I guess the big "am I overpriced?" question is one that always comes up in small communities. One of my mom's old coworkers emailed me for pricing info and picture examples of my work. She didn't realize it was me until I replied, and made a huge deal about it. Then after telling her to visit my website for photos and base price info, she responds with, and I quote "i was looking to order a baby shower cake but..." i knew from that statement it was her either trying to say I want a discount or your prices are too high. I still haven't responded to that e-mail. My husband told me to delete it and was like don't you dare e-mail her back. I get those types of e-mails every week. My prices are away less than the custom bakeries/gourmet shops, and are on par with what other custom bakers on island charge so i know that my prices are very fair. Now I've gotten to the point if you don't want to pay my prices, go elsewhere because I'm not discounting. I also try to educate my customers on the intricacies of custom cakes etc as well, to give them a better appreciation of the value of edible masterpieces. Morale of the story? Just stick to your guns, like the op said!

I've had that happen to me before, too. I had someone want to pay grocery store bakery prices (sheet cake at that!) for a 3 tiered fondant covered cake with fondant 3D characters all over it. And she wanted it for $40!! I told her I couldn't do it for that price and she argued that she could go and buy a cake from Wal-Mart bakery for $40. I told her to go ahead but she would be getting exactly what she paid for!!
Glad you didn't back down!

I have always been told I don't charge enough for my cakes by the people I have made them for. The second to last cake I did the lady said she pays $70 for a slab cake at her local supermarket and it's nothing special to look at and would rather pay good $$$ for my cake because it's a once off for her daughter you wont see anywhere els IYKWIM. Well due to her saying that ( as well as others ) I raised my min price of a decorated cake and I'm now getting LESS orders lol! Oh well lucky for me It's not a full time job ( just something I do on the side so to speak ).

I read "in my small town" or some variation a lot on here. Please consider this: if your market consists just of the people in a small town, your market is not big enough. I live in a small town and if I had to rely on just the residents of the town to be clients, there's no way I'd get this biz off the ground. Your target market must be larger than "the residents of my small town." Sure, you'll get biz from them and it's probably easier to get word of mouth going in a small town (whether good or bad or true or not LOL), but you must get your work out to a larger audience than just those residents. It's a good place to start, but not a great place to end if you want a sustainable business.

Just another reason why your pricing should reflect much more than "my small town won't pay more than $20."

MadameRaz, I thought about that after I posted. There are small towns and then there are isolated small towns. My son's college is in a small town with a high poverty level and the surrounding towns are equally as small and poor. The best way to market in that town, I suppose, is to sort-of market outside of the town by marketing to the parents of the college kids for birthday cakes and to market to the college itself.

If the town is so small and isolated and the income level is so low, it seems to me that the choices are to not sell at all or to sell at lower but increase the volume. You can't increase the volume much because of the number of people. You can't sell a cake for such a low amount that you make just above your costs, either. Well, you could but you'd also soon resent all that work. Selling for less money would also mean that the cakes would be simpler to make to decrease your labor, too.

I know it's a difficult situation. Are there really that many people on here who have that situation though? (Small town, isolated, low income) I have a friend who insists she cannot get more for her work. She sells mostly at her day job, where I have worked. I sold my work there for higher than she does. I know the income of those people and how they spend their money. They will pay more (i.e. the market will bear more). She did raise her price by $5 and she can still get those sales. I believe she raise them even more and be okay. I think the truth is, in her situation, that she doesn't want to charge more. Why? She would have to admit to herself that she needed to step it up. She would have to cover her boards, be more creative, and put more work into her creations. As it is now, she tells herself, "They only paid $25, what can they expect?" She is tired from working full-time and parenting, yet she desires to make cake for a living. This is the way she handles it to be able to work full-time and have a creative cake outlet on the side. I'm not blaming, I'm just explaining.

Knowing that, perhaps the challenge in a lot of these "I live in a small town" cases is that the caker needs more confidence and needs to make sure the product provided contains the elements needed for the higher price. I'm not sure of this, mind you. It's just a theory. It's possible that a lot of people on here really do live in an isolated small town with low income. On the other hand, isn't it just as possible that quite a few tell themselves that because of a lack of confidence or are in a situation where they can't possibly put more into their cake than they do now so they charge according to that feeling of not being able to put more into it?

