Sorry, wasn't getting updates. My dessert style cakes start at $25 and go up by size. I allow icing polka dots or icing roses in 2 colors- that's it.
I agree that you shouldn't turn your oven on for just anything. However, I am baking anywhere from $500-$1500 worth of cake per week, so another quick $25 is fine by me!!

Cheatize, you are now one of my new "I want to be her when I grow up" people. Wish I had the motivation to do the spreadsheet thing. I am in awe. In the beginning I did sit down and figure out costs, but to have it at my fingertips would be amazing!

I haven't had overhead until now (I mean sure I have my home electricity but I wasn't charging) so I haven't done this. I need to. I feel like a % would be better but I also need help with this!

We assign overhead based on a flat rate per order, since it covers fixed costs that have very little to do with the size of a specific order. Overhead is supposed to be steep for small orders, that's why we price smaller cakes at a higher per-serving price than larger cakes.

If you do mostly smaller orders you will probably fill more total orders per year, meaning you can lower the overhead component of each order. Conversely, if you focus on larger orders you will have a smaller number of annual orders meaning each order will need to contribute more to overhead.

For example, let's say you have $5000/year in overhead. If you focus on large wedding cakes and you make 50 per year, each cake will have an overhead component of $100. But if you make mostly smaller cakes and have 300 orders per year, the overhead per cake is only $17.

Oh, okay. I have been pricing all my cakes at the same price per serving. How did you figure out how steep the slope should be from 8" cake to 12" or whatever?

We didn't set a specific percentage to decrease cost per serving as the cake size increases, the price just naturally works out that way if you use the cost + profit margin formula.

Also note that this is only for our single tier cakes, which have flat prices. For multi tier cakes the overhead is such a small component (thanks to the smaller cakes) we don't bother adjusting per-serving prices based on cake size, only for premium fillings and design complexity.

This is precisely what I intended I wanted a place to just talk pricing. You can post specific or vague questions or just post a cake and say what you charged and ask others what they would charge. Anything and everything pricing

*PHEW*!!! Okay, when I was trying to figure out my prices I tweaked, worked and re-worked my prices on single tier/flat price cakes for hours trying to make it work so that the little ones were high enough in price but the bigger ones weren't insane. I love that I can just use the figure that comes out of the equation! Sometimes the simplest things are the hardest haha. For some reason I thought they should all be the same price per serving.

So if a customer were to calculate it and ask why it was cheaper per serving for a bigger cake, you just tell them you get a discount for buying more kinda thing?

In four years and 700+ orders that has never come up, in my experience customers don't usually question why they are paying less than expected.

If they did ask I probably would sell it as a discount for buying more. This form of pricing for smaller cakes is also a great upsell opportunity -- when someone asks for a quote for a basic 8", I always mention the price for the 10" as well since it's only $10 more.

Originally Posted by jason_kraft


In four years and 700+ orders that has never come up, in my experience customers don't usually question why they are paying less than expected.

I meant more in the opposite way, as in "why is your 6" cake so expensive?!"

Another random question, what do you guys charge for smash cakes? My 6" cakes are pretty expensive (in my eyes) for a 6" cake. But it's not worth my time to do one for $15. But smash cakes I would assume are 6". So do you give them a deal on one since they're buying a bigger cake for their guests? I've seen some bakeries even include it.

I actually don't think we've ever sold a smash cake...people have bought 6" cakes a few times, but they are priced the same as 8" cakes.

If the customer wants a smash cake to accompany a $500 order there's some more leeway there than if the smash cake is with a $50 order. It would certainly not be free but we might charge something like cost + 5-10% instead of cost + 20%.

It really depends on your costs, how efficient your processes are, and your anticipated revenues based on demographics and your target market (all this should be in your business plan). If you can rent a kitchen for $10-15/hour and sell two $200 cakes a week it might be worthwhile.

Many successful baking businesses will supplement their custom cakes with a wholesale line of lower end products, this goes a long way towards chipping away at overhead and filling in slack time.

If someone is ordering a custom 1st bday cake, I will do a 4" single layer smash cake in white or chocolate for $5. It isn't on my website, they have to ask for it, and it isn't overly decorated either- sprinkles and a number 1. I have some small single cupcake boxes and just put it in there. It isn't to make a profit, more of a service I can do for my customers, and it's just so darn cute to know a little one will be destroying it in a matter of hours!

