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I am not paying that much for a cake!!

post #1 of 19
Thread Starter 
I just started a business, right now it's a side business....but I was just awarded grant money, and now am dreaming BIG! However....I've been making awesome cakes and donating them for marketing or just charging my ingredient cost- and now I am getting real orders...and I am having the HARDEST time charging people.

I know these cakes are extremely time consuming and sometimes expensive to make, but for some reason I am so afraid to say, "okay, I can make this cake for you...that will be $200." I am afraid they will think it's too much or say something very offensive.

I put everything I have into my cakes, and am so happy to have discovered my passion -but I can't get passed the pricing! Any tips or support?

I just bought the software cakeboss- and have to go get the prices of all my ingredients and plug them in for help....but as far as when a new client says, that's too much or something else to that effect, how do you handle it??

I don't want to underprice myself....but that's exactly what I am doing!
I've learned so much from my mistakes..... I'm thinking of making a few more!
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I've learned so much from my mistakes..... I'm thinking of making a few more!
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post #2 of 19
If you want to stay in business, you'll have to price your cakes so that you can make a profit.

When a client says a cake is too expensive, simply ask what their budget is and offer cake/decorating suggestions at that price point.

HTH
post #3 of 19
Get that info into cake bossicon_smile.gif That changed my entire attitude about pricing my cakes. Once I put in actual cost and and hourly wage for myself, it has become a lot easier to say this cake cost X amount of dollars. I consider Cake Boss my best cake decorating tool...it keeps me from selling myself shorticon_smile.gif

Oh and don't start low and think you can raise your prices later. Ingredient costs are on the rise and people won't like it of every time they order from you your prices have gone up. It's just better to start with correct pricingicon_smile.gif Say it with me
'My cakes, my talent and my time are worth it!'
Visit me at www.keeponcaking.com for tutorials and other cake stuff.
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Visit me at www.keeponcaking.com for tutorials and other cake stuff.
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post #4 of 19
I would think also your prices should be competitive with cake decorators in your area....you can take all the above advice but you need to factor in the competition.....
Georgine
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Georgine
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post #5 of 19
When I first started my business, I did some covert pricing of my local competition. Trust me, everyone checks out everyone else. You definitely need to stay competitive, but it also needs to be worth your time. Your "Local competition" does not include grocery stores. Most of those cakes are mass produced at a huge factory and shipped in frozen.

When people tell me I can get it for x amount at costco or walmart or albertsons, I very nicely tell them that I don't get my ingredients wholesale, so I can't afford to sell them the cake for the amount. I also explain to them what makes my cakes better, but if they still choose to go with the grocery store cake, I don't let it bother me, 9 times out of 10 when they get that cardboard grocery store cake, they come back to me next time.

When you start getting into higher dollar items, a lot of people don't understand what all goes into our art. They see a 30 or 60 minute show on food network in which an entire beautifully sculpted cake is made, and they think, that wasn't so bad, and mine is much simpler than that, so it shouldn't cost much. They don't see all of the behind the scenes work and premade items and assistants scurrying around off camera.

I had a wise (and also successful) bakery manager tell me something that has stuck... "It's their loss." I had to learn to charge what I knew I was worth, good or bad. If I take less money than my time and art are worth, then I'm basically paying them to eat my cake, which doesn't make good business sense. If they come to me, and I give them a quote, and they don't want to pay it, I don't take it personal, I just move on to the next order. It's their loss.

And like someone else said, it's hard to raise your prices later, especially when you start getting repeat customers. Figure out your cost, pay yourself a decent amount of labor, and compare to the competition. Set your prices and stick to them. You'll be happy you did.
post #6 of 19
You have to be confident and stick with your pricing, otherwise your business will never work. I came up with my prices, looking at ingredients, time etc. and that is what I charge. It's true that you want to look at your competition, however if I priced my cakes as low as some of the other business' in the area I would be making next to nothing. That being said, I have had many people in the last few months ask for quotes and then tell me I am too expensive or out of their budget. Doesn't both me anymore but I know what my time is worth too me.

I think too many people think cake decorating would be a great and easy way to make an income and work at home while their kids are home. I think however, the majority of us who have kids at home and are trying to make cakes are getting little sleep and only making alittle extra money for the amount of time it takes to produce a great cake.

I still feed bad when I hear how little some people charge for what they are making.
post #7 of 19
Thread Starter 
Thanks so much for all the advice and encouragement, I am so happy to have joined this forum!! I like the comment: If you want to stay in business, you'll have to price your cakes so that you can make a profit. And I don't want to upset anyone by raising prices in the future...so will just have to toughen up!! I know it takes a lot of late nights and exhausting hours to complete these, but it is so fun because every cake is different and a challenge and I never knew I could do any of this before! It's nice to hear that others are up late and juggling work and kids as well!! Thanks again for the advice icon_smile.gif
I've learned so much from my mistakes..... I'm thinking of making a few more!
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I've learned so much from my mistakes..... I'm thinking of making a few more!
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post #8 of 19
This was a big pitfall for me too, especially because I would never spend $150 on a birthday cake icon_wink.gif HAHA! But I had to learn that not everyone is my customer, and that's ok. Not everyone is a Coach bag customer, some prefer to buy handbags and Walmart and that's ok. Some people will buy Walmart cakes and that's ok, too. Those are not the customers I need.

