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Cake price research

post #1 of 56
Thread Starter 

just starting out with a home cake decorating business in the UK - just wondering how you all go about researching what others in your area charge for their cakes?  

post #2 of 56

I google "bakeries", click on Google maps, find the bakeries near me and click on their website.  Some have prices, some don't.  Or just visit them, check out their prices, buy a cupcake, decide mine are better and leave. Lol!

post #3 of 56

I don't think this is something that needs to be a 'first' step -  work out your pricing based on all the criteria you have available - your costs, your time, your equipment etc.

 

My cakes are way more expensive than most of my 'local competition' - in reality they are NOT my competition - they just happen to be people that are doing something 'similar'  -  a HUGE difference in product !!

 

Had I used the logic that people on here do - I would be working for peanuts, stressed to the max wondering what I was doing wrong -  I don't WANT to make 50 cakes a week, heck I don't even want to make 5 cakes a week - I am ONE person with ONE set of hands......   I am paid for what I do - for the quality of the ingredients I use - for the finish on my cakes.

You don't NEED to price compare with your local competition....... BUT you do need to do it BETTER !!

A busy cake decorater is not the only sign of a GOOD decorater - it normally means their product is TOO cheap!

A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

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A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

www.facebook.com/applegum

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post #4 of 56
post #5 of 56
It's definitely important to know what the market price is in your area, and that is often determined by what other businesses that target the same customers are charging. As mentioned above, the best way to do this is to search for other local bakeries and see what types of products they offer, how they compare with yours, and how much they charge. If prices are not listed, feel free to call them and get a quote for a theoretical order.

Combine this information with research on what potential customers in your target market are willing to pay for the type of product you offer (again by reaching out to them directly) and you will have a good idea which price points your market will support. If these price points do not result in an adequate profit margin/hourly wage based on your costs and efficiency, you need to reduce costs and/or find a different market.
post #6 of 56

I disagree Jason.

This is only important if you are wanting to run a shop where 'volume' is important

The best advice is to aim to have a 'highly sought after' product - a stand out from the crowd product ...... where people WILL come to find you - where people will pay what you are worth - where individual hand crafted pieces are prized and valued

Sure you will NOT sell 500 pieces per week .... but you won't HAVE to ....  you price your work as to the quality of your product !

You will never soar with the eagles if you think (and price) like a turkey !!

A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

www.facebook.com/applegum

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A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

www.facebook.com/applegum

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post #7 of 56
Quote:
Originally Posted by auzzi View Post
 

http://bsguk.org/phpBB3/viewtopic.php?f=2&t=51887


This link contains some really good advice


 

A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

www.facebook.com/applegum

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A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

www.facebook.com/applegum

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post #8 of 56
Quote:
Originally Posted by ApplegumPam View Post
 

I disagree Jason.

This is only important if you are wanting to run a shop where 'volume' is important

The best advice is to aim to have a 'highly sought after' product - a stand out from the crowd product ...... where people WILL come to find you - where people will pay what you are worth - where individual hand crafted pieces are prized and valued

Sure you will NOT sell 500 pieces per week .... but you won't HAVE to ....  you price your work as to the quality of your product !

You will never soar with the eagles if you think (and price) like a turkey !!

Yep.

 

The only thing I have ever done any form of price comparison with are the cupcakes that I sell wholesale. As far as my cakes go, I have no idea what anyone else in town sells for, unless a client tells me, and it doesn't matter.

I decided what I wanted to get paid by the hour, and charge accordingly. I do know I am more expensive than others in my area, only because I have had clients, and other bakers, tell me.

If you produce a consistently good, custom product, people will come. A cake designer and decorator is entirely different than a bakery, (I have worked in both, rl experience talking here), you are attracted a different type of business.

 

Now if you are wanting to specialize in birthday cakes and cupcakes, comparing prices makes sense. It also doesn't hurt if you are worried about undercutting, but if you set up your pricing structure correctly, and pay yourself at least decently, that will not happen.

post #9 of 56
Quote:
Originally Posted by ApplegumPam View Post

This is only important if you are wanting to run a shop where 'volume' is important

The best advice is to aim to have a 'highly sought after' product - a stand out from the crowd product ...... where people WILL come to find you - where people will pay what you are worth - where individual hand crafted pieces are prized and valued

Creating a product tailored at the high end of the market (premium quality ingredients, complex designs, hand crafted sculpting, etc.) is certainly one strategy, but it can only work if enough local customers are willing to pay for it. For example, if you discover in your research that other local businesses sell similar high-end products for $2/serving and local customers do not have the budget for anything higher, you probably won't do very well.

Knowing market value based on both competitive analysis and customer research is critical regardless of whether you sell one $1000 cake or twenty $50 cakes every week. There is room for differentiation at all price points.
post #10 of 56
The flip side of this issue also applies, even at the high end of the market. If your customers are willing to pay more than you are charging or competitors with similar products charge more than you, you may be leaving money on the table.
post #11 of 56
Quote:
Originally Posted by ApplegumPam View Post
 

I disagree Jason.

This is only important if you are wanting to run a shop where 'volume' is important

The best advice is to aim to have a 'highly sought after' product - a stand out from the crowd product ...... where people WILL come to find you - where people will pay what you are worth - where individual hand crafted pieces are prized and valued

Sure you will NOT sell 500 pieces per week .... but you won't HAVE to ....  you price your work as to the quality of your product !

You will never soar with the eagles if you think (and price) like a turkey !!