However if someone orders one of my $25 dessert cakes, it's not going to happen. And if they want it overly customized, it's not going to happen. If they want it for Johnny's 6th birthday, it's not going to happen. One of the pleasures of owning the business I guess.

There is no reason a 1 year old needs a 6" cake. TOO MUCH SUGAR!! The 4" single layer is probably even a little too much, but at least it is smaller.

Originally Posted by jenmat

There is no reason a 1 year old needs a 6" cake. TOO MUCH SUGAR!! The 4" single layer is probably even a little too much, but at least it is smaller.

Thanks for your insight! I completely agree that a 1 year old doesn't need a 6" but they barely eat any of it, it's more just so they have a lot to smash I feel like the 4" might be a little small for aesthetics reasons. But maybe not.

Is that percentage on top of cost before the profit or do you mean that as your profit margin?

The percentages are the profit margin. For a very simple smash cake the cost would be quite low, probably in the $15-20 range, or less if you consider the main cake to take care of the overhead contribution for the order.

Okay! Thanks! Is $15 your standard price for 4" or do you not offer them except for smash cakes? I sold one for a mini cake for Valentine's and charged $17 after a $3 VDAY discount. I don't have 4" on my menu but had them as a mini cake special for 2 (even though they serve more than 2).

Sounds like a good idea. Tiered cakes makes sense. Thanks!

Okay, this is gonna be long and rambling. I hope it helps someone and gives you some insight into how much work all of this is.


What do you do best? What do other people say is your best work? What do you want to do? What is your goal for your business? Do you want to do $1,000 cakes? Wedding cakes only? Birthday cakes? Sheet cakes? Cupcakes?

When people see something about your business, what do you want them to think? Upscale? Classy? Friendly? Like getting a cake grandma used to make? Custom? What words would be describe your business?

Lets say you want a wedding cake only business. You want it to be custom work only, no copying other cakes, and you want to do grand centerpiece cakes. All your recipes are scratch and people dont seek you out for vanilla or chocolate. You make chai, boysenberry, whatever specialty flavors with the finest ingredients and will buy local even if it costs more as long as it compares favorably to national brands. You dont do sheet cakes, kitchen cakes, cupcakes, or grooms cakes.

Thats an upscale market. Already you can rule out some income levels are these are not your main clients. Starbuck coffee instead of McDonalds drive thru. What are the most likely venues where your clients hold events? Go online, go in person, make a phone call, or whatever so you get a feel for those places. How much are they to rent? How much are chair, tables, and tablecloth rentals? Who is on their preferred vendor list? Check out those people and their prices. You already know these are not $300 wedding cake people. They expect to pay quite a bit more for the cake but how much more?

Where are the upscale areas near you? Where do they shop? How expensive are the places where they shop? How do they find people to hire? The local cake supply store? Peer recommendations? Whats the latest craze among this income level- can you check out those places to see if advertising there is appropriate? Do you need to advertise in certain publications?

Start checking out the competition for the area. Go online, ask people, ask venues. What names keep coming up over and over? What media coverage has there been for these cake artists and for those upscale weddings? Anywhere that you think will give you info/lead you somewhere, check it out. Check out industry reports and the census stats.

Hang out where they hang out. What do they expect of people? Are they looking for personal relationships where they feel you work exclusively for them? Do you need to provide services not normally provided like table design and set up? Do they need to feel you are helping them out and making them feel like you are making their hectic lives easier?

Perhaps these links will help, as I feel I am rambling.

http://www.inc.com/guides/201104/how-to-narrow-your-target-market.html

http://sbinfocanada.about.com/od/marketing/g/targetmarketing.htm

http://www.marketingmo.com/strategic-planning/brand-strategy/

http://www.brandingstrategyinsider.com/2009/10/10-branding-and-marketing-trends-for-2010.html

http://articles.bplans.com/running-an-online-business/online-business-strategy/your-online-competitive-analysis/163

http://www.census.gov/econ/census/snapshots/SNAP72.HTM

http://www.costofwedding.com/

http://www.e-myth.com/cs/user/print/post/marketing-vs-advertising

http://www.marketresearch.com/

https://www.aibonline.org/resources/statistics/cake.html