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Sucker for underpricing! - Page 3

post #31 of 68
Heehee this topic comes up again and again, doesn't it?
First of all, if you don't feel that your cakes are good enough to sell, then don't. Simple as that. I have yet to see even one cake on this site that wasn't, but if that is how you feel, you are putting a lot of energy into something that isn't paying off. Heehee, this is my tough love approach aimed at boosting some confidence into all of you wonderful cake decorators.
I think you do need to have a basics sheet with prices, but remember that anything over and above the basics is extra. That is why I would prefer to go home, calculate the extra work and cost, before coming up with a definitive price. After all, most bakeries will only do set designs, they don't touch custom. Custom cake bakeries, charge a fortune. Hundreds and thousands of dollars, this is what people need to remember.
If your prices are in line with Costco or the Walmarts or other big box stores with in-store bakeries, well your prices are too low. In fact, you would be better off going to work for them because you will end up financially better off, with benefits. You need to remember that they use pre-made frozen cakes and pre-mixed icings in specific colours. and an average of two minutes is spent on decorating the cakes. Plus they get a better price than you would, for the basic components of cakes.
So right off the bat, if you aren't charging at least $5 more than they are for a cake, you are better off not doing cakes.
Yes, some areas have poorer economies, average incomes are lower. But then, when we cannot afford to buy a cake, we tend to make our own don't we? I know I was in that boat too, at one time. You are looking to build up a clientelle that can afford to purchase a custom cake. This doesn't mean that you cannot do freebies or cakes at cost for the people that you choose, just don't advertise at those prices. Also make darn sure that these people don't advertise either or you will get a whole lot of friend of a friend type orders. This is something you need to decide right at the beginning.
When you get into really elaborate designs, fondant and gumpaste decorations, candy melts molded decorations, sculpted cakes, things like these, well these are high end cakes. So then you give a breakdown for all of these extras, based on your cost and your time, the easiest formula is cost times three. Or factoring in an hourly wage, when you make things like gumpaste roses, factor in the minimum hourly wage in your area.
When you underprice you are creating a down the road problem for yourself and for any other decorator that sells cakes in your area. What will happen is when you raise your prices to a more reasonable rate, you will lose your customers. Simple as that. People don't accept a big change. So you have to start off right.
Other than for wedding cakes, I don't consider per serving prices. This can be an issue, for instance someone wants a 3-D Spiderman cake and the actual design serves say, 60-80 people, but they want cake for 10-20. What do you do? You cannot always size down a design. So you set a fee for this type of cake, say $80-$100. Set up standard fees for 8 inch, 10 inch, sheets etc. Then have the extra fees for the added complexities.
Wedding cakes, you set a minimum per serving price, since that is the standard out there. But then you list what this covers, the decorations, the icing, the filling etc. Then you have your fees for the extras.
If you are doing this to earn an income, you need to treat it as a business. When you purchase a winter coat, the store won't lower the price if you complain it is more than you wanted to pay.
Are you going to lose business? Possibly. But you really have to look at the big picture. Personally I would rather do 4 cakes at $60 per cake for a total of $240, than 16 cakes for $15 each for the same money.
Decide on how small a profit you find it worth turning on your oven for. Consider how much it will cost you to replace than oven, your Kitchen Aid, your pans etc., down the road. Figure out your energy costs.
Haha, I know, I nag everyone on this issue but it is really a shame to see so many people that don't have enough confidence in their abilites, undercharging for their valuable time. The customer is not doing you a big favour by ordering a cake from you, you have to get past that. You are providing a service for a fair price.
Hugs Squirrelly Cakes
post #32 of 68
Quote:
Originally Posted by SquirrellyCakes

But you really have to look at the big picture. Personally I would rather do 4 cakes at $60 per cake for a total of $240, than 16 cakes for $15 each for the same money.

Hugs Squirrelly Cakes



Amen sister! thumbs_up.gif

Ok, listen to this one and tell me if my feelings should be hurt....

I have a good friend...she is a cake snob and is always saying she bakes from scratch and that it's cheaper to bake from scratch than a mix which I don't think is true but maybe (I don't want to do scratch). SHe also used to do wedding cakes when they owned a bakery a long time ago.

