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Holy Guacomole! Your prices are high!

post #1 of 34
10/9/11 at 2:43pm
Thread Starter 
We have spent months and months preparing, costing out ingredients, time, rent, utilities . . testing and resetting products . . . refining old favorites. Ensuring that every item is made from high quality good ingredients, which, however drives up our cost to make.

On October 25th, we open our doors. I want to ensure that our prices are set right from day one. I don't want to jack up prices 3 months out of the gate, nor do I want to lower my prices because I came in too high.

The area market is at about $2.50 for an average cupcake. (I say average because I don't find any that I particularly would write home about . . all taste like box mix, imitation flavorings, and crisco frosting).

I want to charge $2.75 per cupcake, and $2.50 if you buy 6 or more (as it saves me on boxing, packaging . . etc. As I do all of our boxes up really nice).

Am I signing a death warrant by asking $2.75?

More info: We are working inside a high end chocolate shoppe that has a client base whom already expect to pay a higher price for a higher quality. But . . is $2.75 overkill?

I am trying to ensure that I make a decent wage, and some profit . . at $2.50, I am still able to get by . . but I begin to wonder why am I in the business, if it's just getting by.

Thoughts?
The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
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The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
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post #2 of 34
10/9/11 at 3:05pm
My first question is where are you located? I have been traveling for the last year and have bought cupcakes in at least 15 different states and never found a cupcake that I paid less than $4 for.

I want to come buy your cupcakes. icon_biggrin.gif

Taking your location into the scenario is a big thing though. If cupcakes are not appreciated in your area you may have a hard time selling them at that price but if people begin to realize they are far superior to other shops you may do very well.

In Seattle, WA cupcakes are like $6. In Maine they were $6. In Florida I can find them for $5. I have found a serious lack of good cupcakes in a lot of areas though.

Good luck with your shop! Maybe I will make it in to try yours someday!
Leslie
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post #3 of 34
10/9/11 at 3:06pm
Double Post
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post #4 of 34
10/9/11 at 3:06pm
First, Congratulation, and best of luck. Second, I don't own a shop, so what I say is purely from observation.

It seems to me that if you are opening in a high end shoppe, you are already showing you are high end quality. But this is your opportunity to "sell" your customers. Educate them on what it means to use the best quality and once they taste the difference, I'm sure they'll see $2.75 as no obstacle. Plus, if you are lowing your price to $2.50 for 6, I'd be buying the 6 rather regularly, especially if that then matches everyone else prices. I don't personally think the extra 25 cents will break the deal, but be sure to eduate your customers, even in casual conversation. Welcome to our shop. We use only the best ingredients in our cupcake, which we're sure you'll notice as soon as you bite into one. Something like that. Just casual, but more detailed for those people who do ask why your prices are higher. "Better ingredients cost more, but it shows when in the flavor."
"Be kinder than necessary, for everyone you meet is fighting some kind of battle."
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"Be kinder than necessary, for everyone you meet is fighting some kind of battle."
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post #5 of 34
10/9/11 at 3:24pm
They go for $3.50 here and I live in a low cost area. Now there are cheaper cupcake shops, but the "expensive" one, with the scratch mix and all those good things your describing, is the only one that sells out. One shop had a mess load of inventory at the end of their day! icon_wink.gif
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post #6 of 34
10/9/11 at 3:40pm
I don't think $0.25 more is going to make or break you. If your cupcakes taste better than the competition, people will pay a higher price. I would consider even charging $3 a cupcake but that's just because it's only a $0.50 increase and people pay $3 on average for cupcakes around here.

Also, because it is in a high end store, customers won't think twice.
icon_smile.gif

Oh, and giving a price break with 6+ is a great idea! Makes people feel like they are getting a deal!
Started my business legally February 2012! Commercial kitchen and all!
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Started my business legally February 2012! Commercial kitchen and all!
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post #7 of 34
10/9/11 at 3:40pm
Duplicate... sorry
Started my business legally February 2012! Commercial kitchen and all!
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Started my business legally February 2012! Commercial kitchen and all!
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post #8 of 34
10/9/11 at 3:42pm
Quote:
Originally Posted by atwistedlime

My first question is where are you located? I have been traveling for the last year and have bought cupcakes in at least 15 different states and never found a cupcake that I paid less than $4 for.

In Seattle, WA cupcakes are like $6.



