For the second time in the past two weeks I have been undercut in my pricing and lost the orders. It may be more times but these particluar clients told me who they went with. It is getting frustrated because the person undercutting me bakes out of home. Sure the price is lower there is no overhead and it is illegal!! I dont think $2.50 per jumbo cupcake with fondant accents, SMBC, set up and delivery is too much??? I did things the right way, got my license, rent the kitchen, spend advertising money all to lose orders to someone who doing it the wrong way. Sorry for the vent, but it just burns me... How would you handle this?

I would nto hesitate to tell your customers that the lady who has the lower price is baking illegally!! Tell her that in your state you are not allowed to bake out of your home, you must have a liscense, etc... I also would nto hesitate to send those 2 people that were mentioned a little email saying what they are doing is illegal. Those home bakers may not know what they are doign is wrong!

The problem is that a lot of customers will turn a blind eye to the fact that its an illegal operation because the bank balance is really their main priority and won't be overly concerned about them being unlicensed. I suppose you report the other baker to the authorities????

Yep...as there is no law against buying from an unliscensed baker (well none that I have heard of anyway) I doubt most people really care. All that matters is that they are getting a better price. Thus I doubt sending a letter to the client will do much of anything.

I feel your frustration - It costs a lot to have a legal bakery/kitchen, insurance, overhead, etc. Are you a member of RBA? If so, you could contact them. Otherwise, you could call the health dept. yourself. Unfortunately, the previous poster is right in saying that customers just want a good deal, don't really care about legalities.

Your prices are certainly not to high, so don't lower them.

thanks all. I guess taking the higher road is my only option. I dont know how someone can bake illegally. I would be scared to do it from a liability stand point. It is food , and people now a days are quick to sue over anything. You all are right, the pocketbook is the bottom line. I am not going to work for nothing.

Don't bad mouth to her (formerly yours) clients. Just quietly place a call to the health department and rat her out. If that doesn't get you anywhere, raise hell until she and anyone else doing it that is taking money from you are closed for good. Go the mattresses.

When you are in business and have competition it really is extra difficult when you don't have a level playing field..........unfortunately that is the case with many a small business............and if some other business is not under cutting you the government wants their piece of the action as well..I was going to say their piece of the pie but stopped myself....well almost....you have to wonder if where they are getting the cake is going to taste good and look good........I have seen some pics on the web where people say its there first wedding cake, and I could cry for the bride..........how could they do that to someone ugh..........taking the high road is not going to level the playing field though....if the shoe were on the other foot....would they report you?

If her clients don't care about the illegal aspect of her baking, maybe they'll care that she's baking with no inspection or approval from the health department - but then again what's a little roach poo and cat hair among friends???

If yor health dept doesn't respond, call the state tax dept in your town. They have field reps just for this. I have said this before...I also have my contractors license and those guys report unlicensed contractors immediately. Business is business. Protect yours.

I don't know about clients not caring. I'm sure some don't, but not all.

Our neighbor offered us a "deal" to put in a leech bed. We would have to pull all the permits and such. He was not insured for the work and did not have a business doing that kind of work. We went with an official company because we wanted to be covered in case something happened. It cost us more but it was worth the peace of mind.

Her: We decided to go with blah blah.

You: Oh yes, I've heard of her. thanks for letting me know so I can release that date to other inquiries. Now .... you HAVE checked with your reception site to see if their insurance and their policies permit unlicensed food vendors, haven't you? I'd hate for you to not have a wedding cake because yours was stopped at the door for being an illegal baker. Be sure you check that out!

If the customer is aware that the business is not licensed and makes the decision to still purchase from this person that's their decision. To turn someone in because you don't like the way they are running their business and you are losing business to this person is wrong. Don't your remember in school people don't like tattle tales. I agree that what she is doing is wrong that's why I only make freebie cakes for my family and friends and co workers who purchase all of the ingredients. I just enjoy learning new techniques and adding pictures to my photo's. Someday the legal system will catch up to her but it shouldn't be by you. Now if she is advertising that she is licensed and legal then that is wrong.

Ok, I was just sitting here reading this post.. I have different feelings on this... Just hear me out before you put my head on the chopping block...Is she advertising that she is a bakery? If so she needs to be turned in... because she is not. If she is not adver. then may be these people with to her and she decided to do it because she needed the extra money..we as cc people do not know what her situation is or was and or what it will be . I'm just saying before I jumped the gun I would try and find out more about the situations. Maybe she is trying to feed her family and pay her bills just like everyone else. Don't get me wrong I think everyone should do it the right way but sometimes we must stop and looking at things before we throw people to the wolves. I'm just saying...

