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Poll Results: What do you charge for a PLAIN white 8" two layer cake (vanilla and buttercream with fondant)

Poll expired: Jul 31, 2013  
  • 3% (2)
    $0-$19
  • 3% (2)
    $20-$24
  • 16% (9)
    $25-$35
  • 75% (40)
    Over $35
53 Total Votes  
post #31 of 83
I just googled several nice looking custom cake outfits.in your town, and one of them is $5 to $8 serving to start. So the market is obviously there. Yes, do lots of research and.figure out what will be profitable for you and makes you happy to do the work.
"I can do that, because this is my sandbox and I've got the bullsh*% shovel." ~Dianne Sylvan, Author and Lunatic
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"I can do that, because this is my sandbox and I've got the bullsh*% shovel." ~Dianne Sylvan, Author and Lunatic
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post #32 of 83
Excuse the random periods. Fat thumbs, tiny phone keyboard.
"I can do that, because this is my sandbox and I've got the bullsh*% shovel." ~Dianne Sylvan, Author and Lunatic
Birthday Cakes
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"I can do that, because this is my sandbox and I've got the bullsh*% shovel." ~Dianne Sylvan, Author and Lunatic
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post #33 of 83
Thread Starter 

Thank you for the help. I'll definitely do some more research before I set my prices. I removed the pricing page from my website and added a kijiji ad directed to brides. My only problem is that my storefront isn't open yet - I have my license and I can work in my kitchen in the space, but I won't have my business open for a few more months.

 

Anyways,

 

Hopefully I can iron out the kinks of my small business!

 

Thanks to everyone who helped. I'll keep you all updated.

post #34 of 83
This is where market research comes into play, and why it is so important to identify a competitive advantage and a target market as part of your business plan. Find the customers in more affluent areas (income demographics are publicly available) and target them with ads in their medium of choice.

Another alternative is to look at midmarket customers: people who are looking for simpler, high quality cakes for smaller events but don't have the budget to pay the $6-8/serving an upscale bakery would charge. Many of our customers were in this market and we did quite well...our basic BC 8" round cake starts at $44 ($74 with fondant) and a 12" round starts at $69 ($119 with fondant), at our volume level they were both pretty profitable at these price points even after paying commercial kitchen rent.
post #35 of 83
Quote:
Originally Posted by NSuojhayer View Post

I have reassessed my business plan, come up with a base cost, overhead fee, and labour cost and added a small profit margin and I think I'm okay with having my cakes at $2 a serving (for now..). However, this puts my 12" buttercream cake at $110 ....Yikes. I hope that I can prove to my clients that they truly get what they pay for. I feel more excited to fill an order if I'll actually be paid decently for it.

For relatively simple single tier cakes it may not make sense to stick to the same per-serving price for different sizes. With bigger cakes you may have some room to offer some downmarket options with lower per-serving prices...the marginal cost curve flattens out since overhead is fixed and the increased cost of making larger cakes does not scale 1:1 with increased number of servings.

Work out what your actual cost is for a 12" cake (just ingredients, labor, and allocated overhead) vs. a similar 8" cake, the answer may surprise you.
post #36 of 83
Quote:
Originally Posted by Annabakescakes View Post

I just have to say that an 8" cake for me would be a bare minimum of $78, and most likely more.

That's what my bare minimum price is, too.

post #37 of 83
Quote:
Originally Posted by jason_kraft View Post

For relatively simple single tier cakes it may not make sense to stick to the same per-serving price for different sizes. With bigger cakes you may have some room to offer some downmarket options with lower per-serving prices...the marginal cost curve flattens out since overhead is fixed and the increased cost of making larger cakes does not scale 1:1 with increased number of servings.

