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Another Pricing Question

post #1 of 10
Thread Starter 

I am sure this has been answered many times but any help would be appreciated. Pricing is still the hardest thing for me and the busier I get the worse it gets. Do you take the area you are located into consideration when pricing a cake? I am on another site and some of the prices seem outrageous. For example would a cake in Dallas or Houston be priced the same as in a rural area 200 miles from a major metro? Does someone who has a licensed home kitchen charge the same as the fancy bakery in expensive strip mall? I don't want to start any drama as I know some questions do, I really need help. I am doing 12-20 cakes a weeks consistently and am ready to move to the next level but can't seem to get over this pricing challenge. I have been in the catering business for years as a manger so I do know how the business works. The catering prices differ greatly In Colorado Springs and Denver versus East Texas where I am now. So it seems like the cakes would be the same way and is what I have seen when cakes were sold at the catering company I worked for.

post #2 of 10

If you have already established low pricing, it will be harder to move up, but you can do it.  Start now, and add 5 or 10% to all bids you do (or published prices).  Do this again (add another 5 or 10% increase) at the end of October.

 

In most businesses, if you are getting every job you bid or quote, you are priced too low.  Keep raising your prices by a small amount every 6 months or so until you counter some real price resistance.    If you are bringing in more revenue, you can make fewer cakes and realize the same profit.

 

Do you feel like you have become known as the "cheap cake lady"? 

 

Liz
 

Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

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Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

Reply
post #3 of 10
Yes. Area market absolutely influences pricing. Charleston is more expensive than Spartanburg or Griffin SC.

Yes, someone with a home kitchen could possibly charge the same (or more) than one with a retail location. I operate under the cottage food law & charge similar to some of the intown bakeries. The most expensive (and extremely talented) cake artist on town has a commercial kitchen bit not a retail store.

www.VeryDeliciousDesserts.com

https://www.facebook.com/pages/Delicious-Desserts/207874222593145

 

It's never "just cake!"

 

You may get a cake for $way to little but you won't get this cake!

Animal
(4 photos)
 
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www.VeryDeliciousDesserts.com

https://www.facebook.com/pages/Delicious-Desserts/207874222593145

 

It's never "just cake!"

 

You may get a cake for $way to little but you won't get this cake!

Animal
(4 photos)
 
Reply
post #4 of 10
What are you currently charging per serving? What do those prices translate to in terms of your hourly wage and profit margin based on your cost structure? How do your prices compare to your competitors?
post #5 of 10
Thread Starter 

I don't think I have become know as the cheap cake lady but....my cakes are mostly custom cakes our local bakeries won't do. There are maybe 3 people in the area that I have found the even do anything similar to my cakes so I have had a hard time comparing.  Plain round Buttercream wedding cakes are starting at $3 per serving and go up according to flavors shapes deco etc. But I do a lot of fondant, gum paste, rk sculpting, carved cakes etc. I have been raising prices. I have all the basic prices set and are where they need to be but have a lot of trouble when it comes to the gum paste figures, carved cakes etc. The really custom stuff. Maybe it has also been hard because of the two very different markets I have worked in. Thank you so much you have already helped. I always feel better with other opinions.

post #6 of 10
Quote:
Originally Posted by SweetSweetCreations View Post

I don't think I have become know as the cheap cake lady but....my cakes are mostly custom cakes our local bakeries won't do.

 

Have you thought about why your local bakeries won't do these cakes?  Maybe you are in a market where people won't pay the true price for all the work that goes into all of those custom elements.

 

We have a newer local bakery who does IP/copyright infringing cakes, all kinds of fondant figures and deco, and charges barely $1.50 a serving.  She is one of the reasons I don't do novelty cakes. :)

 

Liz

Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

Reply

Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

Reply
post #7 of 10
You need to establish a price for custom gum-paste figures, toppers and such. Keep it separate from your cake pricing. Say someone wants three elements on their cake that is above the standard polka dot or stripe, whatever. Like a bow, a flower and an initial topper. Those items need to be priced accordingly. Or you can come up with a single price overall for anything that has to be sculpted...like say $10 or $15 per item. You can keep your cake pricing the same but realize an increase with the add-ons. Just a thought!

If I am ever on life support, unplug me...

Then plug me back in.  See if that works!

Reply

If I am ever on life support, unplug me...

Then plug me back in.  See if that works!

Reply
post #8 of 10
Thread Starter 

Thank you so much. I charge extra for anything other than buttercream but on another cake site I am on they discuss pricing and some seem really extreme. I order from decopac if clients want anything that is licensed and most start at $3 per serving. I have been charging 15-20 for gumpaste figures. 10 for bows so I think I am on track. Again thank you so much this has helped.

post #9 of 10

I charge a per serving price, then estimate how long it will take to make any extras and the cost of materials.  Then, charge an additional hourly rate for your estimated time.  If it'll take you 2 hours and cost you $10 for supplies, your hourly rate is $20, then the additional cost is $50, above your per serving charge.

"Money can't buy happiness, but it can buy cake and that's almost the same thing!"
www.thecakeboxofjackson.com

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"Money can't buy happiness, but it can buy cake and that's almost the same thing!"
www.thecakeboxofjackson.com

Reply
post #10 of 10
Quote:
Originally Posted by kearniesue View Post

I charge a per serving price, then estimate how long it will take to make any extras and the cost of materials.  Then, charge an additional hourly rate for your estimated time.  If it'll take you 2 hours and cost you $10 for supplies, your hourly rate is $20, then the additional cost is $50, above your per serving charge.

This is how I price also.

 

It isn't always where you live, sometimes it's what the going rate is in your area. It's hard to get more money then what other decorators get for a cake...........even if your quality is higher.

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