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How much do people think a cake costs to make??? - Page 18  

post #256 of 412
Quote:
Originally Posted by Stitches View Post

From Wikipedia: In business and economics, predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. The predatory merchant then has fewer competitors or is even a de facto monopoly.


Haha - exactly. Except these are non businesses and they are doing it mindlessly. As I said, I'd have more respect for them if they knew what they were doing.  But instead, at least from what I've seen, they deny it and claim their little "business" doesn't have an effect on the market. That would be true if it were just one person's little cake business, but it's a whole lot of little businesses that collectively have a big impact.

post #257 of 412
Quote:
Originally Posted by jason_kraft View Post

While the end result might be the same as predatory pricing, the missing piece of the equation here is the intent. IMO the culprit is usually either not realizing the impact severe underpricing has on the market or just ignorance of basic business tenets themselves.

The example of store brands or generics undercutting name brand products is a different story. Since the manufacturers of store brands and generics do not have to pay as much for advertising and marketing, they simply pass the savings on to the consumer while still making a profit for themselves. This type of undercutting is based on lowering your costs and is completely legit. If the store brands and generics are successful, it means your product has become commoditized (at least in that channel) and it's on you to either rebuild your product differentiation or abandon the channel

The "intent"/ culprit of not realizing the impact is no longer an excuse when you come to this website and everyone explains to the people whom under price what the effect is on the whole market. When they continue their practices it's no longer ignorance, it selfishness.

 

My example of two store brands (Whole Foods & Trader Joes) undercutting name brand products was not the conclusion I meant you to reach. Wholefoods doesn't really undercut the prices of the name brand products.........it's a bait and switch in a way the customer doesn't even realize they aren't buying the name brand anymore. Similar packaging in the same shelf placement of the name brand. They break your loyalty to the name brand product. Which is fine until you discover that it's an inferior product and the consumer thinks the name brand product isn't so good anymore. Not so fair to the name brand product. They'd have been better served to have never done business with that retailer and protected their product quality and customers loyalty.

post #258 of 412
Quote:
Originally Posted by scrumdiddlycakes View Post


Brilliant. You need to embroider that on pillows or something icon_smile.gif

Since I only sew as a hobby, I'll probably only charge for materials. Got to keep it affordable and all that. And I do enjoy it.

*ducks to avoid all objects being thrown my way*
elsewhere.
elsewhere.
post #259 of 412
I just downloaded the Cakeulator app and realized I had only been making a $20 profit on a two tiered fondant covered (with fondant decorations) cake that I would spend hours on. It also helped me decide on a price for a three tiered wedding cake I'm doing next week. I was afraid to send the quote to the lady, but she was fine with it thank goodness!
post #260 of 412

I am thinking that if the cake shows, would actually show the cost most people would be shocked, I would also like to see a clock running in the back ground on a cake they are making so that people could see how long it really takes to make a cake,they couldn't, wouldn't have to show each step, no show would do that, but they could have the clock start when the work on the cake began, with the actual making of the cake, time in the oven, then the time it takes to set it up, dirty frost, frost, and then the decorations.  I would bet that most people have no idea of  how long it takes to make a gum paste rose, and other flowers or decorations,  the time for each step.  The cake shows have many people working on different parts of a cake where as the home baker, does each step his or her self, and they all take time, some a lot of time.

 

I would hope they would appreciate it a lot more the time their favorite baker spends on their cakes if they actually knew the time it takes

post #261 of 412
Quote:
Originally Posted by jdecock View Post

I just downloaded the Cakeulator app and realized I had only been making a $20 profit on a two tiered fondant covered (with fondant decorations) cake that I would spend hours on. It also helped me decide on a price for a three tiered wedding cake I'm doing next week. I was afraid to send the quote to the lady, but she was fine with it thank goodness!


I love this app, but I will tell you that when you set up the "Profit %" under options, you are actually entering a "markup", not calculating "profit margin".  If you want a 50% profit margin, you need to enter 100 in the Profit % area.  I think the developers are from the UK, and they use different terms than we do in the US.  But I love the app - you can add in your time, with different amounts for different tasks, plus all your ingredients, down to salt and vanilla, and get an optimal selling price based on what you enter in the profit option.

 

Liz

Follow me on my Twitter handle: @Sugar_Iowa

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Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

post #262 of 412
Quote:
Originally Posted by kikiandkyle View Post


Since I only sew as a hobby, I'll probably only charge for materials. Got to keep it affordable and all that. And I do enjoy it.

