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?
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. 
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
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."
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! 
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. 
Oh, and giving a price break with 6+ is a great idea! Makes people feel like they are getting a deal!
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?
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!
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!
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. Good luck to you!
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.
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
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!
How much of an hourly wage are you paying yourself selling cupcakes at $2.50 each vs. $2.75 or $3 once you factor in ingredients, packaging, overhead, and a 20% profit margin?
Mine is another vote for selling them for $3. I'm in a suburb of Nashville, and I'm pretty certain Gigi's here sells for $3 each. And yes, they are just barely larger than your typical homemade cupcake, with icing to the moon. In fact, when you pay at the register, they say, "Here are your cupcakes...be sure you set them on the floorboard of your car so that the icing will remain intact." I heard the girl parroting that line for all the customers ahead of us. Frankly, I don't think Gigi's is even upscale either, so I bet you'd be fine at $3.
My two cents.....
I'd like to know where you could go to a restaurant and purchase a dessert for $3.00 a serving.
A restaurant-style dessert is very different from a cupcake. Plus said desserts are usually 2-3 servings.
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.
Why complain about prices if you are shopping at Bloomingdales.
I agree with everything you said! Oh, okay 2 hours away makes sense!
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.
Think about Starbucks and how much people fork over for coffee......
Couldn't agree more!
hey everyone! I think someone else touched on this but my right brain & marketing know how says $3+
You don't want to start so low that you're raising prices by Christmas. Generally customers will accept price increases about 6-8months into the opening, but hardly ever before that EVEN IF they can afford it.
Point is, if they can afford it now then price it that high now then there's no trouble later on. If you're in a high end location surrounded by specialty shops, etc then people expect to pay a certain amount for quality goods.
Think about it like this .. If you were a dress designer on Rodeo Drive would to price your dresses like you're selling them in Target? I sure hope not...
OK, me again. I just looked at your photos (Everybody: Look at her photos!) If you charge less than $3 a cupcake I'll have to fly out there and hurt you.
I wanted to dive into the computer or start licking the screen. Those LOOK and SOUND FABULOUS!
I'll have to board the plane with you. I was thinking, "okay 2.75 sounds reasonable for sure" then I looked at your pictures and actually said out loud "h*ll no! $3 at least." My husband have me a very odd look lol. I didn't realize that we were talking about more than a very basic cupcake. They look delish!
Good luck with the new bussiness.
KuyaRomeo~~PLEASE post a reply on this thread after you open and let us know how it went. (That way we'll get an email notification that another post has been made and won't miss your good news!)
Besides, you owe it to kel58 for making her husband worry about her mental health.....
GarciaGM, where around Nashville are you? I am in M'boro with a Gigi's right around the corner. I go there when I'm too lazy to bake and want a fun flavor. Cinnamon Roll is one of my favorites!
And for the OP, just about every cupcake shop I've seen around here goes for at least $3. Although some o them offer punch cards like buy 12 get 1 free, buy 12 dozen get 1 dozen free. Gigi' used to participate in a program where with a local discount card sold at our schools you could buy 3 get the 4th free. It actually really did make people go ahead and buy more. I would always go in and buy 2, 1 for me and 1 for my husband. It would drive him crazy because he wanted the value of the 3 for 4, even though that meant spending more money to get it, and consuming more calories when he was trying so desperately to lose weight. He just couldn't resist a good deal. Something to keep in mind for your loyal repeaters.
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