We are all working to feed our families. For those who have never gone through the process of becoming licensed, I don't think there is an understanding of how difficult and expensive the process can be. Some states are easier than others, but I have the same requirements as an Applebee's opening. I don't care if someone sells to their co-workers, neighbors, and friends. They are probably buying the cake because they like someone's recipe or decorating style. They were never someone else's customers. But when they start branching out to strangers, they are competition. I am between two states and the safety requirements are extensive. Before you judge those of us who are licensed too harshly, look up the page and pages of requirements for licensure and maybe give us a break. There are many ways to earn extra money. It doesn't have to be in a field that requires a license meant to keep the public safe.

I am a small business owner, (horse boarding stable) so yes I am very aware of the cost of doing business so don't eat me alive over this post. I have a good friend that takes in horses in their back yard and yes they charge less then and do, and yes I have had people choose her yard over my facility. But you know what, I NEVER would wish her any harm by turning her in. The owner that choose her simply only care about the dollars, not the service. That is not the clients I want. She enjoys the few horses she keeps and I can relate to the joy of it, and I am happy that joy can be shared. I can advertise, hire help, and my clients appreciate that my experience is worth the extra fees, if they do not they are not looking for what I offer and therefore they go elsewhere. Case closed. Why all the drama?? I can relate to the OP pain, but instead of focusing on the other baker, focus on your business plan, focus on educating people the difference between a professional baker, and a hobby baker. Some people will choose a hobby baker just for the cost, they may choose Walmart, or maybe Aunt Bessie May, but be OK with that. Since you are a "legal business" there are so many tools for you to use to develop your business. Use them!!

First of all I wasn't judging anyone, all I was saying people can stand on both sides of the street. Who are you or I to say this lady took custermers? Maybe they like the ladies work? I give you licensed people all the credit in the world, but you have know idea what I know about the process! My point was, there are 2 side to a story, the licensed ladies side and the hobby bakers side and you nor I know why the customer went to the hobby baker! she may not have charged anything except for the cost to make the cake. All I am saying is we all must becare not to Judge!

Isn't it quite a coincidence that two people who are "friends" with the unlicensed baker are shopping cakes in that short time frame. The OP is frustrated. There are two opinions concerning unlicensed bakers, but there is only one law. The OP can choose to ignore the baker, or she has the right to do something about it. This is a recession and maybe they live in an area where it is critical for her business survival to have a level playing field. Home bakers are not my competition personally. And by the way, I wasn't paying attention to any one post... just saying how I feel.

Hey you know what, the more work you do, the more that will happen to. Sometimes when the volume is smaller, it hurts more, but when the volume is bigger it still happens. It's just your livelihood doesn't feel directly attacked.

I personally would do what Debi said, make sure they know what goes with it. I really like working with one venue here in particular and I knew there was a rash of unlicensed people making cakes, so I talked to the manager and now they require licensing stuff to let the cake come in... Didn't turn in the unlicensed bakers, just made sure to cut them off at the door.

But you should just keep working to better yourself and be the best in your area and the people who you want as clients will come to you because of the quality of your work.

I am now in the process of opening a small cake shop. I will be the only licensed, inspected shop in the whole county that I live in. There are a few other people in this county that bake from home and do an awesome job with their cakes. The laws here, say that it's ok for them to bake an occasional cake, (what is the definition of occaional? It's not very clear.) however they can not advertise, etc. With that being said, this is a very small town. Just about everyone is related in some way or another. I feel that if I try to turn them in for advertising on facebook or where ever, that it will just turn around to bite me in the butt. Like I tell my kids, always remember that what you do will affect you someway or another. It may have a positive affect, or it may have a negative affect on you and your business. I choose to go ahead and do what I know is the legal and the right thing. I want to be able to advertise, hire help etc. I don't want to be know as someone that is causing others problems. I may very well view things alot differently a little later on, but hey, I'm a woman and it's my perogative to change my mind. LOL
This is just my opinion, and just like ears, everyone has a couple of their own.

Indydebbi you said it so well. I think this is the type of comments that potential clients need to hear if they are going to understand the difference between the hobby baker and the professional baker. Got anymore to help!!