She asked me to donate a cake to an auction. Which I want to do and already have in mind a cake to make.

Now she calls me up and says that I can't compete with Costco. I am thinking where in the world is she going with this? I said "I know I can't compete with them. I don't try. They get their ingredients way lower than I can. My cakes are homemade and custom made. They do a crappy fast job on the decorating."

She says "no, I mean they use WHOLE INGREDIENTS and real buttercream." I said "no they don't, their icing comes from a bucket and they use a base mix on the cakes" She says they mix it themselves from whole ingredients, which I do not believe for a second. If that's true then I do the same with my box mixes! icon_lol.gif

Anyway, what it comes down to is that she wants to buy a undecorated costco cake and have me decorate it. Then she asked me if I had ever decorated a sheet cake. I said yes (she knows I have I have showed her pics)

I know what she was getting at because I know she doesn't like my icing (it has some Crisco in it but not all). She just didn't want to come out and say this I think. I think she would bid on it at the auction if it had different icing.

Also she knows I am financially strapped right now so it could be that is why she is offering to buy the cake for me to decorate.

I think I will just let her buy the Costco cake, decorate it and donate it. Then do another cake my way. That way she can get the icing she likes and I can do whatever I want. What do you think? I don't want to take credit for a costco cake though, everyone in town will be able to tell by the taste it came from there, especially if it's a big ol' sheet cake. What should I do?


A little background:
She is the friend I sold a black forest cake for her to take to a sick friend. My first mistake was not asking her how much her budget was. After I was done including in the cost of the cake, box and cake drum my expenses alone were about $17. I told her the cake was $40, look at all the shaved chocolate on top, it had ganache in it for goodness sake, LOL. it was two 8" rounds here is a pic:
http://pg.photos.yahoo.com/ph/babybrella/detail?.dir=2afb&.dnm=fb5e.jpg&.src=ph

still working on my drizzling technique though, LOL

She is well off and can afford the cake and she paid me. But later she started telling me she would teach me how to bake from sctrach and I could save money, blah blah. (implying my price was too high) I told her the cost of the box and the cake drum was $10 by itself. It wasn't the mix that was so expensive and I know how to bake from scratch I just don't want to.

The price is for my time and the decorating. Cake is cheap, it's the decorating and talent required that cost's. (I didn't tell her this last part but should have)

Oh dear, I am off on a ramble...thanks for listening. icon_lol.gif
Amy in Alaska
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Amy in Alaska
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post #33 of 68
Well, perhaps Costco varies from place to place, but it is my understanding that they use the pre-baked frozen cakes. And their icing is in buckets and no, it does not include cream at all. Or butter.
Baking does cost more from scratch, quite a bit more depending on what ingredients you are using. For example I use Baker's chocolate, sour cream, butter, cream, whole milk and pure vanilla when I make a chocolate cake. Compared to making a chocolate cake from a mix as directed, for the same size, I am looking at many times the cost. When I make a white cake from a mix I use sour cream, several egg whites, instant pudding and whole milk and add extra vanilla. Again this increases the cost quite a bit.
I think that perhaps because she had a bakery, she was getting her ingredients wholesale and this is where she got this notion.
A word of advice, you don't need a cake drum for a cake like your gorgeous Black Forest Cake, a couple of thicknesses of corrugated cardboard would do. See if you cannot strike up a deal with buying these in bulk. You really only need a cake drum for the much heavier stacked cakes and such.
Your Black Forest Cake was beautiful!
Hhmn, don't know what I would do, I can be a bit of a cake snob too. I wouldn't want to decorate a bought cake and sell it as my own. In fact, when I use a cake mix, even doctored I always tell the people it is from a mix. I tend to prefer from scratch cakes, mainly because I can control the amount of "sweet taste". I also tell them when I use an all shortening icing as opposed to the one I usually use.
Most definitely, a cake mix made at home is going to taste fresher than a cake from a store. And it will be better decorated.
I guess it is up to you. My only concern would be that someone else would buy it or taste it and think this was what your cakes were normally like. But if this isn't going to be a problem, then sure, why not, let her buy it!
Then make one the way you want to.
Hugs Squirrelly
post #34 of 68
Quote:
Originally Posted by SquirrellyCakes

Well, perhaps Costco varies from place to place, but it is my understanding that they use the pre-baked frozen cakes. And their icing is in buckets and no, it does not include cream at all. Or butter.