Of course, if the market isn't there, it just isn't there. If there's no way to increase your market so you can charge enough to create a financially solid business the choice then comes down to not having a business at all or having more of a hobby business where every once in awhile you make enough to cover your costs and buy a new cake toy.

Yep, you bring up good points. I do believe that a lot of people undervalue their cakes out of self-esteem issues and the "I live in a small town" can and is used many times as a justification. LOL, just like some people with the same "cake-esteem" issues in big cities might be saying "i can't charge that much because there are 30 places to get cake in a one mile radius of me". Both cases of undervaluing may very well stem from not having the confidence in themselves to ask for what their time and talent are really worth.

Ok, so I'll stop "hijacking" this thread and just wanted to say to the OP that It's awesome that the customer went for the pricier cake after all. Your story reminds me of all the times I totally thought evil thoughts towards a potential customer and assumed I scared someone away with a price, when it turned out that they lost cell service or had to consult with the hubby or something before getting back with me to seal the deal, lol. Great job on getting the order

i live in a small town too and my motto for not being underpriced is..im saving you a trip out of town and with the way gas prices are going up..im saving you more staying right here and not wasting a trip and worse..risk of damaging your cake!

Whew! I came back because I thought surely I had worded it wrong and it sounded offensive. I'm glad to see you understood what I was trying to say.

OP: congrats on getting that order! I know I hold my breath every time I give a price.

Sorry, I posted before reading through the thread. You have some really great pointers for marketing though!

I don't even live in a small town, but just outside of Boston, where people are generally used to a higher cost of living. But because I work from home, people expect that I'll charge $20-30 for a cake. Are you kidding? You would pay $20 for a cake at the grocery store, let alone a custom cake! And I generally don't charge what I really think I'm worth, because I haven't built a name around here yet. But still, if I tell someone that the cake they want would be $50-75, they scoff at that price. Right now I am only doing cakes for friends; not really trying very hard to turn it into a business, because I have gotten so discouraged by people like this. I do cookies too, but a cookie that takes me 20 minutes to decorate people expect to pay $1 for.

Everyone expects SO much these days from a cake, but they have NO CLUE what cakes cost. They probably think that the cakes on CakeBoss and Ace of Cakes are a couple hundred dollars.

Re: Business; small town; pricing; whether a "real" business should even be contemplated or not

Warning: Opening the following link will lead you straight into "mom-finger" territory. Only the non-timid should enter!

http://cakecentral.com/modules.php?name=Forums&file=viewtopic&t=684461&postdays=0&postorder=asc&&start=30 (my post on page 3)

Indy is so right. Businesses must do a market analysis in order to get a loan. And smart business entrepreneurs do the same. But some people will take their savings, a personal loan, home equity loan, or wages from a full time job, open a business, and wing it. And they blame everyone but themselves. Some businesses simply are not viable in every location. And then add on multiple bakers selling to the same market.

Go to your Chamber of Commerce. Ask them about the income demographics of your town. That is their job. They need that info (and more) to attract industry and businesses to the area. Then you will know how many households are your potential clients. Then figure in your competition and where you TRUTHFULLY stand in the market. And don't just assume people cannot afford your product. My car payment is higher than the majority of cakes on this site. Yes, there are people (in small towns) who can drop a thousand dollars on a whim and not miss it. But if you refuse to see that and never market to the right people, they won't know you are there. And those people are in most every town. Count the professionals in your town (doctors and lawyers). Do you have private schools? A 3 acre lawn costs $150 to cut. How many big houses? Are there pool supply businesses in your town? How about pricy restaurants? Dinner can easily get to $100 per person. How many luxury cars do you see? A full size Mercedes SUV is $75,000. A good marketing plan would be to convince those people that they need your cake. Not the broke 20 year old bride who knows all about high end cakes but can't afford it and happens to call your business. You need the professional bride or the parents. And paying this much for a cake is not what the norm was in the past. People need to be educated and convinced that their wedding must have a cake from your shop.