*ducks to avoid all objects being thrown my way*

icon_lol.gif OH, well as long as you enjoy it, it's all good! icon_lol.gif

Before you ask- I'm licensed, inspected, insured, and all that jazz.
Before you ask- I'm licensed, inspected, insured, and all that jazz.
post #263 of 412
Dude, sell yourself! My minimum is $150 and that gets you a 2-tiered cake that serves 30 MAX! So, an average 3-tiered cake (6-9-12) is about $500. Ain't no way in hades am I doing a 3-tiered cake for $175! I'm not the cheapest, but I'm not the most expensive. Sell yourself!
post #264 of 412

Thank you , i am looking into the cake boss software... looks AWESOME! Yes people think i charge to little & I should charge more... I quit my job of 15 years to do cakes...& Most of the time people think a 3 tier cake with fondant work for $100.-$150 is to expensive, but they dont see the time you have into that . Most companies , grocery stores, & big companies, all have frozen cakes & not fresh baked & their icing is out of a bucket thats been which is been sitting there how long...You want Good quality you pay.. you want frozen dried out greasy icing... you get it cheap.  I love making people happy, but I cant eat the cost!icon_biggrin.gif

post #265 of 412
What I notice in many of these threads is people saying "well I am just starting out so I don't charge as much"

Either your product is good enough to sell or it isn't!

Would you let the Dr do your surgery for $65 because he is just starting out?

Would you take your car to get the brakes fixed to the guy that doesn't charge much because he just isn't as good ?

What other business does this.
either charge a decent price or don't sell your services..

Just my 2 cents worth as a new guy to the forum
post #266 of 412
Quote:
Originally Posted by Okiecowboy View Post

What I notice in many of these threads is people saying "well I am just starting out so I don't charge as much"

Either your product is good enough to sell or it isn't!

Would you let the Dr do your surgery for $65 because he is just starting out?

Would you take your car to get the brakes fixed to the guy that doesn't charge much because he just isn't as good ?

What other business does this.

This attitude is actually pretty common in many industries, provided you aren't taking your life into your hands by cutting corners on the price.

Especially when barriers to entry are lower: you have more people entering the marketplace without doing their due diligence on the business side (not just pricing). Cottage food laws can contribute to this because they don't require any kind of business training.
post #267 of 412
Quote:
Originally Posted by Okiecowboy View Post

What I notice in many of these threads is people saying "well I am just starting out so I don't charge as much"

Either your product is good enough to sell or it isn't!

Would you let the Dr do your surgery for $65 because he is just starting out?

Would you take your car to get the brakes fixed to the guy that doesn't charge much because he just isn't as good ?

What other business does this.
either charge a decent price or don't sell your services..

Just my 2 cents worth as a new guy to the forum

Welcome!!! I like you already!

Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
post #268 of 412
Quote:
Originally Posted by Okiecowboy View Post

What I notice in many of these threads is people saying "well I am just starting out so I don't charge as much"

Either your product is good enough to sell or it isn't!

Would you let the Dr do your surgery for $65 because he is just starting out?

Would you take your car to get the brakes fixed to the guy that doesn't charge much because he just isn't as good ?

What other business does this.
either charge a decent price or don't sell your services..

Just my 2 cents worth as a new guy to the forum

Well, everyone has to start somewhere, and the fact of the matter is, I'm just not as good or experienced as many on this website.  Seriously, I drool with envy at most of the cakes I see.  I will be excellent eventually, though, and people still order my cakes and love them, even knowing I'm new.  I'm not cheap, but I'm not expensive either.  Why give away $$ just because you are learning?    Also, not charging as much is not the same as completely undercutting.  

The mechanic in my hometown, (also where most of my cake business is to be had), started out in someone else's garage charging very little.  He fixed cars, worked hard, was honest.  He was new and didn't have experience, but he was less expensive than the other mechanics.  Now, he's a multi-millionaire and still works on every car in town that's out of warranty...still doesn't charge nearly as much as the dealerships for service, yet is, like I said, a multi-millionaire.   Oh well...maybe he would be a multi-billionaire if he rooked people...LOL

post #269 of 412
:-(Yikes! I am just now taking my love for baking into baking for friends and family for cost. I have done a lot of research on pricing and am aware of the local costs where I live. Before ever selling a cake, I plan to make certain that I am not cutting myself or the cake baking/decorating business short. I realize even if I only do this as a hobby, I have to treat it like a business, because if I'm getting paid, it is.
post #270 of 412
Quote:
Originally Posted by bobwonderbuns View Post

I just had that yesterday, I quoted my normal price, then gave her a bit of a discount and suddenly I'm alone listening to the crickets... icon_rolleyes.gif

I hate the crickets! I get them all the time icon_smile.gif
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