That is what I thought or at least not fresh like she was saying, LOL.



Quote:
Quote:


Baking does cost more from scratch, quite a bit more depending on what ingredients you are using. For example I use Baker's chocolate, sour cream, butter, cream, whole milk and pure vanilla when I make a chocolate cake. Compared to making a chocolate cake from a mix as directed, for the same size, I am looking at many times the cost. When I make a white cake from a mix I use sour cream, several egg whites, instant pudding and whole milk and add extra vanilla. Again this increases the cost quite a bit.
I think that perhaps because she had a bakery, she was getting her ingredients wholesale and this is where she got this notion.


Yup, that is what I thought too. I told her I thought scratch wasn't cheaper. I do doctored mixes, I add sourcream and other stuff.


Quote:
Quote:


A word of advice, you don't need a cake drum for a cake like your gorgeous Black Forest Cake, a couple of thicknesses of corrugated cardboard would do. See if you cannot strike up a deal with buying these in bulk. You really only need a cake drum for the much heavier stacked cakes and such.
Your Black Forest Cake was beautiful!


Thank you! Yup, I know that now, LOL. That was the first cake I ever sold. Learned a lot from it like to ask what their budget is first thing! Now I use foam core board.

Quote:
Quote:


Hhmn, don't know what I would do, I can be a bit of a cake snob too. I wouldn't want to decorate a bought cake and sell it as my own.


I would do it for my friend, but I agree, I don't know how to get around the fact that people would think I made it. -and I don't want that! It sounds lame to me to say you bought a cake and decorated it. Like your cakes must really suck if you had to buy a costco cake, LOL.

I think I will just tell her no thanks and let her know I am planning on making an orange genoese sponge cake with ganache and chocolate decorations on it. It's in an old issue of American cake decorating. I am going to call it Out of this world cake! (it has planets and stars on it) This also avoids the whole icing issue. So yes, I am planning on making that one from scratch but that's it.

I think I will make a snickers cake too because it's so simple to decorate. : ) And she doesn't have to bid on it if she doesn't want to, geez. It won't hurt my feelings.
Amy in Alaska
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Amy in Alaska
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post #35 of 68
Sounds like you have a good solution.
Haha, by the way, I remember when cake mixes were first introduced in Canada, in the late 50's or early 60's. Actually, they were better tasting then, they didn't taste as sweet. If I didn't know the difference, it wouldn't bother me. But I think nowadays there is a lot more sugar used in things than there used to be. So it becomes a question of having an acquired taste.
Hhmn, wonder if your friend is like some of mine. They are afraid to buy baked goods when they don't know how clean the people were about baking them. Perhaps this is why she prefers to buy from you?
Hugs Squirrelly
post #36 of 68
Okie in Alaska, I have a question for you, really just out of interest. Are things super expensive in Alaska? In our Northwest Territories and the Yukon, the prices are unbelievably high. I was wondering if this is also the case with Alaska.
Hugs Squirrelly
post #37 of 68
Well it depends on where you are comparing it to.

If I compare it to Oklahoma prices then yes it's expensive. (I grew up there and all my family is there) icon_smile.gif

If I compare it to California prices (lived there for a while too) it's not too much more.

I paid $2.99 for a gallon of 2% milk today which wasn't bad. If I buy whole milk depending on the brand it can be anywhere between $3.59 - $3.99

And don't even get me started on the prices of bell peppers, LOL. Green aren't too bad but if you want red or yellow they are like $2 bucks each!
Fruits and vegetables are high and the quality is poor. I don't even buy peaches or watermelons. The peaches smell good but never taste like a peach and go bad before they even ripen, how is that possible??

I once tried to buy a watermelon but when she told me the price of $12 I put it back. Sometimes they go on sale though. And tomatoes have no taste. I miss fresh garden tomatos. When I was home this summer I ate fresh whole tomatos, peaches and watermelon till I made myself sick, LOL.