Work out what your actual cost is for a 12" cake (just ingredients, labor, and allocated overhead) vs. a similar 8" cake, the answer may surprise you.
They'll be nearly identical. Only difference should be a slightly lower ingredient cost for the 8.
"I can do that, because this is my sandbox and I've got the bullsh*% shovel." ~Dianne Sylvan, Author and Lunatic
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"I can do that, because this is my sandbox and I've got the bullsh*% shovel." ~Dianne Sylvan, Author and Lunatic
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post #38 of 83
Thread Starter 

My ingredient cost is actually triple for my 12" cakes. My 12" cakes are pretty big ... 5-6" high. I've tried making them shorter but to me they don't look as pleasing. And without a sheeter covering them with MMF is a great pain.

post #39 of 83
Thats a tall cake, taller than what is typical, yet you are charging less than what is typical for your area... AZ Couture and I both have taller cakes than norm, but we charge accordingly. We both hate squatty cakes, too.
Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
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Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
Reply
post #40 of 83
To clarify, my prices are lower than AZ's, but her skill and patience is higher than mine also! But I still charge a bit more for my taller cakes than I would if they were squatty, and you should too, since there are more ingredients and labor in a tall cake.


Sorry posting from my android and I hate it! I can't see what I am typing, sorry if it is a mess!
Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
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Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
Reply
post #41 of 83
Thread Starter 

Haha no it's all good! I think I should just hire somebody who can handle the business side of things for me ... Playing around with numbers, while I make cake.

post #42 of 83
Ummm, yeah a jump from an 8 to a 12 is a bit. Maybe an 8 to a 10, that's pretty close.
"I can do that, because this is my sandbox and I've got the bullsh*% shovel." ~Dianne Sylvan, Author and Lunatic
Birthday Cakes
(2 photos)
Birthday Cakes
(2 photos)
Reply
"I can do that, because this is my sandbox and I've got the bullsh*% shovel." ~Dianne Sylvan, Author and Lunatic
Birthday Cakes
(2 photos)
Birthday Cakes
(2 photos)
Reply
post #43 of 83
Quote:
Originally Posted by NSuojhayer View Post

Haha no it's all good! I think I should just hire somebody who can handle the business side of things for me ... Playing around with numbers, while I make cake.

Ontario offers free business consulting at small business enterprise centres:
http://www.ontario.ca/business-and-economy/small-business-advice-support-services-regulations
post #44 of 83
The main issue here is inconsistent sizes, a customer would expect that an 8" round and a 12" round would be the same height unless otherwise requested.

The volume of a 4" high 8" round is 3.14 * 4 * 4 * 4 = 201 sq in. The volume of a 4" high 12" round is 3.14 * 6 * 6 * 4 = 452 sq in, so ingredient costs should be 2.25x higher. The multiple is the same regardless of the height of the cakes, as long as they are both the same height.

An example for very basic BC cakes: let's say allocated overhead is $15 and your wage is $15/hour. If the ingredient cost of the 8" is $10 and the cake requires 1 hour of hands-on time to complete, your cost for the 8" is $10 + $15 + $15 = $40. For the 12", the ingredient cost would be $10 * 2.25 = $23 (rounding up), and if it takes 1.5 hours to complete, your cost for the 12" is $23 + (1.5 * $15) + $15 = $61. Adding a 25% markup for profit to both cakes yields a price of $50 and $76 respectively.

On the other hand, if you are making more complex tiered designs where the labor for larger cakes scales up more quickly (and the targeted customer is used to seeing pricing by serving in the marketplace) then it makes more sense to have a single per-serving starting price for all sizes.
Edited by jason_kraft - 7/18/13 at 9:45am
post #45 of 83
Quote:
Originally Posted by NSuojhayer View Post

as you wish, thank you so much! I wish you all the best as well.

 

howsweet, I think my clients would walk right out of the consultation if I gave them prices like that!

 

Goodness, you cake decorators have amazing work, but how on earth do you find people willing to pay for cakes like that?! Nobody seems to understand the value of an expertly crafted cake. I want to shake up London Ontario and give them a little wake up call.


Plenty would, but most people can't afford custom cake.  The prevailing feeling seems to be that everyone should be able to have these cakes. I can't figure out why. Nobody thinks everyone needs a Mercedes.... Anyway, qualify them before having an appointment.  Before I meet with anyone, I make sure they understand the pricing.

 

I recommend I highly visible website because, unless you hang out at the yacht club, your friends and acquaintances might not be your target customer. If your target customer isn't people who can afford fancy cake, then change your product to suit that target.

 

Btw, sorry about my previous post regarding cake in the UK - I saw London, but not Ontario!

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