The point is that you can wait for the right customer to find you, or you can find the right customer. It is easy once you decide to get out there and do it.

im still shocked you only charged $120 for "frank the tank" (love love love LOVE that btw!! lol) im a hobby baker, considering trying to find somewhere to lease a kitchen to start a small scale business, buuuut the cakes i have made, for friends family, etc, people have been willing -actually had the money ready- to give me $200 for a female bikini torso cake. i was kind of in shock! lol. i only ask for money to cover my ingredient costs because i cant afford to give cake away, dont feel my work is up to scratch and so need the practise as well.

so the end to my rambling is.. wow. next time.. charge alot more frank the tank!

Just ranting with you...I've been in this hobby for about 5 years now - wishing I could start a small side business. I design my cakes for family and friends only at this point. It's amazing at how little they want to pay me. Most of the time they don't even come close to covering my supplies! It's discouraging to say the least.

OMG!!! I have been reading this site on a daily basis for over a year now. NEVER have I ever been brave enough to post anything...but i just can't help myself this time!! The comment you said about throwing her a wad of fondant and saying"here have a crack!!!" WOW....I have read thru this whole thread and I am still cracking up!! SO TRUE tho. Thanks for making me smile!!

It's not just small town mentality - it seems to be the general mentality - and I blame the TV shows for not saying how much those fancy cakes are actually costing people. I've posted before about the crickets I've heard when I get custom cake requests - heck I get them for just a regular cake. I always want to turn on the snark... I do organic. I always want to say to people, "Hey, you have been to Whole Foods before, right? You do know that organic ingredients run 3 to 4 times more then non-organic, right?" The same people that'll pay 3 bucks a day for coffee. <eyeroll>.

Oh well. OP, glad you got the job though! That gives me faith

Indydebi:
Thanks for posting that! It really got me thinking. In my case, I really just do cakes for family and friends, and I consider myself a hobbyist. I have only ever sold cakes to people who approached me after seeing one of my cakes, so I am not actively trying to make this into a business (though the state I live in does license home bakers IF I ever decide to). I do not do wedding cakes, only sculpted and tiered cakes for birthday parties and other special occasions. Until I got good enough to do wedding cakes, I could not consider going into business.

BUT people do approach me after seeing my cakes at a birthday or engagement party or whatever. And when they ask me to make a cake for them, I don't want to turn them away. But the majority of the time, people balk at the idea of spending $50-75 for a child's birthday cake or $100 for an engagement party cake.

After reading your post (and the others in that thread) I have decided "To hell with 'em!" And if people ask me to make a cake I will charge what is the going rate for that cake. If they don't like it, tough. If I am going to make cakes for no profit, I might as well just keep doing it for family and friends so I can make the kind of cakes I want to make for people I love rather than stress myself out to meet someone else's needs if I am not making anything at it.

I just wanted to say "thank you all" for this post. I am too just starting my own business in my home and have been doing cakes for years either FOC or at a very discounted rate. I too did this to get my name out there but now after reading this post, I really need to grow a backbone and start charging what my cakes are worth. I currently work a 40 hour job (which may come to an end by the summertime) and many people do realize what goes into these "simple cakes". Like someone put in an earlier post, if they believe it's that easy, then here, take the fondant and have a blast! The thing that makes me laugh too, is that I see parents spending all sorts of money on things for the party, grab bags, outdoor bouncy things, renting halls or other facilities which are NOT CHEAP! (and please I am not saying they shouldn't do this, nor am I picking on anyone who does) but why wouldn't you want to pay the $$ for a beautiful cake that your going to feed your family & friends?? People think nothing of renting those bouncy things for hundreds of dollars. Like someone told me, if people want walmart cakes, then they are not your customers. Walmart/grocery stores buy frosting and cakes already made---I know, working in a grocery store bakery is where I got my start. Ok, I will stop rambling on.......but one thing before I go..... cake artist---cupcake artist---UNITE---your cakes are worth what you are pricing and much, much more!!!!!