The first time you tell someone, "that will be $200 as pictured, including all of the handmade gumpaste flowers" and they say "OK!", your confidence will increase threefold. Plus, as someone said above, I always offer that I can work with them on alternate designs that will fit their budget. They're usually ok with that. Plus, if your base prices are on your website, they should have a general idea of the cost before they even call, so it shouldn't come at a huge shock. They would know up front that it's going to cost more than $20!
post #9 of 19
I wouldn't pay $200 for a birthday cake. I totally understand the work and time that goes into it, but I have a hard time spending $200 on anything. I think a lot of people get into cake decorating so they don't have to spend that much on their kid's birthday cakes.

I don't go out and buy name brand purses, shoes or anything else that would cost a lot. I don't go out to the fancy restaurants that end up costing $50 a person. I hate going to the casino and sticking money in a slot machine because in my mind I think I could buy this or that with this money.

But there are many people out there that would. You just have to find the right group for your product.
My Weight Loss Support Group is The Chunky Monkeys!
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My Weight Loss Support Group is The Chunky Monkeys!
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post #10 of 19
Quote:
Originally Posted by TexasSugar

I wouldn't pay $200 for a birthday cake. I totally understand the work and time that goes into it, but I have a hard time spending $200 on anything. I think a lot of people get into cake decorating so they don't have to spend that much on their kid's birthday cakes.

I don't go out and buy name brand purses, shoes or anything else that would cost a lot. I don't go out to the fancy restaurants that end up costing $50 a person. I hate going to the casino and sticking money in a slot machine because in my mind I think I could buy this or that with this money.

But there are many people out there that would. You just have to find the right group for your product.



My thoughts exactly! Were we separated at birth?!
The pessimist complains about the wind;
the optimist expects it to change;
the realist adjusts the sails.
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The pessimist complains about the wind;
the optimist expects it to change;
the realist adjusts the sails.
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post #11 of 19
Thank you for posting this! I am having the same problem. In my area I am up against the Walmart mentality. " why would I spend $200 on a cake when I can pick one up at Walmart for $30.00?!" Not a lot of credit is given for the talent, time, and overall taste and appearance of the cake so I find myself charging for the ingredients and not too much more for fear of my customer running to Walmart for a deal....uuuggh! ~I am gaining new confidence and attitude reading all the replies to this topic. Thanks!
post #12 of 19
While I wouldn't spend so much on a cake, there are a lot of people who will! When it comes to pricing and comparing your cakes to Walmart/grocery store cakes, keep this in mind: Your Cadillac dealer isn't going to give you his cars at Chevy prices just because you can find a cheaper car than his. Coach isn't going to lower their purse prices to compete with cheapie knock-offs. So don't think you have to price your cakes to compete with Walmart.
The pessimist complains about the wind;
the optimist expects it to change;
the realist adjusts the sails.
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The pessimist complains about the wind;
the optimist expects it to change;
the realist adjusts the sails.
Reply
post #13 of 19
Pricing is based on many other things besides just ingredient costs and time. It's also based on skill level. Do you think your skills are on par with other bakers who charge $200 for a cake? Because while I see real talent emerging in your cakes, I don't see the same skill set as someone who perhaps has been in the business a lot longer who has obviously had a lot more time to hone their abilities.

I would hesitate to start charging top dollar right now. Get more practice, and as you improve, so should your pricing. As I said before, you have obvious talent and you have the passion to make it happen...so as you do more cakes your demand and your pricing should rise accordingly. thumbs_up.gif

If I am ever on life support, unplug me...

Then plug me back in.  See if that works!

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If I am ever on life support, unplug me...

Then plug me back in.  See if that works!

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post #14 of 19
say it in the mirror ... over and over:

"Not everyone can afford me ... and that's ok." thumbs_up.gif
post #15 of 19
I read a post not to long go and they gave great advice. Don't underprice yourself just for a chance to build your portfolio. Make a cake if you want to make a cake. I'm sure you could find someone to eat it. Then your not working for free and you won't feel like your giving up your weekend. You will just be enjoying your art. It's better to do one cake at an appropriate price than to create many at a loss of your time. I remind myself of this all the time. Best of luck to youicon_smile.gif
I'm not crazy, I'm limited edition!
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I'm not crazy, I'm limited edition!
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