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pricing

post #1 of 18
Thread Starter 
Fellow bakers.. I NEED HELP. I started my home cake bussiness and I priced my cakes 1.00 a slice for plain buttercream 1.50 a slice for buttercream with fondant decorations and 2.50 a slice for cakes covered in fondant. For some reason people tell me that is too much but mostly family amd friends say its fine. I asked one of our local bakeries that is about an hr from my house and she charged 2.50 for plain cakes so I figured since she had a store front and I'm a home baker that I would charge cheaper. I live in a small town in TN and I know people in rural areas are cheap when it comes to wants and not needs but that being said I looked at a bakery in Nashville TN and they charged $5 a slice with a minimum on cake orders.. I need y'alls input bad.. PLEASE!icon_sad.gif
post #2 of 18

You are brand spankin' new on these forums, so take a minute to use the search function and you will find literally hundreds of threads on this topic.

 

Threads about pricing are somewhat of a hot button issue on CC since every since person makes a new thread and doesn't utilize all the information already readily available.

 

Good luck

post #3 of 18
Thread Starter 
I was hoping for help from somebody in a rural area. I looked at most of the threads but I didnt see any that catered to rural areas.
post #4 of 18

All the other threads still contain information pertaining to proper pricing no matter where you are.

 

It all boils down to that cake is a LUXURY item, not a necessity.  You may be in a rural area, but that definitely doesn't mean that you price yourself in to a hole.

 

First things first is you need to price out all of your ingredients (cost per oz of flour?  Cost per tsp of vanilla? etc), then get a real idea of what it costs you to actually produce a cake.  Then you need to account for your overhead costs (electricity, your permits for owning a business etc).  And finally you need to factor in an hourly wage for you, the baker/decorator/business owner.

 

If you can factor all of that in to consideration, and you make a living off of $1.00 a slice, be my guest, but you will burn yourself out for little, no, or negative gain financially.

 

Being a home based business also does not mean that you should charge significantly less than those around you, all that does is throw a wrench in to the entire cake community in your area.  You always want to be on par with those around you but have some kind of unique business model in order to give you a leg up on your competition.  

 

This applies for any area.  Absolutely anywhere.

post #5 of 18

;-D

 
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post #6 of 18

It's a lot of work (and truly annoying!) to figure out how to price you products. But it's far better to learn for yourself instead of coming back here each time you need to price something. I hope you are able to take the excellent advice that TheNerdyBaker gave you. It will also serve to boost your confidence level. 

VISIT US at BAKINGFIX

 

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VISIT US at BAKINGFIX

 

             Bookshelf    Consulting    Classes    Blog    Facebook  

    

 

 

Reply
post #7 of 18
Quote:
Originally Posted by TheNerdyBaker View Post
 

All the other threads still contain information pertaining to proper pricing no matter where you are.

 

It all boils down to that cake is a LUXURY item, not a necessity.  You may be in a rural area, but that definitely doesn't mean that you price yourself in to a hole.

 

First things first is you need to price out all of your ingredients (cost per oz of flour?  Cost per tsp of vanilla? etc), then get a real idea of what it costs you to actually produce a cake.  Then you need to account for your overhead costs (electricity, your permits for owning a business etc).  And finally you need to factor in an hourly wage for you, the baker/decorator/business owner.

 

If you can factor all of that in to consideration, and you make a living off of $1.00 a slice, be my guest, but you will burn yourself out for little, no, or negative gain financially.

 

Being a home based business also does not mean that you should charge significantly less than those around you, all that does is throw a wrench in to the entire cake community in your area.  You always want to be on par with those around you but have some kind of unique business model in order to give you a leg up on your competition.  

 

This applies for any area.  Absolutely anywhere.


Like;-D

post #8 of 18
Thread Starter 
Its hard because all the hobby bakers in my area only charge ing. Cost. Im also a part time worker but I take all my money from cakes and put it in a savings accouny for when I do ooen my bussiness. People just frustrate me. I charge $85 for a cake like on my profile which is a 8" & 6", buttercream icing with fondant decos and this other women wanted one and she said it was too expensive and she could get one for $60.. sorry for starting a new thread I was just wondering if people had the same problems in rural communitues as I do.. I just wish $250, 000 would fall out of the sky into my hand.. LOL
post #9 of 18
Quote:
Originally Posted by Sweet T 37051 View Post

Its hard because all the hobby bakers in my area only charge ing. Cost. Im also a part time worker but I take all my money from cakes and put it in a savings account for when I do open my business. People just frustrate me. I charge $85 for a cake like on my profile which is a 8" & 6", buttercream icing with fondant decos and this other women wanted one and she said it was too expensive and she could get one for $60.. sorry for starting a new thread I was just wondering if people had the same problems in rural communitues as I do.. I just wish $250, 000 would fall out of the sky into my hand.. LOL

 

People have these same problems everywhere and in every industry. That's why you have to create a business plan. That's your guide for operating your business. You might have to be competitive with local pricing, but only you can know what your service is worth. You should consider that you are already in business, the only difference is that someday you may be a bigger business than you are now. You've got to have a plan. HOw else will you know if it's worth it?

post #10 of 18
Quote:
Originally Posted by Sweet T 37051 View Post

Its hard because all the hobby bakers in my area only charge ing. Cost. Im also a part time worker but I take all my money from cakes and put it in a savings accouny for when I do ooen my bussiness. People just frustrate me. I charge $85 for a cake like on my profile which is a 8" & 6", buttercream icing with fondant decos and this other women wanted one and she said it was too expensive and she could get one for $60.. sorry for starting a new thread I was just wondering if people had the same problems in rural communitues as I do.. I just wish $250, 000 would fall out of the sky into my hand.. LOL


Here is an excellent article :  http://www.cakeboss.com/CakeStuff/Articles/HowMuchShouldICharge.aspx

Excerpt:  "This is one of the most frequently asked questions by cake decorators when they begin to sell their cakes.  The simple but frustrating answer is that no one can tell you how much you should charge.  Setting a price structure is one of the most difficult parts of any business.  As with real estate, the price of cakes varies widely by location and is largely determined by your local market."