 

Quote:
Originally Posted by ApplegumPam View Post
 


This link contains some really good advice


 

 

While I agree with you that everyone should strive for perfection and to set them selves apart not everyone will be able to attain the level of some of the true artists on this site. It would be great if they could but then it wouldn't be special, would it? Someone has to be average in everything. There is nothing wrong with being average if you are being the best you can be and just settling for good enough. I am not disagreeing with you on any of your points....just saying what came into my mind when I read your post. I also agree that her prices are too low if she is turning business away. Which also makes me think the OP is above average!

post #12 of 56

I don't RELY on local market Jason - never have done - never will

 

When I started cake decorating there were very few of us around LOL  - so there was NEVER any competition - people often had to book you 12months in advance.

It isn't about LOCAL  ... well I am speaking for Australia..... but I guess if it is OK for you to peddle your US based theories to the OP based in the UK I;m guessing mine should be at least carry as much weight.

 

'Custom' anything is NOT about LOCAL  -  they are not something that people WOULD expect to be able to buy on every street corner.

 

It IS something that people will travel out of area for - I deliver some of my cakes 4+hours away (and that is only ONE DIRECTION)

Sydney only has a population of 4-1/2million - spread out over 12,000 ? sq kilometres -   I could probably name 100+ high end cake decoraters - 1,000's of people capable of producing a nice wedding cake and 10's of 1,000s of 'wannabee' cakers with FB business pages  (all of whom could produce great cakes too)

Most of the high end cake decoraters I know deliver ALL over Sydney - they deliver regularly to the Hunter Valley (4+hrs each way) and plenty of them deliver all over the country (by Air-freight)

So, using your theory Jason..... WHO is the local market ??   price comparisons with ??? (who)  - who do ring?

To be quite blunt here ..... I am SICK TO DEATH of having my time wasted by people using this 'shop around your competitors' advice - fake customers wasting my time - more often than not.... FAKE cakers who think they can make a similar cake just by looking at it.... but who dont REALLY know how time consuming it may be.... because they have NEVER done it .... they think I am an extortionist..... but will gladly charge 4 times what THEY are worth - and still undercut me..... BUT the client will not get a comparable product!

I have resorted to charging a 'booking fee' now - to eliminate the time wasters !!

A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

www.facebook.com/applegum

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A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

www.facebook.com/applegum

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post #13 of 56

I read this website to find out what to charge.  I also have emailed bakeries to ask their prices, which many on this website would say is a no-no, as I was "wasting their time. "  I really was not wasting their time, as I have referred people to them when I am unable to fulfill orders.  I feel there's nothing wrong with doing market research to find out about pricing appropriately... 

Also, the nearest bakery that makes the kind of cakes I do is 20 miles away.

post #14 of 56
I don't believe anyone should "rely" solely on competitive analysis and customer research to set prices, but they are important data points to consider as long as you are selling in a country with a capitalist economy. If there's no competition in your market segment then obviously there would be no data from a direct competitive analysis, but you would still be able to get information to help set a lower bound on prices, not to mention customer research.

As you demonstrated, the definition of "local" can vary widely depending on your product, your business practices, demographics, etc. Generally local will refer to customers who purchase from you directly via pickup or delivery. If you sell to a regional market you would probably have limited shipment capabilities and wholesale customers that serve several different metro areas. Selling nationally means that you can ship to anyone in the country, etc.

My emphasis on local research is because most people posting here who have businesses will probably be focused on selling locally, but if you sell regionally and/or nationally then your competitive analysis would simply expand to encompass a sampling of your competitors at the regional and/or national level.

If you don't want fake customers wasting your time, just post your price ranges publicly.
post #15 of 56

I post...... from $150  - 

Which is correct - it goes upwards from there ..... to ????  however much money you have !   I don't have a catalogue of cakes with a 'Pick One' - my cakes are true 'custom' pieces - each designed for THAT particular person - so the price is calculated AFTER design.

THIS fact alone does not stop people emailing with a picture of a cake - saying 'How much for this"?  or telephoning with a detailed description of their cake of choice ... saying HOW MUCH?

 

Yes - these are more often than not ... other cake decoraters!

I guess what I am saying is that your pricing CAN be done without playing stupid games.   We are not merely 'manufacturers' - we are custom artists

I think people today are just basically LAZY - it does take time to work out how much you should charge - I find it puzzling that people would rather come on to a faceless forum where people could be bloody unemployed, nose-picking, failed at everything they ever tried, never made a cake in their lives wannabees - none of us know for sure who is REAL and who is a fictional character built up over many posts....... buy hey.... lets base our pricing on whatever they tell us...  instead of sitting down with a pen and paper and write down all your relevant data - bake some, and bake some more ... keep writing .. keep calculating.... and WORK out what you need to set your price at.....

 

It doesn't matter if Mrs Boogerbrain up the road can sell a cake for half what you can...... maybe she just plucked a price off another dodgy forum......IF you match her price..... you are working for less than you calculated you should be !!

 

The reason prices are coming down..... is market saturation!!!   - so you can only overcome that by being better than average.

 

If you can only ever hope to achieve average and you dont' want to work for nothing...... consider finding another way to earn an income and leave cake decorating as your much loved hobby

 

A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

www.facebook.com/applegum

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A sense of humour is a wonderful thing  - without laughter, the world is a SUPER boring place

PS..... only smart people can read truly WITTY comments and chuckle instead of getting all miffed

Hero of all time - GODOT

 

 

www.facebook.com/applegum

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