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Am I charging too much???? - Page 2

post #16 of 30
Quote:
Originally Posted by howsweet View Post

 

  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".

 

Oh, that's my favorite. I had one bride email an amazingly bold letter where she offered to allow me to make her a free wedding cake for the "very important" people who would be at the reception. I'm going to link to it because I can't even start to describe how crazy it was. The point here is that you will NEVER get business from this kind of thing, it will only get you calls from more people who want a low cost or free cake because it will get you more publicity. As a business owner you should donate to causes that you personally support, but don't fall prey to every request that comes your way. Giving away free cakes generally gets you nothing in the way of more business. http://acaketorememberva.blogspot.com/2011/12/my-belated-christmas-gift-to-youan.html

post #17 of 30
Quote:
Originally Posted by costumeczar View Post

Oh, that's my favorite. I had one bride email an amazingly bold letter where she offered to allow me to make her a free wedding cake for the "very important" people who would be at the reception. I'm going to link to it because I can't even start to describe how crazy it was.  http://acaketorememberva.blogspot.com/2011/12/my-belated-christmas-gift-to-youan.html

 

I am familiar with the idea that godparents may volunteer sponsorship of stuff like a dress or the cake or flowers...but this crass commercial stunt disguised as a wedding really takes the cake...

post #18 of 30
Wait - Star Jones got married again?
elsewhere.
Reply
elsewhere.
Reply
post #19 of 30
Quote:
Originally Posted by howsweet View Post

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.


WELL SAID!!!!

post #20 of 30

I agree--you charged too little.  Lesson learned.  I turned down a customer a few months ago because she thought I was too expensive.  I was "sugar sweet" when I turned her down  (no pun intended..icon_biggrin.gif,)  but I knew I couldn't do what she wanted for her price.   It's just me, I can't mass produce, it takes a long time to make an 

 

awesome cake, and we're worth what we charge!!

post #21 of 30

WOW HowSweet

 

You couldn't have said that any better, you made me rethink some things as far as cost. I've always said "well I'm not a professional baker" so I never charged alot but my prices will definitely go up now.  A lady approached me about making a Sweet 16 three tiered topsy turvy cake for Feb. and I was struggling with the price. I tried downloading the openoffice software but once it downloaded I couldn't pull it up. maybe I'll try Cake Boss.

post #22 of 30

I have also instituted a base rate for tiered cakes, because they just don't make me any money under a certain price point.

 

Regarding Costumeczar's outrageous letter, this looks like one of the new 419 scams that has emerged in the last few years. I did receive an email like this when I first incorporated. The poor grammar and spelling is a dead giveaway that it's a scam. Beware bakers. They think you're gullible because you're a small business. 

 

Jen

post #23 of 30

I bought a software called "cake boss".  It makes everything so much easier.  you load your ingredients and supplies, choose how much you want to make per hour and it calculates everything for you.  It pulls your pricing for your ingredients and supplies, calculates the per slice price and boom you have it.  It does everything for you. Add your recipes, keeps track of your orders, EVERYTHING.  It saved me. I was in the same boat as you, always undercharging for my cakes then when I got the software, wow, did it open my eyes.

post #24 of 30
Quote:
Originally Posted by ellavanilla View Post

I have also instituted a base rate for tiered cakes, because they just don't make me any money under a certain price point.

 

Regarding Costumeczar's outrageous letter, this looks like one of the new 419 scams that has emerged in the last few years. I did receive an email like this when I first incorporated. The poor grammar and spelling is a dead giveaway that it's a scam. Beware bakers. They think you're gullible because you're a small business. 

 

Jen

Oh, this was no scam. A bunch of my friends also got the letter, it was handwritten and stamped and mailed locally. A quick facebook search found the bride and verified that she was indeed getting married where she said. The best part was that the bride is a professor at a local community college. So she should know better.

post #25 of 30
Quote:
Originally Posted by costumeczar View Post

Oh, this was no scam. A bunch of my friends also got the letter, it was handwritten and stamped and mailed locally. A quick facebook search found the bride and verified that she was indeed getting married where she said. The best part was that the bride is a professor at a local community college. So she should know better.


You have got to be kidding........  And she is teaching the upcoming generation of citizens.....scary.

post #26 of 30
Quote:
Originally Posted by costumeczar View Post

Oh, that's my favorite. I had one bride email an amazingly bold letter where she offered to allow me to make her a free wedding cake for the "very important" people who would be at the reception. I'm going to link to it because I can't even start to describe how crazy it was.

 

It gets worse.  I had this horrible memory buzzing in my head all day after reading about this brazen and shameless letter. Finally had a chance to google "get your wedding for free" and guess what comes up:

 

http://www.ehow.com/how_2078259_have-free-wedding.html and don't read the related links because they will all make you gag.

 

NO this was not a scam.  It was some person with too much time on their hands looking online for free stuff.

post #27 of 30
Quote:
Originally Posted by BakingIrene View Post

It gets worse.  I had this horrible memory buzzing in my head all day after reading about this brazen and shameless letter. Finally had a chance to google "get your wedding for free" and guess what comes up:

 

http://www.ehow.com/how_2078259_have-free-wedding.html and don't read the related links because they will all make you gag.