 

SweetT~~One of the reasons that rural areas may not charge higher prices is that the rural area is not the ideal geographic marketing location.  There is a reason that Sonic is the fast food option in many small towns.  They got there first, captured the existing market share, and other fast food franchises know small rural towns cannot support TWO fast food franchises and still make a profit; there are simply not enough potential customers.

 

A relative of mine would love to live the rural lifestyle, but works as a researcher in a large hospital and can only find employment in a city.  Small towns simply do NOT have large hospitals to provide employment opportunities for researcher grants.

 

What many cake decorators apparently don't understand is that rural communities are not the ideal marketing location for high-end, custom, luxury items.  Do you have 5 different Lexus/Porsche/BMW/Mercedes/Jaguar dealerships in your County seat?  If not.....why not?   Because they know they cannot sustain their business model in that location.  Same goes for custom cakes.  Just because "other people" are getting $$$$, doesn't mean everyone will get $$$$.  You may make the same exact cake that retails for $3,000 in Manhattan or San Francisco with the same exact ingredients, but unless you have a customer base, marketing efforts, sustained quality, etc., you're not going to get $3,000 in a rural town.

 

BTW~~I'm hoping for that same $250,000 to fall out the sky into my hand.   Hmmmm.....  Your plan of saving seems to be the more reasonable plan.  I wish you well.

post #11 of 18
I probably wouldn't bother then. Keep your day job, make cakes for fun. Your prices are already super low, everyone else charges lower than that, and the people you do get complain and want it for even cheaper? Sounds like the market there is poisoned and can't support a legitimate, appropriately priced decorator.
post #12 of 18
And everything else already mentioned, ella, nerdy, apti, great information.
post #13 of 18
Sorry, so you do have local bakeries. I don't know, forge ahead if you want, but I couldn't do it for prices like that and be happy. And if the market just couldn't bear it, I wouldn't bother. Really.
post #14 of 18
Quote:
Originally Posted by Sweet T 37051 View Post

Its hard because all the hobby bakers in my area only charge ing. Cost. Im also a part time worker but I take all my money from cakes and put it in a savings accouny for when I do ooen my bussiness. People just frustrate me. I charge $85 for a cake like on my profile which is a 8" & 6", buttercream icing with fondant decos and this other women wanted one and she said it was too expensive and she could get one for $60.. sorry for starting a new thread I was just wondering if people had the same problems in rural communitues as I do.. I just wish $250, 000 would fall out of the sky into my hand.. LOL

Are you friendly with, or would you feel comfortable approaching, any of the hobby bakers you speak of?

 

If you are, figure out all of your costs like others have said, and give them a call.  Arm yourself with knowledge and help them understand that you can actually MAKE money doing cakes, not just providing a luxury service for next to nothing. 

 

Might sound bold, but the only way you are going to make change is by educating them as to how much it actually costs to buy the supplies per cake, plus your labor. If you can collectively agree to all raise your prices (enter unicorns and rainbows), the rest of the community won't have anywhere SUPER CHEAP to go to get custom cakes.  They pay more or they go to Walmart.  If they ignore you, screw them and raise your prices anyway....just make sure you have something to offer that they don't.  And I don't mean giving away free cake bonuses if they hire you.  I mean unique designs and skills and flavors that they don't have.  You don't have to raise it drastically overnight, but gradually.  Maybe $.25/svg every couple months?  That's something you would have to work out.

 

One BIG thing to take into account is the varying degree of skill that decorators have.  

 

Get some advice on the Peer Review Cake Club here for ways to improve your cakes, if needed.  Be the best that you can be...be the one out of the hobby bakers in your area that your community is talking about.  Make some kick-a$$ dummy cakes to use for marketing (FB, website, events you may go to).  Sure, they may say "she's a little pricey, but she's really good" but customers who value great taste and design will come if your work is worth it.   And make sure that it is, indeed, worth it.  Every time.  Don't sacrifice quality for quantity.

 

Before long, hopefully they will be saying "she is worth EVERY penny!"

 

OK...so this sounds soooo darn idealistic and in a real world it's not that easy, but give it time....

 

You mentioned opening a shop someday....the money isn't going to fall on your lap because you're cute!  Get creative and get out there and make it happen!   I know straight up advertising is expensive, that's where some of that creativity comes in!  

 

GOOOOOOOO TEAM!

 

Good luck!!!  If I weren't 40 and festively plump, I would do a cartwheel for you.

Aah, cake. . .the 5th food group!!
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Aah, cake. . .the 5th food group!!
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post #15 of 18
Thread Starter 
Thanks for the advice and pep talk and the thing that sets me off from the rest is I have a diploma in Culinary Arts.
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