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………
Step One: Call local grocery stores, bakeries, and home bakers
The best way to get an idea of what others are charging is to call various places in your local area. This research will give you an idea of what the market is willing to pay. When you call, you simply want to ask, “What is your price for ????” Call around a customer inquiring about an actual cake so that you can get an idea of what they are charging! Its a good idea to get an idea for cakes in Buttercream as well as cakes decorated in Fondant (Sugarpaste)…..then you need to make note of all this info that they give you on paper so that you can get an idea of what others are chargin
Here are a few cake cakes you might want to get pricing for:
· A typical sheet cake (1/4 sheetcakes are the most commonly used birthday cakes in most areas)
· A special occasion cake…. say for example an 8 in round cake in buttercream with icing flowers on it
· A wedding cake –Per serving pricing! Ask what their pricing is for a round wedding cake iced in buttercream for 100 people…… some may give you a base price or a per serving price!
Step Two: Figure out what Your Actual Cost Per Cake is….
For a typical 8 in birthday cake, a sheet-cake and then a tiered wedding cake….
This should have give you a better idea of cake prices in your local area. As I stated earlier, you’ll only use this information as a reference because your cakes are unique and what you charge is based on your time, ingredients, and your expertise.
However, you should price your cakes according to your local area. Just because I may be able to get $6 per serving for a wedding cake does not necessarily mean that is what the local prices in your area will be….to be honest I personally feel that there should be a minimum base price that is universal in the U.S. for things such a sheetcakes, a typical 8in round birthday cake and so on, but cakes can be customized soo many different ways that this would be tough to accomplish.
Here are some things you need to consider for your individual local area!
· Average annual income
Are things higher in your area than most other places? If so, you need to charge more. Do people on average earn higher salaries? If that’s the case, you need to charge accordingly. Do you get the idea?
The next thing you need to do is calculate your actual cost per cake. This includes all ingredients and packing materials such as cake boards, boxes and so on, now don’t forget your dowel rods, the paper you cover your boards with , and ribbon that you may use to trim your board, the glue used to glue the ribbon around the board…..sometimes you don’t realize all the things that are used to do a cake and these things all add up especially these days!
Most people charge 3-4 times what the cake cost them to make.
Here’s another way to come up with your prices.
If your goal is to make $25 on every cake, simply figure your total cost per cake and add $25 to it. This works well for birthday and special holiday cakes.
Wedding cakes are usually sold by the slice and your price is totally up to you, based on your time and expertise.
As you make the decision for what you’re going to charge for your cakes, you need to consider the factors that make your cakes unique. Although, you researched what other bakers charge, their prices should not be the basis of how you set your prices. To put it plainly, they are not your competition. You must think of yourself in a separate class of your own. Here are a few things that could make you different:
· You may offer original and customized designs for your customers. You take the time to find out what the client wants and you come as close as you can to what is agreed upon. Unlike some bakeries and grocery stores who offer mass-produced, templated cakes with a few icing flowers and a border in different colors.
· You may use only family recipes with your cakes. This is why your cakes are soo unique. No one else uses your recipe.
· You may offer the best ingredients. Some even bake their cakes with the freshest ingredients, some only using organic and some of them are shipped directly from the manufacturer because you can’t get them in stores. For example: I use the real Vanilla Bean in my recipes since the taste is soo much better, and when I was selling cakes all the time everyone raved about the fresh vanilla taste in my icings and such.
· You may deliver and set up your cakes. This is a valuable service for those who are planning events such as weddings, anniversaries, and large birthday parties. Be sure you are charging a delivery fee to deliver the cake….also if you are doing a wedding cake and you are asked to cut and serve the cake at the reception that you are charging a fee for this service as well. (Some do ask the decorator to cut and serve but it is up to you whether you want to do that or not)
You offer the best customer service. You listen to your clients and follow-up to make sure they’re satisfied. You build relationships with those who buy your cakes.
