I'm not sure if I'm posting in the right place, but this makes no sense to me.  The last few weeks I've had 3 people cancel their cakes and go out of town.  So Today I finally looked at the ladies website and this is what I found.

Birthday cakes 4'' high

Round- 6''- $6.00/per cake

8'' -$10,  10'' -$15,  12''-$20,  14''-$25,  16''-$30

Wedding cakes 4'' high

Round 6''- $34,  8''-$50,  10''- $64,  12''-$78  14''-$92,  16''-$110

The bigger the cake is the less money she is charging, now I'm not good with math, but her birthday prices don't cover  her cost does it?  No wonder I'm having trouble getting people to spend my ''minimum $2.00 /slice''. 

Those prices are out to lunch!! did she forget some "0" or what?  Around here a 6" round starts at $30-40. I don't know how anyone could cover their costs at that price. hopefully she will figure that out in a fast hurry.  I can't imagine she is licenced and insured for selling cakes.  those costs alone should drive her prices higher than that.  and if she isn't licenced she should not be selling cakes. period!

AWow ! I can't see how those prices cover basic ingredients never mind anything else !!

ADo you have a cottage food law that allows home-based baking businesses? If not, I recommend contacting your local health dept about this person's business, you will be doing both of you a favor.

Can you link us this site? I want to see what a $6 cake looks like...

A

Baking and decorating talent do not necessarily correlate with business acumen, so it's entirely possible that the $6 cake would look and taste just as good as another baker's $40 cake.

AWhat the FRICK are those prices??? Are those bare cakes, or actually decorated cakes??

No, that doesn't make any sense.  My condolences go out to all bakers in your area who were hoping to make a living.  Maybe send her an e-mail with a link to CakeCentral.

Liz

AI'm not kidding these are decorated cakes for this price and trust me I would LOVE to say the name of the site, but I don't want to get myself into any trouble...lol. I have looked at the site a few times today just trying to figure out the prices she has listed and its driving me crazy... 16'' for .30/serving that's just unbelievable!

A

It's true that those prices are not sustainable, but no one can say how long it will take her to realize that. If she continues operating for another year or two, that's a lot of lost orders, and other unlicensed businesses may start popping up at the same unsustainable price point based on her example.

That's ridiculous.  It costs more than that to make the darn cake!

Wow.  That has got to be a misprint.

I wonder if she is a home baker who buys all her ingredients when she does her regular grocery shopping for her family and then considers the $12 she gets paid for the cake all profit and thinks she's doing well.

At any rate, I agree with Jason.  If it's not legal you should turn her in and I would also send her a link to CC.  There's NO WAY those prices are come even close to covering her costs.

ACrazy cheap. There is a person in my town who charges ridiculously low prices. Not as low as OP, but being constantly undercut is frustrating. The whole copyright issue sucks too. Losing business to people who don't care about those laws is rough.

AYikes she really doesn't have a clue about pricing. But then again...there are plenty of people who come on here and ask about what to price. Why bother charging...just donate them!!

I'm not down with the whole "report her to the government." The right thing to do would be to personally contact her first. I feel like some people report unlicensed bakers just to see them get in trouble.

The real crime are those prices.

She may figure the pricing problem out on her own, or maybe profit isn't her priority. (She might not need the money.)  I do not charge a lot right now, because I am having fun and it's a paid hobby (hob-business!)  Actually, many on this website would look at my slightly low prices in shock.  I do always make back my costs and more, but never enough for the hours I put in.  That is okay though, for now, because every second of making a cake is fun stress-relief for me.  I am getting many calls and it's not due to my low prices, it's because people are liking my work.  Eventually I will raise my prices, but for now it's about having fun, gaining a reputation (for my work) and earning just enough to cover costs. 

Happily, and fortunately, I have a wealthy demographic to work with when I do raise my prices.

A

And there's another reason why it may not be possible to wait out the undercutter.

A

We all pay taxes to have an infrastructure for food safety enforcement in our county/state, and it's their job to ensure people are following the rules. Since their resources are limited they rely on citizens to let them know when they need to investigate. In most cases the worst that will happen is they will be shut down and given information on how to operate legally, we're not talking about jail time or even fines here.

Let's say you contact your competitor directly and tell them they are operating illegally. Best case scenario, they will shut down their business and look for information on how to operate legally. Worst case scenario, they will view the warning as a threat, and you just made a new enemy.

I'm legal, forgot to mention that.

A

ATrust me, Norasmom, just because your customer has the money to spend on a product doesn't mean that they will happily pay double or triple of what you are charging when you decide to come up to market level. (a basic model is to charge 3x materials and supplies) You teach your clients how to value your product: you are either the steal or a luxury item. Having money doesn't make someone generous with it.

Jason, I'm not an undercutter.  The nearest bakery that will legally do what I do (fondant, gumpaste, e.t.c)  is 20 miles away and won't deliver.  I'm my own little entity in a way.   But like I said before, my prices will go up.  Learning and getting my feet wet, maybe like the undercutter in the OP.

A

How much are you charging per serving, and what is the market value for similar products in your area?

For cake, $3-$4.00/serving is what I generally charge, but am also going to say my work is not (yet) quite that of some on this website. Cupcakes start at $2.50.  I also do not do wedding cakes.  

Also, sometimes I charge too little for a new design not knowing the work that will go into it.

People can charge whatever they want to, based on their market and costs etc etc. But that woman in the OP's situation is either going to go out of "business" soon or else she isn't running a business and is just doing this for fun. If she's illegal you can turn her in, if she's legal you're pretty much screwed until she either quits or figures out she's losing money and raises her prices. Or maybe she enjoys working for $1 an hour...

Wow, can you even buy a cake for that price in your supermarkets?

AFunniest prices ever.

We live in Michigan, and our superstore charges more than this (which is an hour away).   People are very cheap here, they think they can get a 2 layer cake to feed 100 people for $75.00 MAX.   Which I have no problem sending them to people who will sell them a cake for that price.  I learned along time ago it's not worth the mess or my time to make $20.  

I used to feel really bad when people would go somewhere cheaper,  but not anymore thanks to this site I realized my time is valuable.  :)