I think it's ok to inform a customer that a bake is not licensed and let them make the decision from there. But to go out of your way to turn someone in is outrageous. If these people are going to this person knowing that they are not licensed and still want to purchase a cake from them who are you to try and tell them otherwise. Making it so this person cannot make cakes by getting them in trouble will make you look bad in the long run it people ever find out that you ratted her out. I understand that times are hard and the lengths that you go through to be legal but to personally be the one to harm someone and get them in trouble is wrong. I know everyone has their own opinion on this matter and that's the wonderful thing about freedom of speech. No matter how many people you turn in there is always going to be another unlicensed baker. There are people that are willing to pay the cost for an exceptional cake and then there are people that are trying to save some money. As someone else posted we don't know the whole story. They could have been referred to her by a previous customer that was happy with her work. Advertise get your name out there. Send out fliers in the neighborhood. If it's really bothering you call the lady and let her know that she is not legal and the steps that she needs to take. This way you are informing her that you know and giving her a chance to make things right. Do it the professional way not the dirty way.

I don't understand people who say " well maybe she is doing this to feed her kids" Are you kidding? It is a crime, both state and federal (why federal, because they are not paying taxes on their cake income). So, based on the previous posts, if I need to feed my kids, I can go out and rob the local supermarket?? No, a crime is a crime, no matter the reason. What the op decides to do about reporting her is her decision but for those who excuse it, that is wrong. If you see a crime being committed, you have a moral (not a legal) obligation to report it.

Okay- I am probably going to get blasted, but this topic takes me back to a point I ALWAYS bite my tongue on. Just to stop the speculation, I WAS a LLC business homebaker in a state with a cottage law, so I know the process. I quit for now because of an illness in the family.(Seems like we all need disclaimers now a days before we post)

I am an artist (literally) and from the time I was in grade school, I have been called that by myself and others. I have a Bachelor of fine arts from a highly accredited state university. I have taken classes, spent money perfecting my art(in all mediums for years from fine oil paint, to frosting). I have a natural eye for detail, color, etc. I have honed technique and can free hand just about anything. I say this because I think there is a real line between those people who have been taught cake decorating(and they are really good at what they do, but DESPITE learning how to do cake techniques, some of them are NEVER going to be the same caliber artist as that person with the natural in-bred talent). These are the people that will free hand cut scrolls and adornments not just be limited by cookie cutters or stamps.

In all my classes, we were critiqued(real critiques, not just hey thats fantastic, but good, color is a little bit off, arrangement or layout is not focused enough, ideas are good but needs cleaner edges next time). Constructive and helpful perfecting my art to hear the truth. I have cakes in my gallery from early on when I had never used fondant before, they have bulges, were not exactly how I wanted. So please dont go into my gallery and tell me everything that is wrong, trust me I look at my stuff and see more flaws than most of you will. Next time I make it, I will work on those and it still wont be as good as whats in my head. It hurts sometimes to hear someone poke at something you love and have poured your heart in to, but that is also how you grow. When the criticisms are done correctly and in the right manner. I also understand new bakers being excited about their work and no one wanting to make them feel bad, but when people ask for opinions it drives me bonkers when its all love and light and the cake is off center, weak color, finger prints, smudges, etc. I have seen when a few posters give honest critiques(usually in a nice way) and they get creamed (like I am preparing to be).

So to the POINT(FINALLY): I have heard so many licensed bakers make the assumption home bakers have stolen their clients based solely on PRICE undercutting. Perhaps in some cases and with some bakers, that is true(clients told you point blank that is the case. If so, once again- those clients were probably not YOUR clients to begin with.). The OP's post didn't really quite say the clients told them it was because of price, alluded that they said that, but didn't explicitly say they said that.

Some of those poached clients might simply have went another way because of the art aesthetic. I have seen plenty of cakes on here that are good, great technique, from professional bakers but then seen the same cake (style)done by someone else(maybe not a licensed baker, maybe a home baker) and there is that IT factor that says THIS was created by that natural artist.

Example- Buddy V.(our beloved Cake boss from Carloss bakery) is clearly a talented guy for what he does. But there are other cake makers out there that ARE far more artistically inclined (Ron Ben Israel, our own Rylans cakes, Mary Maher not Brenda(Brenda is good BUT she is Not her sister- that natural in born thing versus taught thing), Lauri Ditunno(not my design aesthetic but an artist). So maybe folks, sometimes its not just PRICE. And even if a client tells you that, it could also be that THEY dont want to hurt YOUR feelings by telling you that other baker was simply design wise, BETTER.

Off soap box.

CookiesbymomME - Well put!! I agree with you.