Hello Bakers

I'm doing the math to start pricing my cakes and cookies, I know you need to establish how much you want to earn per hour; however,when you do this, does that include the type of decoration? The reason why I ask this is because sometimes the decoration of the cake takes the most time.... 

I'm confused , help please ! 

I would also like the answer to this question. How does the type of decoration effect the pricing?

Thanks!

AQuick question how do i start my own question please? Thank you

I have a base price for my cakes and then I add upon deco,  Gum paste flowers: roses, peonies, tiger lilies, dog woods are $20 each and then more intensive flowers $30 and up.  I do not charge for ribbon or base piping.  But involved piping and lace I add $10 a tier.  But you also can give a base quote high end and see if that was what there budget looked like.  Then if it was lower just make the less intensive flowers.  Hope this helps.  pricing is really what you want to make and what your customer base will allow for.

`Thank you both for the comments. Pricing cakes is very difficulf for what I've read. There are a lot of details to take into account so you don't undercharge. I wonder, would you rather overcharge than undercharge, or are they both equally bad?

Regarding overcharging... If you are regularly getting lots of customers to pay a certain price for your cakes, by definition, you're not over charging. It's just that simple.  If you're quoting prices that are too high, then almost no one will buy your cake.

Unfortunately, lots of people mistakenly assume that because they don't have customers or the customers they're reaching are balking at their prices,  it means they should lower their prices. What is much more likely is that they haven't reached their target customer. You can't sell $500 shoes to just anyone you meet on the streets and the same is true for cake.

I haven't run across anyone yet that needs to be concerned that they are overcharging.

I use a sort of equation in pricing mine. We have a base price for each size of 4 layer torte (one "tier, i just mean 4 layers of cake and three layers of filling). For example, 6" are 23.99 and 8" are 29.99. Anyway, I start by adding up the base cost of all of the tiers that they need. Then check out the icing. If it's fondant, I charge for that because obviously fondant costs us money. If it's just buttercream, I don't add anything yet. Then the design. I make an hourly wage, so I figure out how long I think it's going to take me to decorate. If you're selling your own cakes, maybe this is why people say you have to figure out a wage for yourself. Add this on and add a profit. If there are things like gumpaste flowers or figures, charge per item according to the time/level of difficulty/any extra costs it will take to make it. For example, most of the small simple animals/characters on cakes i'll charge $25/ea.

so basically, base price + labor + product + additional items.

You know what it costs you then, and can add a profit while being sure you're not going to end up losing your butt off on it.

You'll always get people that are offended by the prices, even if you're being completely fair and on par with local bakeries. They just didn't want to spend that much and they'll always find someone (either awful at cakes or undercharging without realizing it) to make it for them cheaper. I prepare a lower price if possible (less detail, bc instead of fondant, less characters, etc) so if it happens, there's a chance you can still keep the sale. So don't worry, just do you!

So how do you decide how much profit there should be and what your wage should be? If I priced cakes this way, I'd be charging a whole lot less than I do now. Here's why. When you have a cake business not all your time is spent making cakes. At least half my time is spent doing paperwork, taking care of marketing and my website, dealing with inquiries and keeping supplies in stock.

I'm not sure I understand, howsweet. The way I was saying does by no means mean charge less for cakes, it's just a way to calculate all of your costs so that you can decide what to charge in order to make a profit. If I showed a guest a quote and they ask me to break it down, I can't tell them "well you can't take away this cost because that's what I'm charging you to do my paperwork today." If you're trying to make money while you're not making money, then you have to include that in either your labor or base prices for cakes. obviously, you build in profit in all of the aspects. if you're making a fondant rose, it takes you 20 minutes, you make $12/hr so it costs you $4.00 to make it. let's say it's a dollar worth of fondant. so it costs you $5.00 total. you charge $15.00. If a customer ask to make the cake cheaper, you can offer to take away some of the roses, saving them $15 dollars a piece. Now you just made the cake costs less, which is bad, but you can never take away the profit that you've already built in to your cake base price and the labor price. That way at least you have a sale and even if they're not big spenders, you're making money. I mean, I've charged $300 for a 10" cake, but when the customer asks "what?! why is this so much?!" I can show them where they're putting their money and they are usually more content with paying for it. Just like trying to sell $500 shoes, if you just throw a $500 price tag on them, not many will see the value. if you include the fact that they're imported from italy,made with the finest hand sewn italian leather, have 26 swarovski crystals and the buckles are platinum, you're showing them what they're paying for and maybe they'll be more inclined to purchase.

