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How is it physically possible to charge such a low price?? Help Please

post #1 of 19
Thread Starter 

I quoted a wedding cake buttercream very simple design 3 - tier at $3.00 a serving.  Customer came back and told me they had a quote for $1.45 a serving.  What??? How is that possible, I would be paying for your wedding cake if I charged that. 

 

I told her good luck.  

 

Is my price that far out of range?  I am in the DFW area in Texas.  Now, I am second guessing myself. 

 

Any one have any advise?

post #2 of 19
Either the customer is not telling the truth, or you have local competitors who are running charities instead of businesses.

For the $3/serving cake, how much is your cost, including ingredients, labor, and allocated overhead?
post #3 of 19
Thread Starter 

Jason - Thank you for your reply.  I am fairly new at cake decorating - five years. My basic vanilla recipe and buttercream cakes roughly run me about $1.25 a serving to make.  I am still trying to figure labor and allocated overhead.  How do you know how much time you are going to spend on decorating each cake? 

 

I bake from home under the Texas Cottage Food Law and I just don't know how to figure out my allocated overhead.  Any help you have would be great. 

 

I also have an interview with a local specialized bakery for part time and seasonal help, so I can learn more.  I have complied a portfolio of my work and have my food handlers permit.  Do you have any advice for this?

post #4 of 19
That bride is going to know why you charge more than the other baker on her wedding day when she's looking at the cake wreck she just dropped $50 on. Leave the cheap clients for the cheap bakers.
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post #5 of 19
Check out the Pricing Formula and Allocated Overhead links in my signature below for more info. As for figuring out decorating time, you should already have a pretty good idea of how long you spent on each cake in your portfolio (if you don't, make each one again and time yourself). Based on this information you should be able to extrapolate conservative estimates for new designs.
post #6 of 19

You didn't charge too much, $3.00/serving is reasonable for a simple design, but I wouldn't go any lower...!.  

post #7 of 19
Thread Starter 

I told her get a contract and make sure you see "the baker's" work.  I would hate to be the source of anyone's wedding cake wrecks.  I would never forgive myself. 

post #8 of 19
Quote:
Originally Posted by kerry126 View Post

I would hate to be the source of anyone's wedding cake wrecks.  I would never forgive myself. 

 

This sounds a little extreme. You're running a business, someone asked for a quote, you gave an honest figure. If the bride chooses to go with a cheap baker and ends up with a cake wreck, that was her choice. It's not on you.

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post #9 of 19

She may have found someone to make a perfectly lovely cake for $1.45 per serving. There's no reason to automatically assume it's going to be a cake wreck.

post #10 of 19
She might, but chances are she didn't. Then again there are plenty of decent bakers on here who give their cakes away so who knows.
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post #11 of 19

I'm from missouri and here the most expensive you will find is $3.00 per servings those of us that work from our home charge anywhere from 1.50-2.00 per serving maybe the baker or the bride is from a diffrent area and isn't used to seeing a price set higher than they are used to or maybe this baker is new and is under estimating herself or possibly building her portfolio i do know that from where i am from people who start out price themselves low untill they build a client base thats how the smaller community works. anyhow i believe if you are within the price range of local bakers and the quality of your cakes is that of the local bakers then i would deff keep my prices set. you are going to have some who wont book with you and some who will. also to gain acceptance with wedding cakes have you thought about offering a free small cake for the 1 yr anniversary? that goes over here really good. it makes them feel like there getting more than what they are paying for i hope this has helped and that i havent overstepped boundaries thanks and have a nice day!!
 

post #12 of 19

i think we should encourage everyone to charge a base of $3/serving for tiered cakes. As long as fuel is over $3/gallon and butter $3/lb, it only makes sense. If your skills don't equal $3/serve then maybe it's back to the drawing board until they do.

post #13 of 19
Quote:
Originally Posted by beccaskitchen View Post

I'm from missouri and here the most expensive you will find is $3.00 per servings those of us that work from our home charge anywhere from 1.50-2.00 per serving maybe the baker or the bride is from a diffrent area and isn't used to seeing a price set higher than they are used to or maybe this baker is new and is under estimating herself or possibly building her portfolio i do know that from where i am from people who start out price themselves low untill they build a client base thats how the smaller community works. anyhow i believe if you are within the price range of local bakers and the quality of your cakes is that of the local bakers then i would deff keep my prices set. you are going to have some who wont book with you and some who will. also to gain acceptance with wedding cakes have you thought about offering a free small cake for the 1 yr anniversary? that goes over here really good. it makes them feel like there getting more than what they are paying for i hope this has helped and that i havent overstepped boundaries thanks and have a nice day!!
 

How can anyone make a living selling custom cake for $1.50 per serving? Do they work a lot faster in those areas? Less friction in the air or something? Are ingredients a fourth of the price? I'd love to know how that works.

post #14 of 19
Quote:
Originally Posted by howsweet View Post

How can anyone make a living selling custom cake for $1.50 per serving? Do they work a lot faster in those areas? Less friction in the air or something? Are ingredients a fourth of the price? I'd love to know how that works.

I just looked at the price list form the restaurant supply I buy a lot of my ingredients from, so they are cheaper than grocery stores.

For a 3 tier cake for 100 people, using a super basic marshmallow fondant, shortening frosting, straight cake mixes with oil/eggs/water, not milk or any other add-ins, cake boards, supports and a half price drum form michaels, (lol), it would cost me $66.

That leaves $84 to cover any extra decorations, electric, insurance, licensing, gas, water, advertising, work phone, website, etc etc etc, never mind an hourly wage.

 

I have a friend who lives in rural West Virginia, and every time I visit her I am amazed by how low the cost of living is compared to where I am from, but even there, there's no way $1.50 would make her any money.

 

I'm not trying to sound like a bully to anyone who charges that, but you are coming away with about $20 a cake, if a cake only took an hour start to finish, that would be fine. If you want to sell, and make a viable busniess for yourself, you have to sit down and work all those factors through.

post #15 of 19
There is someone locally advertising $1.00 per slice but when it collapsed, the planner called me begging for a dummy cake for the reception and when discovered it was underbaked, they bought sheet cakes from the grocery store. She used bamboo skewers for support. Just because someone advertises for a cheap amount doesn't mean they can actually make it

You did not charge too little.
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