I honestly try not to look at the prices too much. I am still personally stuck in the 80's, LOL. So I tend to compare it to what I remember it being.
Amy in Alaska
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Amy in Alaska
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post #38 of 68
I was curious because our Northwest Territories and places like Nunavut have extremely high prices, about double and more, than the rest of Canada. The prices are mainly due to isolation and the way a small population is spread out over a large isolated area. But the area is in close proximity to Alaska.
In Nunavut, for example, Cost of two litres of milk: $5.75 that is about the equivalent of two U.S. quarts of milk.
Cost of a loaf of bread: $2.60
Fresh veggies are over the top for costs.
I sympathize with the quality of the veggies and fruits. When I lived in the Timmins area in Northern Ontario, they had one of the very last choices of produce when the grocery stores were purchasing fresh fruits and veggies. Heavens the lettuces were tiny and pitiful and expensive.
Hugs Squirrelly Cakes
post #39 of 68
I am in Juneau which is isolated but a good size city so it's not too bad. (and it's the capital) But other small towns like Skagway and places have it really rough like you said.
Amy in Alaska
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Amy in Alaska
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post #40 of 68
Quote:
Originally Posted by okieinalaska

I am in Juneau which is isolated but a good size city so it's not too bad. (and it's the capital) But other small towns like Skagway and places have it really rough like you said.


I guess I have always wondered when people live in isolated areas, why the rest of the country doesn't absorb the cost so that the prices are fairly consistent all over the country. Haha, that is a bit of a socialist and idealist attitude, I know.
Hugs Squirrelly Cakes
post #41 of 68
Well that doesn't happen, but sometimes other types of assistance do.

For example I think I read some small villages up north don't have to switch yet to a cleaner more expensive type of fuel oil. And sometimes there are other types of things.
Amy in Alaska
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Amy in Alaska
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post #42 of 68
In Canada, our Yukon, Northwest Territories and Nunavut are inhabited mainly by the Inuit people. The population is very small and scattered and isolated. There is a lot of poverty, Some government assistance granted, but it doesn't do much for the financial situation these people find themselves in.
I was curious as to the difference because the areas are so close together. And yet they seem miles apart in terms of quality of living.
Thanks for sharing. How did you end up in Alaska? Haha, or am I being too nosy.
Hugs Squirrelly
post #43 of 68
My husband is in the Coast Guard. We have lived all over.

WE are both originally from Oklahoma then moved to Seattle, WA; back to OK (I finished college) then to Traverse City MI, then Long Beach, CA, then Seward, AK and now Juneau, AK. We are moving next year and the top two places on our list are in MI. Can't wait to find out where we are going for sure. There are no certainties.

: )
Amy in Alaska
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Amy in Alaska
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post #44 of 68
Quote:
Originally Posted by okieinalaska

My husband is in the Coast Guard. We have lived all over.

WE are both originally from Oklahoma then moved to Seattle, WA; back to OK (I finished college) then to Traverse City MI, then Long Beach, CA, then Seward, AK and now Juneau, AK. We are moving next year and the top two places on our list are in MI. Can't wait to find out where we are going for sure. There are no certainties.

: )


I guess that is difficult and also interesting at the same time.
Well, I have been to Traverse City! Used to live in Sault Ste. Marie Ontario, across the border from the Soo, Michigan. We used to spend a lot of time visiting different spots in Michigan. Loved the people there, so friendly and nice!
Hope you like where you end up next. Quite an adventure though, to have lived in Alaska!
Hugs Squirrelly Cakes
post #45 of 68
Squirrelly,
You said it right when you stated that this topic comes up over and over again. The fact is that it's very easy to feel intimidated by the prices from large chains. I already feel it and I haven't started selling as of yet. I'm not sure why I haven't taken that step yet but when I do I don't plan on competing with them. I will be very honest with my clients that my prices may be a bit higher than those chains but I will also make it very clear that the quality of my cakes make up for that.
Hopefully I will open up my own place in the next 5 years so until then I will be working from my home and building my clientelle. Hopefully my plan will work out for me.
~*:.Daniela.:*~
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~*:.Daniela.:*~
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