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Thread for People Who Like Pricing!

post #1 of 104
2/18/12 at 12:13pm
Thread Starter 
I may be the only one but is there anyone else that actually LIKES to talk about pricing? Costing and pricing fascinates me and it seems like most of the time when people have pricing issues, people tell them to look at how much it costs in ingredients, how long it takes, etc.

These are great ways to get a price but is there anyone who likes to share how much they charged and why? Or how much they would charge? Just for the fun of it? icon_wink.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 #2 of 104
2/18/12 at 12:27pm
Sure, I'll throw my hat in!! I like to talk about pricing too, especially in more specific terms instead of being so general. I try to start with the cost of my ingredients and expenses, then figure an hourly rate for my actual time, plus include a little profit margin. I've found that it turns out about the same as if I were pricing it by the serving.

Here's the Pokemon cake I did for my son's 8th birthday: http://cakecentral.com/gallery/2170770/pokemon-cake

It was a three-layer 12" round of chocolate cake with buttercream icing, with a chocolate ball pan cake on top that was also covered in buttercream. I made the seven Pokemon figures from a gumpaste/fondant mixture, and I used piping gel for the pond. His name was handcut out of fondant (I don't have a cutting machine). I don't recall what I spent on baking, making the icing, assembling, etc., but I know I spent 6-7 hours on the modeled figures. I decided if anyone wanted a cake like this, I would charge $225 for it.

How does that sound?
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post #3 of 104
2/18/12 at 12:51pm
Thread Starter 
That's awesome icon_smile.gif Nice example. You did a great job on figurines btw!

How much would you guys charge for a Xbox 360 cake to feed 15?
It obviously wouldn't be true to size. I'm talking about the ones that are white. I had someone email me about one and I figured I'd probably have to start with a 9x13 and shave it some.
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 #4 of 104
2/18/12 at 1:16pm
Well, I am assuming you are going to use fondant, so in my area, where ppl will pay, I charge $4 per slice and add in what I think totals up for ingredients and my time. I would charge $88. Hope this helps at all..
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post #5 of 104
2/18/12 at 1:43pm
I find that if I mentally (or officially) set a minimum for my specialty cakes, I don't have to do the math every time.
I have a $75 minimum on custom work, and I know what fits into that minimum. So when someone asks me for an xbox cake to feed 15, I think, "now how far above $75 should this cake be?"
For me, anything remotely 3D will automatically start at $100 and go up very, very quickly.
I do actually find pricing very interesting! At first it was intimidating, but now I find great joy in seeing those numbers add up!!!
life is short, get a cakesafe.
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life is short, get a cakesafe.
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post #6 of 104
2/18/12 at 2:12pm
Bridgette, that Xbox cake would be very tough. The problem is, there are certain cakes that, by their nature, are going to provide more servings than the customer's minimum requirement. Seems to me that Xbox cake is one of them. According to the Wilton chart, the 9x13 alone is 45 servings. So if you used the other poster's $4 per serving quote, that's $180. The problem comes when you try to tell a customer that a cake for their 15 guests will cost $180. Of course, they'll have extras, and it's quite a work of art, but that's what they will say in their heads.

Jenmat, do you also have a minimum for dessert cakes? I think it was Indydebi who said she wouldn't even turn her oven on for $50 (or was it more than that?). Seems like some of the other posters here have echoed that same policy.
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post #7 of 104
2/18/12 at 4:14pm
Thread Starter 
Quote:
Originally Posted by jenscreativity

Well, I am assuming you are going to use fondant, so in my area, where ppl will pay, I charge $4 per slice and add in what I think totals up for ingredients and my time. I would charge $88. Hope this helps at all..



Awesome, thanks! I quoted her $4 per serving of the cake before I carved it and for covered with fondant. She didn't reply so I assume it was too much. She said she wanted to stay around $60.
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 104
2/18/12 at 4:16pm
Thread Starter 
Jenmat,

That's very helpful. I want to have a minimum, but for now I don't. Obviously I don't do less than 12 cupcakes but that's about it for now since I'm just finally legal. But that's good to know.
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 104
2/18/12 at 4:19pm
Thread Starter 
Quote:
Originally Posted by GarciaGM

Bridgette, that Xbox cake would be very tough. The problem is, there are certain cakes that, by their nature, are going to provide more servings than the customer's minimum requirement. Seems to me that Xbox cake is one of them. According to the Wilton chart, the 9x13 alone is 45 servings.



