Originally Posted by Apti
Nobody can figure out anyone else's PER cupcake pricing because there are too many variables.
It is exactly like a post that asks: "How much for this cake?". We don't know your recipe, if you buy in bulk, at retail pricing, with or without coupons, what type of chocolate (cheap, medium, expensive), what type of butter (Land O Lakes or Walmart brand), powdered sugar (Walmart made with beet sugar or C&H Pure Cane sugar), what type of cupcake liners, how long it takes you to make them, if your quality for custom cupcakes is superb/medium/poor, if you fill your cupcakes, if you buy Meyer lemons or use reconstituted lemon juice, fondant or buttercream....... The list can go on and on and on....
Only YOU can determine the cost of your cupcakes including labor, time, ingredients, supplies, overhead.
When I was starting out as a hobby baker 2 years ago, I kept track of every single expense for the first six months of my hobby. (When it reached the point where I started to gasp for air and got light-headed after looking at the totals, I quit keeping track.) Six months into my hobby, I broke down costs and figured out that a 2 layer, 8x4" cake cost me about $8-$12. I eagerly posted my information on CC and got about 15 replies saying, "Why are your costs so high!?"
That's when I found out all the information I posted above in my first paragraph.......
Too true. My COGS are high because I buy the best stuff I can get my hands on - I also live in the most expensive place in the US to live. That makes the prices I pay for my ingredients and how much I charge for my cake/cupcakes completely irrelevant to anyone that does not live here. And even if you did live here, it's still completely irrelevant because you don't make my recipes, you don't have my reputation, and you do not have my experience. And vice versa. I pay more in rent for my tiny condo then most people pay on a mortgage for a 4 bedroom house. I pay bridge tolls and parking tickets and almost 10% sales tax and $4.50/gallon for gas and writing the check for my car insurance makes me gag every month and parking meters are $.25 for 6 minutes. I could go on and on listing out all the expenses I have that you don't have. And it don't mean a thing.
People need to understand that what you pay and what you sell for are completely relative to where you live. If I lived in some flyover state like Kansas, I'd be paying a lot less for gas, electricity, butter, chocolate etc. and things like Wal Mart cake would be my competition. But I also can't imagine I could charge $3.75 for a cupcake because the market would not tolerate it. But that's how much I have too charge in order to reach and maintain a decent profit margin here
.So your real question should be, "what is your profit margin"?
Because "what do you pay" and "how much would you charge" are totally the wrong questions and won't help you in any way!
I aim for 40%. I don't actually know if that is low or high, but its working for me.