AHi, I'm finding it hard to price cakes correctly, everyone expects them to be so cheap! How much would you expect to pay for this cake that I made? It was a 10" chocolate sponge with an 8" vanilla sponge on top! [IMG]http://cakecentral.com/content/type/61/id/3203668/width/200/height/400[/IMG]

ANot sure what I would expect to pay, but I know what I would charge.

€488 $677 £492

AReally? Because I charged £80 and they were grumbling at that!

A£80 is way too little for the amount of work involved.

There will always be people who grumble because they can't afford the cake they want! there are so many threads on the forum about pricing and customer reactions to pricing though if you want to look further into how to price properly.

When people have a budget I always make it clear that I can work to their budget no problem but they need to curb their expectations of what that money will buy them (I do it gently obviously!)

I am interested to learn more about pricing too.  I have just returned to cake making after a 15 year gap.  I used to charge £3.50 per lb but that is way off now.  Can I ask how you reached the sum of £80?  Just by looking at the picture, I would have priced it around that figure too.

AI tend to work out how much the ingredients are then work out how long it's going to take and work it out from there... But I always reeally underestimate how long everything's going to take which is where I think I'm going wrong! :)

How to price cakes.

ADefinitely follow that link and read as much as you can. Beware that a large part of what you will find is a lot of stuff about how to know the cost of your cakes. It's indeed necessary to know the cost in order to know whether it's worthwhile to bother making cake. However, price is determined by the market value of similar work. Just that alone. Period.

But it's important you learn market prices by using the right examples. Often a free standing bakery is charging in line with what you should be charging. But not necessarily. If they are using premade cakes and icing out of a bucket, then you would charge more.

It's very important to avoid using prices from people who haven't done the necessary homework and are charging too little. I'm not saying they dont effect the market, but it's everyone who sells cakes responsibility to charge appropriately. It's also possible that people not charging enough have created a situation in your area where, because prices are so deflated, there's no point in turning on the oven.

Market price is how McDonald's does it, and you may be in the UK where I order my tea from, and so that's how Fortnums and Masons does it, too. :)

When you only consider your cost and then tack on a wage, it creates a mess for anyone trying to make one's livelihood in cakes.

Once you get your prices adjusted, it may help you stick by them if you get an understanding of how it's actually rather irresponsible to charge too little. I can help with that if it's not evident to you.

It also can be helpful to understand that most of us who endeavor to sell highly decorated cake are not typically people who can afford this product and those in our social circle are not likely to be either. Therefore, you have to seek a way to identify and reach your true customer. In my experience, they tend to be the same ladies whose closets are lined with $700 shoes. Not that I'm looking in their closets :)

This may all sound like a lot of work, but it's not nearly as much as slaving away for too little pay.

ANo not everyone thinks that's too much. The people you are attracting do, and we all occasionally get someone who doesn't realize they're paying for good quality work, who expects a cheap price. Generally the lower your pricing is, the cheaper the people you attract, and a lot of them want to haggle even lower. It's just the way it goes.

That is a beautiful and well crafted cake. In US dollars it comes to $133. 

For a simply decorated buttercream cake in that size, I charge $150 (90 pounds). 

All things being equal, and by that I mean that your cake tastes great and uses high quality ingredients, at your level of expertise you should be charging more. If your clients don't want to pay more for that cake, then they need to order a less elaborate cake. 

One of my fav quotes.

~~Gretchen Price 

"What does it cost you to MAKE it? And do you work for free? Those are the questions you have to ask yourself, and feel confident in your price when telling it to your customers.

If they prefer to buy supermarket cakes instead of quality, well then there is your answer right there, don’t even bother to turn on your oven for someone like that. They will not appreciate your hard work and would never even realize the quality. I prefer the supermarket people to stay there, and the ones who know GOOD CAKE and QUALITY ingredients, come to my bakery.

ps I haven't turned my oven on since January first, lol. I have the new thermal couple, I just don't want to put it on. Taking a hiatus from baking.

If you can repost responses, I guess I will, too! After all, it's the same question.

From another thread:

Quote:

Originally Posted by Apti 
 

Welcome to CakeCentral everyone!  Since you are new to the forum, you have no way of knowing that "How to Price this Cake" is THE #1 asked question on this forum. 

 

Here is a link to a  superb article (and an excerpt from that article).   I also strongly suggest you do a forum search for pricing threads.  (There are literally 100,000's of threads and millions of posts.)

 

http://www.cakeboss.com/CakeStuff/Articles/HowMuchShouldICharge.aspx

 

"This is one of the most frequently asked questions by cake decorators when they begin to sell their cakes.  The simple but frustrating answer is that no one can tell you how much you should charge.  Setting a price structure is one of the most difficult parts of any business.  As with real estate, the price of cakes varies widely by location and is largely determined by your local market.  Finding the right price point requires research of your competitors' prices, and a solid understanding of your own costs."

 

Happy research (and baking!)

That's a great article by Kelley Masters. She and I had a few discussions on the subject of pricing. And the place where we disagree, may be that in my opinion, cake prices should vary, but not as drastically as it's commonly assumed. There's a limit to how little one can charge for cake and still make a living and a limit to what a sane person will pay. The cost of living varies across the country, but cupcakes. for example, don't tend to vary greatly. If you look up the price of  the same cupcake by a national chain, you'll see they charge about the same as they do on Rodeo drive as they do elsewhere.

 

Now I'm not saying there aren't people charging drastically different prices, but that's happening because people don't know what to charge or because they live in an area that can't support a custom cake business. I definitely have people say they'd rather have one of my cakes, but so-and-so down the road will do the same cake for half to a third of my price.

 

So here's another beware... beware of falling into the "cakes don't sell for much in my area" trap.  Maybe they don't, but if that's the case, best to stay out of the cake biz in that locale. Lamborghini doesn't put a dealership in rural areas - not enough rich people to buy those cars.

 

Please note, my comments are aimed at highly decorated custom cakes. You can sell "eating" cakes pretty much anywhere.

I am sooo glad I found this forum!  I only joined this week but I have learned so much on all sorts of things in just a few days.  I think this proves that pricing is not easy for some of us wherever you live and grateful thanks to those who have provided information from their own coffers.