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How to price cakes!!!!!

post #1 of 6
7/15/12 at 7:07pm
Thread Starter 
I have been making cakes for a little over a year now and I've been charging 2.00 a slice with 20.00 decoration. I've been told from some cake stores that my prices are too low. I know pricing all depends on the area you are in but I'm having a problem on how to decide to change my prices. Such as for a tiered cake say they want to feed 25 ppl and I charge 70 for it but I use a 10 and a 6 inch which serves around 30 or so then I'm loosing out on money for the extra 5 slices. So I'm confused on how to charge. Plus I did a wall-e cake which had sculpting included, should I charge more for sculpted cakes ???
PLEASE HELP!!!!!!!!!!
Thank you!!!
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post #2 of 6
7/15/12 at 8:18pm
For each cake you need to determine your cost, which includes ingredients, labor (number of hours needed to complete the order * your hourly wage), and the overhead allocated to that cake. Add a profit margin to your cost and you have your price.

So if someone wants a 10"/6" tiered cake, let's say that (for example) it will use $30 in ingredients, take 6 hours to complete start to finish (with your hourly wage at $12), and contribute $20 to overhead costs (license fees, insurance, accounting, etc.). Your cost for this cake would be $30 + (6 * $12) + $20 = $122. If a profit margin of 20% makes sense based on market prices in your area, you would be charging $147.

Note that the number of servings is irrelevant until you need to come up with a per-serving price. Based on Wilton's wedding cake chart a 10/6 serves 50 people, so your per-serving price with the example numbers above would be $3.

Depending on where you live you may be required to bake out of a licensed and inspected commercial kitchen to be legal, so if you need to rent a commercial kitchen by the hour make sure to include the rent in your cost and pass that on to the customer. Also be careful about reproducing copyrighted images, for example if you reproduce any Wall-E logos or characters out of fondant/gumpaste or BC you would need to get permission from Disney.
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The Bakery Business Perspective
An experimental blog with new content every Tuesday!

Recent Articles: The Magic Pricing Formula • Copyright Law
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post #3 of 6
7/15/12 at 9:02pm
Thread Starter 
Ok thank you so much!!!!
Also I had no idea about the contacting Disney. How do you go about doing that? Do you know if they ever deny anybody?
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post #4 of 6
7/15/12 at 9:15pm
You can submit a request to become a Disney licensee in writing (more info at the link below) but you probably won't qualify.

https://www.disneyconsumerproducts.com/Home/display.jsp?contentId=dcp_home_help_help_become_licensee_en&forPrint=false&language=en&preview=false&imageShow=0&pressRoom=US&translationOf=null&region=0&ccPK=null

You can legally buy a licensed figurine or decopac and use that on a cake without their permission, just not a fondant or BC copy of a character.
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The Bakery Business Perspective
An experimental blog with new content every Tuesday!

Recent Articles: The Magic Pricing Formula • Copyright Law
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The Bakery Business Perspective
An experimental blog with new content every Tuesday!

Recent Articles: The Magic Pricing Formula • Copyright Law
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post #5 of 6
11/15/12 at 1:36pm

I had no idea that you had to get permission regarding using characters.  How about like designer things on fondant?

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post #6 of 6
11/16/12 at 9:46am

You might want to get some odd sized pans (5,7,9,11 inch) because these help to get two tiered cakes closer to the desired serving size.

 

You also need to describe your prices so that customers understand that they must buy a fixed cake size (no 9.4" and 11.35" tiers...) and that the servings might be higher than the exact count they want.   Or else you can bake the tiers slightly thinner so that you receive the correct payment for the amount of cake you have baked. 

 

But on top of the cake, there is the work which may vary far more than the cake amount.  It's fair to have an hourly decorating charge for sculpted and very elaborate cakes.

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