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Bit upset and doubting my pricing...

post #1 of 10
3/12/12 at 4:43pm
Thread Starter 
Ok so, long story short, I'm a fairly new cake decorator (in terms of actually asking people to pay, at least!) and so far my tiny 'business' has only really done cakes for friends and family. I've been trying to extend my client base a bit lately because work's been so slow and I'm in need of cash.

I got an email on Saturday from a woman looking for a cake for her son's birthday for a week's time. All she said was that it needed to have Woody from Toy Story on it, and didn't really give me any other details. At first I was a bit reluctant to take a rush order (my website states that I normally ask for orders to be placed at least four weeks in advance - I make no pretence of being a large business!) but thought hey, I need the money.

I gave her various options with rough prices for each, at which point she told me more things she wanted (chocolate cake and a particular greeting). We eventually settled on a 10 inch chocolate cake, covered in fondant and a frozen buttercream transfer of Woody on the top with the greeting. I told her that the cost of the cake would be £60 (about $93) and she agreed and wanted to go ahead. I let her know the deal with deposits (I ask 20% up front to cover ingredients) and emailed her a copy of the contract. She was unable to print the contract herself, so as she lived just around the corner I popped it through her door earlier on today, after not hearing anything for 24 hours. I also sent a follow up email asking her to let me know if the contract had reached her alright, and reminding her about signing it and sending over the deposit.

Fast forward to half an hour ago when I get an email saying that she got the contract but decided not to go ahead because of the price, as she has found a bakery that will do the same cake for half the price.

Now, I'll admit I'm a rookie when it comes to business, but I have confidence in the quality of my cakes and I didn't want to charge any less for a cake that would have cost me at least £19 in ingredients alone. And the fact that she agreed to the original price outright and only pulled out when the contract was in front of her and the deposit needed paying rings alarm bells. But... I'm doubting myself. Did I overcharge in the first place? Or should I just chalk it up to experience and move on? I know I shouldn't take it personally because hey, it's business, but I'm still so new to this business that it's knocked my confidence in my pricing etc. a bit.
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post #2 of 10
3/12/12 at 4:51pm
I'm just going to mention briefly that it is copyright infringement to reproduce copyrighted material without permission. Just a quick search on the forums for copyright infringement will give you all the answers you need on that.

Also, I'm in the US, so I probably can't give you a specific answer about if you're charging too much or not.

But I can say that I work at a bakery where the only place to get a cheaper cake is a grocery store. We're not cheap, but we're not expensive either. Nearly every week I get a customer that has to tell me we're too expensive. I just shrug and apologize if they can't order from us. I figure they are just telling me that to try and bargin a lower price, or they just haven't done proper research to realize we are one of the cheapest custom bakeries in town. My point is there will always be someone that says you're too expensive. But there will also be many others that won't bat an eyelash when you tell them their total. Those are the customers you want.
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"Focus on what you share in common, learn from what makes you different, support each other through struggles, and celebrate each others' success."

Check out my buttercream rose tutorial!
http://www.youtube.com/watch?v=kGa5j46Z05c
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post #3 of 10
3/12/12 at 4:59pm
Thread Starter 
Thanks for the reply! Re: copyright - I know, I'm always a bit 'icky' about cakes like that anyway. My plan was the change the image enough so that it was still acceptable to the customer, but could be sold as 'generic cowboy', if that makes sense? Fine line to walk though, I know...

You made me feel better haha, thanks! So easy as a newbie to get your confidence knocked!!
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post #4 of 10
3/12/12 at 5:19pm
Quote:
Originally Posted by mistresslucille

Ok so, long story short, I'm a fairly new cake decorator (in terms of actually asking people to pay, at least!) and so far my tiny 'business' has only really done cakes for friends and family. I've been trying to extend my client base a bit lately because work's been so slow and I'm in need of cash.



You did everything correctly. The problem is not the client, it is your need for business. If you were in a position of strength (NOT needing extra income because "work is slow"), you would be able to shrug, and say, "Oh well. She was not the type of customer that I need to grow my business."

Unfortunately, just because you CAN charge "XXX" dollars for a cake, doesn't mean you will get it. The client made a decision to spend less on a cake. It had nothing to do with your pricing structure. The cake will not be "the same cake for half the price", it will be a less expensive version, and may be nothing at all like the cake she told you she originally wanted.