Very true. That's how I originally felt when I read the email. That it wasn't possible. But that's for 2 layers. For one layer it would be 22 servings before it's carved but would also be short haha.

I figure this thread can be an area where we ask for help or opinions or just share what we charge. I know that we all have different economies but it's still interesting!
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 #10 of 104
2/18/12 at 4:27pm
I also enjoy discussing this topic, I tend to apply the following formula: price = ingredient cost + labor cost + (annual overhead cost / estimated # of orders per year) + 15-30% profit margin. Calculating your true labor cost can be complicated, especially if you have multiple orders being processed at once and can take advantage of slack time (this is a must when renting a commercial kitchen).

We price single tier cakes at flat prices (starting at $44 for an 8") since most people looking for simpler cakes are used to seeing this type of pricing, multi-tier cakes are priced per serving starting at $5.
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post #11 of 104
2/18/12 at 4:35pm
I like this topic icon_smile.gif Thinking about the Xbox cake..I just did one this weekend and charged $125 for it. I have a minimum of $100 for any type of carved cake...so thinking that this one didn't have TOO much carving and no super advanced details...$125 felt fair. It was time consuming, but not nearly as much so with larger or more elaborate cakes!! I wish I knew what others in my area charged for something like that!
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post #12 of 104
2/18/12 at 4:36pm
BTW the XBox design and logo is copyrighted by Microsoft, so before you make that cake (and certainly before you sell it) you should have written permission from the copyright owner. We usually push this responsibility to the customer, so they can choose if they want to deal with the hassle of obtaining permission themselves or going with a different, non-infringing design.
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post #13 of 104
2/18/12 at 4:59pm
Thread Starter 
Quote:
Originally Posted by jason_kraft

Calculating your true labor cost can be complicated, especially if you have multiple orders being processed at once and can take advantage of slack time (this is a must when renting a commercial kitchen).



How do you make sure you have multiple orders? How did you start out? Did you get enough orders right away once you were a business? Did you advertise? Sorry for all the questions, but I see you on here a lot and value your opinions and experiences.

Quote:
Originally Posted by jason_kraft

We price single tier cakes at flat prices (starting at $44 for an 8") since most people looking for simpler cakes are used to seeing this type of pricing, multi-tier cakes are priced per serving starting at $5.



I decided to do this as well. My 8" start at $48 but I may be able to lower that a little once I buy more ingredients in larger quantities. Did you say you shop at restaurant depot? I just signed up and need to check it out!

I also didn't know if I should have a flat price with no customization, like this: http://www.cravecupcakes.ca/menu/cakes.html

or do what it seems like you do and START at XX amount and add more for customization.
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 104
2/18/12 at 5:05pm
Thread Starter 
Quote:
Originally Posted by ConfectionsCC

I like this topic icon_smile.gif Thinking about the Xbox cake..I just did one this weekend and charged $125 for it. I have a minimum of $100 for any type of carved cake...so thinking that this one didn't have TOO much carving and no super advanced details...$125 felt fair. It was time consuming, but not nearly as much so with larger or more elaborate cakes!! I wish I knew what others in my area charged for something like that!



I can't wait till I can have a minimum that high AND get orders icon_biggrin.gif Are you going to post a pic?
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 #15 of 104
2/18/12 at 5:11pm
Quote:
Originally Posted by Bridgette1129

How do you make sure you have multiple orders? How did you start out? Did you get enough orders right away once you were a business? Did you advertise?


After we finished our initial R&D (which was all done at home) and had a kitchen lined up we sent out an advertising blitz on Google, Yelp, and relevant special interest groups -- since we focused on allergy-friendly products we posted to local support groups for food allergies and Celiac. Things were slow for a few months, but once we started getting Yelp reviews and positive word of mouth we were able to fill 2-3 baking days a week with 5-10 orders/week and eventually had to start turning away new business.

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Did you say you shop at restaurant depot? I just signed up and need to check it out!


We did shop at Restaurant Depot for quite a few items, but online retailers were sometimes considerably cheaper so I did quite a bit of procurement-related research.

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I also didn't know if I should have a flat price with no customization, like this: http://www.cravecupcakes.ca/menu/cakes.html


It's a good idea to provide examples of flavor combinations, decorations, etc. but customers like the ability to customize the cake to their specs. If you simplify your WIP inventory (for example making large batches of vanilla BC and only coloring or flavoring as needed) this customization should cost you very little. On the other hand, if you plan on keeping inventory of finished goods for short notice pickups or you have retail shelves to stock then it makes more sense to have a few set products that can be made in advance.
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