator. I promise the work I give out is well worth my time and effort. 

Would I buy a cc for $2.50?  Depends on how egar I am to taste it ;)  Really, I'm not one for purchasing a cc.  I'm more interested in the icing than the cake part.  It would have to have lots of icing on it and be a flavor that was very different.  I realize that does not help you much.   Regarding the price of a cake - I still have trouble accepting that the price of our great creations has gone sooooo sky high as to be out of reach for many.  For an 8"x4" round, very conservatively, but elegantly  decorated I probably would charge around $ 60-75.     It sure would help if others would jump in on this discussion.  Have you tried searching on this site for pricing help? 

I'm not 100% why no one else is commenting but I agree! I'd really appreciate more opinions and thoughts.

To answer your question, yes I have searched on here before but I do like to start new discussion threads as times do change that way I'm not sticking to past/old thoughts and opinions. But I do however take them into consideration still. 

I do still want opinions on if a cake that is a 6in-Round (3 Layers of Cake & 2 Layers of Buttercream) is worth the price of let's just say $55 (that's about the price the bakery I work at charges.) Would anyone consider this too high? Too low? About right? Obviously I would consider in all the factors mentioned previously to get an accurate price but from a customers perspective would you consider that high/low/right? Here's a pic below for a reference of the 6in Cakes we do that are about $55-$65

it's a momentum thing -- go for the highest price you can get -- is there some reason to not get a great price? 

i wrote out a whole response previously but it wouldn't post for whatever reason --

i mean you decide if you want to be the voice of reason and the provider of affordable baked goods or if you wanna make a great profit for less work -- hello-o :)

the bakery is charging about $4 and change per serving for that 6" -- what's wrong with that -- when it comes to artwork be a monet or a pollock not a paint-by-number coloring book --

there are times i would be a customer and spend a bundle on a cake but rarely -- i would not be your typical customer -- but if you got the ball rolling and i needed a cake in your area -- i would get with the place that could ring my bell -- i would not let price interfere with my celebration kwim --

these are celebration cakes -- budgets appear when folks celebrate -- the least likely people go for the wowie cakes sometimes -- could they get a nice cake for less -- sure -- but they want to go for the gold -- this occasion means So Much to them -- provide the gold 

to sum up -- there is no "too high" if you can operate/generate/motivate at that level -- but there's definitely too low -- this is not baby bear nor mama bear work/pricing -- it's all papa bear unless you want to be ordinary -- 

you can have easy peasy cakes and whoopdedoo cakes --  

I tend to agree w/k8.  I'm not one to buy a classy cake - mainly because I can make it!  So it's hard to say.   I think the price for the 6" is fine and would consider paying that much these days.   Remember, I started in this business back when a single layer 10" round, split & filled, iced b'cream and nicely decorated was only about $25!   So maybe you can understand how I feel about the pricing these days :)