If you truly want to make money selling cakes, you must do the "due diligence" involved with preparing a business plan, figuring out your costs and overhead, creating a firm pricing structure that will incorporate all the information, and identify a marketing segment that WILL pay your prices. (Cakes for friends and family is light-years away from selling high-end custom cakes. Friends and family are NOT a targeted customer base.)

I suggest you look at this website:
http://www.cakeboss.com/PricingGuideline.aspx

p.s. May I suggest a change in the wording on your www home page? Instead of saying, "XXX is a small cake making and decorating business based in XXX", you may wish to say something similar to, "XXX is a cake decorating boutique based in XXX".
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post #5 of 10
3/12/12 at 5:33pm
Thread Starter 
Quote:
Originally Posted by Apti



If you truly want to make money selling cakes, you must do the "due diligence" involved with preparing a business plan, figuring out your costs and overhead, creating a firm pricing structure that will incorporate all the information, and identify a marketing segment that WILL pay your prices. (Cakes for friends and family is light-years away from selling high-end custom cakes. Friends and family are NOT a targeted customer base.)

I suggest you look at this website:
http://www..com/PricingGuideline.aspx

.



Thanks, I've never seen that website before and it's so useful! Your advice is spot on - I definitely need a stronger business plan to reach a more specific customer base than "people who use gumtree". Guess I need to put in a couple of extra shifts in the day job so I can get some better advertising icon_wink.gif

Quote:
Quote:

p.s. May I suggest a change in the wording on your www home page? Instead of saying, "XXX is a small cake making and decorating business based in XXX", you may wish to say something similar to, "XXX is a cake decorating boutique based in XXX"



I like that! Thanks for the input, very much appreciated!
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post #6 of 10
3/12/12 at 9:35pm
You're very welcome. Is "Gumtree" the UK equivalent of our Walmart?
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post #7 of 10
3/13/12 at 12:53am
Quote:
Originally Posted by Apti

You're very welcome. Is "Gumtree" the UK equivalent of our Walmart?



Gumtree is a website rather similar in function to Craigslist icon_smile.gif

Just to add my two cents, I think you did the right thing too. People don't realise how many hours go into making and decorating cakes, and they forget that you want to be paid for your time >_< Good luck with your business!
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post #8 of 10
3/13/12 at 1:58am
Understand how you feel, I've had people turn me down on orders under $50. It is discouraging but then I remind myself I need to make money doing this and it isn't a free service nor do I wish to lose money on cakes.
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I wish I may, I wish I might, have this wish I wish tonight.
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post #9 of 10
3/13/12 at 7:39am
Don't doubt your prices because she decided a 'designer' cake wasn't in her budget. Sometimes people just need to 'try on' a cake before they are faced with the reality that they can't have what they want so they need to buy what they can afford. It's like the brides that go to Kleinfelds knowing full well they don't have $5000 on a dress. They just want the experience of being treated like they have money to blow.

I'd personally rather have her tell me know she can't afford me than for her to buy it and have remorse later. That never ends well either. At least this way the only trouble she has caused is a bit of wasted time.
If you are an optimistic person, you could say that at least you got to work on you customer skills and the ordering process. icon_smile.gif

As Debi says, "Next..?"

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wife to David for 23 years
mom to 13 blessings
Nine who are still living at home that range from 21 to 3 years old.
Holly, Amy, Aaron, Evelyn, Zebedee, Melody, William, Melissa and little Tobin
and four more sweet babies in heaven.
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wife to David for 23 years
mom to 13 blessings
Nine who are still living at home that range from 21 to 3 years old.
Holly, Amy, Aaron, Evelyn, Zebedee, Melody, William, Melissa and little Tobin
and four more sweet babies in heaven.
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post #10 of 10
3/13/12 at 8:11am
Don't rethink your price. Your work has a value and, unfortunately, price will often come in to play no matter the quality. Some people don't care about price and with others it's a biggest issue. You can't please everyone. Just thank her for considering you and best wishes for a really fun party. Then move on.....
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Art comes in many forms.
www.texasgalgallery.com
www.sweetinspirationsblog.blogspot.com
www.cancer2curedjourney.blogspot.com
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