 

NO this was not a scam.  It was some person with too much time on their hands looking online for free stuff.

HAHAHAHAHAHAHA! What a ridiculous piece of "journalism." I'd choose a favorite piece of advice but they're all so excellent...I'm posting this on my facebook page, it's hilarious, thanks for sharing the link!

post #28 of 30

The funniest part of your link is that it was written in 2008 when people had money!   Just so we cakers don't think that the poor wedding cake bakers are the only target for these cheapo's, let's propose this advice and let brides suggest this to their dearest and most precious friends who will be standing up with them on their wedding day.  (With the substantial savings on the free centerpieces, they should be able to afford a cake!)

 

How to Get Free Wedding Centerpieces

"Opt to do away with other event extras such as making your bridesmaids pay a high amount for a dress they won't wear again. Ask if they would be willing to chip in to buy or help make the centerpieces. Offer to allow them to wear appropriate dresses of their choice in complementary colors, instead of buying matching bridesmaids gowns. Let them know they can also save their dollars on a big bachelorette bash or any other expensive bridal party plans."

 
Hello, Dearest Best Friend of My Life. 
 
I want free centerpieces for my wedding banquet so I'm going to ask you, my Maid of Honor, and all other bridesmaids who didn't make the cut to get to be Maid of Honor, to each give me... err...."chip in",  the $200 you were going to spend on a dorky wedding dress that you probably wouldn't look good in anyway.  (Those hips and flat chest, ya know?) I'm going to buy some centerpieces with that money.
 
Oh, and by the way....  If you could each give me... err..... "chip in",  an extra $100 (that would be $300 total) instead of throwing the big bacholerette party you've all been planning for years? 
 
Now, of course, my husband-to-be and I will still expect a wedding gift AND a lot of free labor placing those centerpieces and having them delivered to our new home after the event (since we'll be on our honeymoon).   Don't worry about the centerpieces staying fresh.  I've decided I can now afford high-end silk flowers.
 
And the last thing, don't feel like you have to buy a brand new dress in a complementary wedding color (floor length, mauve with white trim on 3/4 length sleeves) for the wedding ceremony.  Just wear any old thing you already own that is mauve with white trim, floor length, with 3/4 length sleeves.  Wouldn't want you to incur any unnecessary expenses for MY wedding.
post #29 of 30

I have to agree with howsweet.  For the past 10 days, I have been producing a holiday product that is in such high demand that I have been turning away customers every day.  In order to meet the price of others producing the same product in this area, I sold it at the price I thought was a little low, but workable.  Turns out I collected about $1300.00 and my expenses for ingredients and boxes etc. were only somewhere between $300.00 and $400.00.  Many of you will consider that a nice profit.  However, I worked more than 90 hours (much of it in the wee hours of the morning in order to have a fresh yeasted product by day).  I had to draft my husband for an additional 20 hours, and a girlfriend for another 3.5.  If I totally disregard overhead--like having to heat the commercial kitchen in the middle of the night so dough would rise and we wouldn't have to work in the cold; plus insurance, licensing, service agreements, rent, etc it comes out to about $8.33 an hour or just under minimum wage in this area.  And it is actually worse than that. As this was the first year making this product, I failed to realize the amount of parchment paper, paper towels, and doilies that got used, so the "wage," in reality is even lower.  Not to mention that the quality of life this week was abysmal with a cranky husband and processed food we could just heat up when I got home late at night instead of having time to cook dinner, make beds, do the laundry, etc.  Hubby's billable rate is usually over $150.00/hour, think he was amused in the middle of the night working for free at a calculated rate effectively less than $8.00/hour?  

 

This is definitely NOT my business model. I actually commented to a colleague that I wasn't in the business to be a public service.  Her thinking is that she IS providing a seasonal product more or less as a public service.  Therefore, despite the laws of supply and demand, which would indicate that one can get a reasonable price for the product, the price is artificially low and demand is through the roof.   I should have calculated this into the equation and stayed out of the market or done some marketing differentiating my version of the product so as to justify a higher price.

 

If I enter the fray next year (and that is in a lot of doubt right now), It will have to be much more worth my while. After the first day, I spent the week feeling like I was losing money on every piece I sold (and making it up in volume, as they sayouch.gif)   Who needs that?!  

 

The best I can say of the experience is that I learned a lot.  Next week back to working on a extended marketing plan which more closely follows my business model.   Turns out that just because there is a demand for a product, it doesn't mean that I have to fill it if it doesn't fit the model.   Pricing needs to take into account a myriad of factors and cost of ingredients is the easiest piece, but the least of it.  A truly rookie mistake!!!  Ugh...


Edited by itsacake - 12/15/12 at 1:05pm
post #30 of 30

That's a pretty interesting assessment, Itsacake!  If we all approached the cake business with some cold hard analysis,  I have a feeling we'd all be better off.  It has taken me a while to reach my target customer, but still I'd say I only get about one customer per six inquiries. That means for each cake I do,  five people either decided they can't afford a high end cake like I make OR they found someone to do it for less. I pity the person doing it for less because I work fast as heck and even with my prices, I still feel underpaid.
 

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