I'm not saying it's the only way to do things and if another way is working out for you, then do it up. This is just one way, but since I've started using it, I've been able to sell expensive cakes and more of them without being embarrassed when they ask why.

I never said you shouldn't know what your costs are. I said they are specifically unrelated to the sales price of your cake. Market price should determine the price of your cakes. Obviously every time I quote a cake, I don't call three bakeries to compare prices. You have to have a system in place to work up quotes. But it needs to be based on market value. If you limit your pricing to what you just described, you will very likely be consistently underpricing your cakes.

And this is really not about what works for one person and what works for another. There is a correct and successful way of doing things.  I can tell there have been lots of times I've used my quote pricing structure and thought, this just doesn't seem like a enough and, knowing what market prices generally are, tack on an extra $25.

Why would you sell a cake for less than market value ? That is throwing away money. I see posts by people worrying about saving $1.20 of cake batter and selling the cake for $50 less than it's worth. That's because costs are over emphasized on this forum.

Maybe it will help to think about this: It may take me 20 minutes to make a rose and you 5 minutes, but the rose's value is unrelated to our individual work speeds. if roses sell for $20 each then that's what you should sell it for.

That was my point. But that you phrased it that way makes my eye twitch. That makes it sound like to do so is optional or something.

AOk, I thought so. Essentially, we're saying the exact same thing except coming from different viewpoints. My prices are the same or very similar to local bakeries. I dont undercharge. Im just trying to explain how I break it down and come up with them. you cant know every bakery standard price for everything off of the top of your head. And some peoples talent is still in the works, leaving them unable to charge bakery prices so its hard to know unless you have a plan. I was trying to be helpful, so if my opinion differs from yours you could always keep it yourself.

I love to make money when I'm not making money, that's how I make a profit every year. And the only thing that your material costs have to do with pricing is that you should know what general percentage of your gross revenue your costs should be.

If you don't add in the time that you spend on paperwork, appointments, shopping etc to the total time that you take to make a cake, you're going to be shortchanging yourself. If I know that I spend approximately three hours per cake on non-cake related activities like paperwork, you bet that's going to factor into the total cost of the cake.

Here's a link to my blog and my thoughts on pricing, of which I have many... http://acaketorememberva.blogspot.com/search?q=pricing

If you don't feel like scrolling through all of that, read this one about what your real costs are. It might make more sense than trying to explain gross vs. net vs. expenses vs. costs vs. making money when you're not making money. http://acaketorememberva.blogspot.com/2012/04/whats-your-real-profit.html

AThank you for continuously emphasizing the work that isn't "hands on" the cake. That is a LOT of time. That must be accounted for.

A

So true! And, I believe, the exact reason why so many do not charge enough for their work.

AI just do cookies (not cakes) and while the cost of supplies is a factor, the biggest factor is time and skill level/design combined with value. I'm going to say the same goes for cakes.

I often see super popular cookiers charging miniscule amounts for their work. And I think to myself, how do they make any money?! There is only so much that you can do in one day, so even if they can fit in 3 orders in a day, they are not even profiting minimum wage.

You have to take an honest account of your skill level and how long it takes you to complete your project and the market value of your product. If you are really slow at making your product, disregard that extra time- just because you're slow, doesn't mean you should charge more. Market value includes the style of your product. Are you doing something unique or are you doing what every other bakery does? When you do something unique and/or build your brand, it increases your value.

Like how I mentioned cookiers who charge way too little but get a lot of sales - there are also cookiers who charge 5 times as much for the same amount of work and are just as in demand. Why? Because they have a unique, distinctive style, they use quality ingredients, their skill level is on par and they've built their brand as a reputable artist.

Hope this helps. And don't feel insecure, it's uncomfortable for everyone starting out when it comes to sales and money ;).

AWow. Well, thank you how sweet. Ive just joined this community and your incessant bullying has lead me to believe that its really not for me. congratulations for being so constructive and I do hope other benefit more from other threads.

