underpricing??

Yup - you're underpricing. Start out with close to what you plan to charge later on. If you feel you need to give a discount in a specific case because you're trying something completely new, make sure you tell your customer you're doing that so they know it's lower than what they would otherwise be paying.

What kind of bakery is it that prices so low? Are you in a small town? That makes a difference a lot of times. I charge $20-25 for my 8" depending on what kind of cake and filling they are, $30 for a basic 11x15. Rule of thumb seems to be take your actual cost and multiply by 3. Good luck.

Ali

I just charged $25.00 for a basic 11 x 15, but that was for the DH's work and it was nothing fancy, just a border and some rainbow sugar. Raise your prices a bit and be comfortable knowing that your cakes are worth it.

Oh, character cakes start at $35.00.

check around yr local area and see what they are charging.. if ur over priced some ppl might not come to you.. so id check around.. i know that if i sold a character cake at 35.00 id be laughed at and no one would buy from me

I've been looking around the web of late and I did note on some other sites the idea that it's not a good idea to charge too little/ less than the local bakeries for your custom cakes. Here's the sense I got from reading those pages. Important: note that prices mentioned below are purely for examples only, not actual recommendations. Check local bakeries for the price levels in your area.

- Don't undercut what the local bakery charges - it ticks them off and since they're likely much better established when you're starting out, they can get nasty and badmouth your shop if they feel you're trying to cut into their business. Never badmouth other shops, BTW. That just makes you look petty. Like your mom said: "If you can't say something nice..."

- As a specialty cake decorating biz, you're not really competing with your standard bakery - they cannot put the same time and effort into building a huge fancy cake; they exist on good, plain cakes, pumped out by the dozen, they can't put the time into one cake like you can. USE THIS TO YOUR ADVANTAGE. Befriend the local bakery, send people who want inexpensive cakes to them (tell them to mention you sent them) and hopefully, they'll refer you to those who want cakes a few notches higher than what they can produce. Remember, you're not in the same business. They're pumping out dozens of cakes & pies each day, plus cookies, muffins, bread rolls and so on. You make custom decorated cakes that carry a price worthy of this dedication.

-If you charge less than the local bakeries do, people will expect less. These are not the people you really want to target as your customer base. Your stuff should be better than "average" and therefore demand a better price. If YOU don't think your product is of a higher value, why should your clients? Aim a little higher.

-Give discounts only when you feel it's really worthwhile, don't start too low or you'll have no lower prices to offer. No one will be too excited to get a $15 cake for $12 - including you if it starts to actually cost you to give it at that price. Don't give away the shop. They'll be wowed to get a $45 cake for $29 though. Donate a $45 cake to the local fundraiser, let people know it's worth that. If it's a well done cake (taking several hours to make & decorate) you may pick up clients who are willing to pay that for their son's 12th birthday. If someone wants that $15 cake, send them to the bakery with "They make a very nice chocolate cake for that price! Don't forget to tell them I sent you."

Juts a few ruminations based on what I read elsewhere.

Ok, I live in Texas.. I priced the cakes from SAM'S (walmart) and they have a full sheet for 30 bucks.. They were decorated differently.. But they did have some plastic decorations with known characters.. I charge 35.00 for 11X15 any character on it. I fill mine.. I don't think sams comes with a filling.. I feel like I am a it high priced.. hmmm What do you think? I believe 11X15 is considered half sheet..

I'm still struggling with pricing, too. I never know how miuch will truly give me a profit once you calculate materials, then time, wear on appliances, etc. And you're providing a service that is truly customized, different from the average supermarket bakery. At the same time, I don't want to overcharge.
A discussion thread on another site put it like this. This is not grandma's heart medicine. It's cake. People don't need cake, they want it. If people balk at your prices, obviously they don't want a cake that badly.
Just something to think about.

I'm in this same boat. I'm doing an 11x15 with an open book pan on top of that for Sunday night for my church to feed $125. I have no idea what to charge. If I went even with $1 per serving its way more than what Walmart would charge. My cake will be much more elaborate and definitely taste better....but still its hard to know exactly what to charge in cases like this.

I've been having the same problems. Lots of walmarts and sams around here. but i've just gotten to where I charge $1.50-$3.50/slice (which is compartive to the bakerys around here....NOT walmart!!). And like goodcakefairy said...if they want it...they'll pay for it. The first couple times I quoted someone a price of $40 for a 10'round (which was still under my $1.50 base b/c it was for someone I know)....I thought they would laugh at me...but they bought it & gave me a tip!!!

Now that i've done it a few times and people actually pay me what I'm asking....it is getting easier to charge what I feel I'm worth!!

for those that don't want to pay what I ask....oh well....they get walmart then.

I'm trying to work out a pricing sheet that breaks down the costs for clients....but i'm going to use per serving. so cake w/filling & bc icing will be $1.50 per serving. Then prices go up from there. so fondant decorations will add $.50-$1.00/per serving depending on type and quantity needed. Wedding cakes will start at $2.50/per serving. This is similar to what other bakerys in my area do.

oh, I've also found it easier to quote per serving b/c if I would say an 8" round will be $$$....then i would get..well how many does that serve. So this way they say...I need it to feed 20 ppl...and I just do the cake in the appropriate size.

Come on you guys!! Haven't you read enough about underpricing to know your cakes are worth WAAAY more than Wal-mart's? So quit comparing yourself to them. There's no comparison!

If people want to pay those prices, let them go there.

My favorite line on this subject was somebody, can't remember who, that told a customer "the only way I can give you a cake for that price is if I went to Wal-mart and got it for you. Even then I would have to charge for time & gas."

That pretty much says it for me.

I know everyone charges differently, but for novelty type cakes I never quite get what to charge. I think star tips deserve more, they take me forever. anyway, i'm doing a soccerball for my neighbors kid, it's wiltons half ball pan that can be a basketball, etc (not the completely round one). i was going to charge $15. I would say i'm in a medium sized market in the midwest. plenty of targets and wal-marts, but not a ton of bakeries. anyway, any thoughts? also, i've been charging about 22-25 for character type cakes that serve about 12.

Well, I have to say, this has been some interesting reading. I've found that I underprice on my round cakes and price just right on others. You all have given some very sound advice. Thanks for helping out.