$4?!?!? Wow lol. I live in Seattle and $3 is the norm. $3.50-4 for specialty flavors. Where did you get cupcakes? icon_smile.gif
Started my business legally February 2012! Commercial kitchen and all!
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Started my business legally February 2012! Commercial kitchen and all!
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post #9 of 34
10/9/11 at 3:56pm
Unless u live in Podunk nowhere! I think your prices are very fair...if people take issue get on the Internet do some price comps in and around your area and justify your price if anyone takes issue but it would be shocking if anyone would think $2.75 is to high...explain your fresh ingredients that you use only the best if you do! Anyone I know would always pay a quarter for a better quality cupcake...I sold 15 cup cakes for 45 dollars and no one batted an Eye...and told me I was super fair, I operate from home and I don't have your overhead....there is definatly a huge difference in a delicious gourmet cup cake and a box type with skimpy lardy frosting! You get what you pay for thats for sure...I wouldn't compromise quality...stand for your freshness and quality over cheapness and a quarter ...Good luck!
Nothing is sweeter...than Grandbabies, They are one of Gods most precious gifts
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Nothing is sweeter...than Grandbabies, They are one of Gods most precious gifts
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post #10 of 34
10/9/11 at 4:22pm
Wow! I can't even get $1.25 for a cupcake where I am. Ridiculous!!
People just don't get it.
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post #11 of 34
10/9/11 at 4:22pm
I live in northern california and we sell them for 2.95 and other shop sell forabout 2.50- 3.00
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post #12 of 34
10/9/11 at 4:35pm
Thread Starter 
Thank you for all of the input . . I am feeling much better now about our pricing.

We are upstate NY. There are lots of nice restaurants and specialty shoppes. Few cupcake places around selling for about $2.50 (regular size). I have also paid almost $5.00 at one place, but the cupcake was little bigger and frosting to the moon. I see, however that they have kept their prices way high, but the frosting and cupcake has gotten smaller over the months lol.

After reading everyone's posts, combined with the local research, I think $2.75 is a good starting point for scratch, high quality ingredients cupcakes with ALL Butter buttercream.

Thanks everyone again!
The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
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The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
Reply
post #13 of 34
10/9/11 at 4:41pm
Quote:
Originally Posted by KuyaRomeo

We are upstate NY. There are lots of nice restaurants and specialty shoppes.



I have never been to NY but I have heard cupcakes sell for around $7? If you are around nice restaurants and shops then I would consider starting at $3. Just my opinion, but it seems like the customers you will be interacting with will not think that price is steep.

icon_smile.gif Good luck to you!
Started my business legally February 2012! Commercial kitchen and all!
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Started my business legally February 2012! Commercial kitchen and all!
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post #14 of 34
10/9/11 at 4:45pm
Thread Starter 
Quote:
Originally Posted by Bridgette1129

Quote:
Originally Posted by KuyaRomeo

We are upstate NY. There are lots of nice restaurants and specialty shoppes.



I have never been to NY but I have heard cupcakes sell for around $7? If you are around nice restaurants and shops then I would consider starting at $3. Just my opinion, but it seems like the customers you will be interacting with will not think that price is steep.

icon_smile.gif Good luck to you!



Thank you for the good wishes!!

$7 per cupcake is for NYC . .. we are 2 hours from there. . . but maybe you are right $3.00 may be a good place to start. The good thing for me is that the Homemade Chocolate shoppe already has built their image on high end, high quality products that demand a premium cost. Piggybacking with them, should help me eliminate most of the "o my god . . those prices are way too high"

Why complain about prices if you are shopping at Bloomingdales.

I will have to mentally weigh out $2.75 vs $3.00
The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
Reply
The King of Pops
TC Pops, A Division of Teddy Cakes, LLC

http://tcpops.com
Reply
post #15 of 34
10/9/11 at 5:08pm
Quote:
Originally Posted by KuyaRomeo

We are upstate NY. There are lots of nice restaurants and specialty shoppes. Few cupcake places around selling for about $2.50 (regular size). I have also paid almost $5.00 at one place, but the cupcake was little bigger and frosting to the moon. I see, however that they have kept their prices way high, but the frosting and cupcake has gotten smaller over the months ....... think $2.75 is a good starting point for scratch, high quality ingredients cupcakes with ALL Butter buttercream.

We are working inside a high end chocolate shoppe that has a client base whom already expect to pay a higher price for a higher quality.




Hobby baker chiming in.... Since you are in the ideal area that already markets to high-end customers, I think you could charge $3.00 per cupcake and $16 for 6 cupcakes, ESPECIALLY if you have fancy, custom packaging AND scratch ingredients AND 100% butter buttercream.

You are probably much better off to start a tad higher and come down if need be. People will come initially because you are new and they will wish to try out your wares. People always like trying the "new place". Also, you will advertise: Scratch, ALL butter buttercream, NO shortening!, FINEST possible ingredients. They will buy a cupcake (or 6) and if they like your cupcakes better than the competition, nobody is going to say your prices are too high if they are 50 cents more than the baker down the street.

If you do not have tax on cupcakes consumed in the shop or cupcakes sold "to go", it is also much easier for a customer AND you to just hand over three $1 bills.

Think about Starbucks and how much people fork over for coffee......

I wish you the very best in your new shop!
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