You're not charging enough! Just because people try to bargain with you doesn't mean that you need to agree to it. If you figure out how much you're making after expenses, and how long it's going to take you to do that cake, you're probably going to be making something like $4 an hour. Not cool. If people don't want to pay for a custom cake then they should go to Walmart, they shouldn't expect you to lower your already too-low prices!

You got robbed with this order!!

Whether you are a home baked or a business, NOBODY HAS THE RIGHT TO ASK YOU TO EARN LESS THAN MINIMUM WAGE.

 

And should they try to bargain, you say "the law requires me to be paid minimum wage. No minimum wage, NO CAKE".

When you think about all the ingredients needed for cake plus all ingredients for the butter cream icing, then we have all the ingredients for the fondant, etc. Piping Bags and food coloring paste for the fondant or gumpaste.  Also electricity for cooking the cakes. Then whatever time involved in making your butterflies, bows, etc.  People just don't realize how much goes into making cakes. I didn't even mention cleaning up the kitchen and washing dishes for probably 30 to 40 more minutes after you are done.  Only people who make them really know what is involved. When you add up all of these things together you are spending more than you realize.  Don't sell yourself short!!! You deserve to be paid because your time is valuable and you are making quality cakes!!!

I posted a thread on here a few months back saying how I didn't want to be known as the cheap cake lady it got quite the response . Without going into the whole long story I got taken advantaged of by a lady who's sob story was how she couldn't afford the cake but it was for her daughters 16 th birthday . I ended up making 3, 8 inch cakes and putting them on a stand , plus she wanted 30 cupcakes in two different flavors. Plus I delivered and set them up. I lost so much money on the deal it was crazy and than she had the nerve to call me and ask me to come get my cake stand, she was to lazy to bring it back tome anyways I found out the hard way to stick to a set price per slice if they want a fancy cake that they can't get from walmart than they need to pay for a specialty cake

She wouldn't go to Giant Eagle and try to bargain. when I started baking and selling I would just tell them pay when I deliver the cake. The last cake I made I got paid a week later. Now I ask for half up front and I don't deliver anymore. We may not be professionals but our time is money too. And she never would have gotten a deal like that at any Bakery. not even walmart. LOL

The pp's have touched on the fact that you aren't charging enough in the first place so I won't go into that.

 

I do think it's absolutely reasonable for her to ask for a lower price for a smaller and simpler cake.  Plenty of customers would have just plain asked for a discount or the same decor on a smaller cake (which would be the same amount of work, really).  She knows what her budget is and she's willing to make compromises to get one of your yummy cakes to fit into that.  Sounds like a win-win to me!

OP~~There is a software program called CakeBoss that is highly regarded by many decorators who sell cakes.

On the site there are two superb articles that may prove helpful:

 

"How Much Should I Charge for My Cakes?"

https://www.cakeboss.com/PricingGuideline.aspx

 

"Top Mistakes Made by New Cake Businesses"

https://www.cakeboss.com/TopMistakes.aspx

I would also recommend coming up with a minimum order to protect your time. No $20 orders, that's not worth your weekend.

With the new cottage food laws, lots of ladies baking cakes are undercharging. If they have hopes of one day owning a storefront, they are shooting themselves in the foot by driving prices down.

 

If you simply decide a wage per hour that you want to make and add your costs to that, you become a cake making service, not a cake business. A cake business considers what it costs to pay employees to make a cake and then make a profit on top of that.

 

Your target market is not people who want to pay $40 for a grocery store cake. Nor is it people who want to have a cake lady who makes awesome cakes for really cheap.  Nor is it a person who wants you to charge less because there will be lots of people at her party and, "surely it will drum up business for you".

 

I don't know what level of work you do, but my cakes tend to run between $6.50 and $10 per serving after the artwork is added. I have a minimum order of $150. There will always be people who want to bargain with us.  I had a lady literally start yelling at me on the phone a few months ago when she heard my prices.  I just stayed calm and as polite as I could manage. You have to toughen yourself up a bit, and believe me it will come either by a conscious decision or the school of hard knocks - you're a business woman now...this is not about how sweet you can be. Don't be afraid to let people walk away mad - it's them, not you.