My bullying? That's rich - you're the one who told me to keep my opinions to myself. Unbelievable. I believe calling someone a bully when you have no argument falls into the type of fallacy called ad hominem,  In this case, attacking the traits of an opponent as a means to invalidate their argument.

And I suggest you look up the definition of bullying

sugarpuppet Please don't leave the CC community. There are tons of information and Good people here. Don't let one bad experience ruin it for you.

If you feel like someone is intimidating, being rude or bullying you, you should report them by flagging the post. 

If know one has said it yet, WELCOME To Cake Central! I hope you decide to stay 

Bullying is the use of force, threat, or coercion to abuse, intimidate, or aggressively impose domination over others. The behavior is often repeated and habitual. One essential prerequisite is the perception, by the bully or by others, of an imbalance of social or physical power. Behaviors used to assert such domination can include verbal harassment or threat, physical assault or coercion, and such acts may be directed repeatedly towards particular targets. Justifications and rationalizations for such behavior sometimes include differences of class, race, religion, gender, ***uality, appearance,behavior, body language, personality, reputation, lineage, strength, size or ability.[2][3] If bullying is done by a group, it is called mobbing.[4] "Targets" of bullying are also sometimes referred to as "victims" of bullying.

Bullying can be defined in many different ways. The UK currently has no legal definition of bullying,[5] while some U.S. states have laws against it.[6] Bullying consists of four basic types of abuse – emotional (sometimes called relational), verbal,physical, and cyber.[7] It typically involves subtle methods of coercion such as intimidation.

Bullying ranges from simple one-on-one bullying to more complex bullying in which the bully may have one or more "lieutenants" who may seem to be willing to assist the primary bully in his or her bullying activities. Bullying in school and the workplace is also referred to as peer abuse.[8] Robert W. Fuller has analyzed bullying in the context of rankism.

A bullying culture can develop in any context in which human beings interact with each other. This includes school, family, theworkplace, home, and neighborhoods.

There was no bullying or anything like bullying.  I sincerely hope that anyone who even considers the idea that I may have been guilty of bullying, go back and read all of my posts. I guess I should flag sugarpuppet's calling me a bully and "suggesting" I keep my opinions to myself because some people will believe her and not go back and read. That's a really ugly tactic, isn't it?

It's a shame the discussion is brought down to this level.

A

Well, you tried. You gave good info.

AI'm sooooooooooo over people labeling bullying when someone expresses an opinion that's different or not what they want to hear. If your business ideas or practices are WRONG, they are just WRONG. I seriously wonder how some people make it in REAL LIFE when they are knocked down by the TACTFUL opinion of a STRANGER.

We all have opinions to share on this site, cakelove2105 thanked sugarpuppet for hers "Hey ! thanks a lot Sugarpuppet :-) Very Helpful comment :-D" as well as howsweet's "Thank you both for the comments."

You cant make people take your advice over someone else's because you feel it is correct and theirs isn't. THERE IS NO CORRECT ANSWER, everyone's variables are different PEOPLE!

“There is no one formula to use when pricing your cakes. Every area is different. However, as a cake baker, you must charge what you're worth. Regardless of your price, if you bake a great tasting cake and love your customers, they'll become raving fans and beg for more.”

http://www.thepartyworks.com/your-cake-prices-a-949.html

“ No one can tell you exactly how much to charge for a cake. I don’t know your expertise or your clientele. I only know mine and what I can charge here.”

http://www.earlenescakes.com/business09.htm

Pricing your Cakes as a Home Baker 

                        
“The most important thing to remember when pricing your cakes is that no one else can bake a cake like you do. Therefore, what you charge is totally independent of what other bakers are charging. However, it is important to research what is going on in the market with others within the cake world. This information will help you set the best value for your cakes and the time that you put into making them………”

http://thesugarlane.com/pricing-your-cakes-as-a-home-baker/

Is it possible for people to write simply:  ""I disagree."  or ""I strongly disagree"" or ""In my experiences things have been completely opposite to yours""

without casting aspersions?   ♦  Agree to disagree ♦   

And sometimes, with an open mind, you may find that with a bit of a bend on your part, with a reasonable thoughtful consideration as to the facts of the situation and the opinions that are offered to you, they might bring you something useful in the future.  No harm done to listen, and to privately reject the information.