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.
You must believe in your decorating ability if you are going to get fair prices for your cakes. If you don’t believe in yourself its tough to expect anyone else to. If you tell yourself you could never charge as much for a cake as so and so, well then guess what you will never get a fair price for your creativity and hard work! You must know that your cakes taste great and look beautiful, then your abilities will warrant being paid a fair price. Have faith in yourself, and your abilities if you have a tough time with this practice everyday by saying people love my work and are willing to pay for my creativity, this may sound weird, but it will help I have had to do this at different times in my life. By doing this everyday you will build your self-confidence and you will come across as a person who deserves to be paid very well for their work.
When someone gives you compliment on your cakes that should show you that your cakes taste great and look beautiful therefore you deserve to be paid for your hard work. Most of us are not used to getting compliments and when we do we are not sure how to take a compliment. Next time someone gives you a compliment remember to politely say, Thank You, I do appreciate it. And know that YOU are a great decorator.
We must remember as home bakers that we work very hard on each cake we create. When you turn on your oven it costs you money, when you are decorating a cake you are not able to spend that time with your family. You should be paid for your hard work. When we hire an attorney or anyone else to provide a service for us we don’t tell them, well you know I could go down the road and get a cheaper attorney, like people say to us often times regarding walmart and other large retails grocery stores. You must realize with every cake your creating it costs YOU in one way or another, maybe the costs are minimal however your time away from your family is something you will never get back. Therefore make sure that you charge for your time to create those one of a kind cakes that most cannot purchase from walmart or other local grocery stores. Just a little something to think about the next time a friend or family member wants a free cake from you!!
What I have done in the past to price my cakes is, called around and got local prices especially local home bakers. I priced my cakes just under theirs in the beginning, and rightfully so, I could only do the basics and honestly was still working on perfecting my buttercream work. Once I gained more experience I priced mine just above theirs, because I could create cakes and do things that they did not such as 3D cakes, my figurines, intricate sugar flowers (which are prices individually from the cake) and so on. Grocery stores do not even come close to the kinds of cakes I can now do so there is no debate with the pricing of these kimds of cakes,
Realize you may get a lot of ohh wow, your prices are too expensive and is there any way that you could give me a discount, I want to do this for my son’s birthday and my car broke down, now I have to get it fixed and so the stories continue……But hang in there you will find those who are willing to pay what you are worth because they recognize the value in the work that YOU do!! Don’t let it get to you, it is not a personal attack on your abilities, people are so used to going to Walmart and paying for a cheaper cake, but if you can educate them and show them how your cakes and your expertise is different from Walmart, people will begin to see the quality that you can offer them..
The world of cake decorating has changed sooo much over the past 10 yrs, now we have television shows devoted to showing the aspects of creating edible works of art. The days of just a few yellow, buttercream roses on a sheetcake are almost a distant memory, people now a days call and say I want the cake I saw on “Cake Boss” thats fine I have told them but I must let you know that the cost of that 3D cake will cost approx. $2000 and they nearly have the big one, lol so I resuscitate them from the You’ve got to be kidding me, for a Cake…. by explaining some of the process it takes to create such a cake , and the time it takes which can be up to 2 wks to pull it all together. It really is about education as I have said before. Even though they see it on TV they do NOT see the entire process, they see the cake being started and in the next segment it is finished…Oh how nice it would be if it were that easy, right….in addition the Cake Boss has several people working on that cake, but when I do a cake it’s just me, myself and I!
FYI….For the past 6 months I have been working on a book for cake decorating that will go into much further detail for pricing cakes, fondant figures, sugar flowers, and more. Included in the book are cake secrets that most are not willing to share with you, as well as info regarding starting a cake business, the needed contracts, forms and many other details that I used in my cake business. Its a must have, full of valuable information that is worth its weight in gold. I hope to have it finished within the next few months. I will let you know when!!
Aa always I pray that each and every one of you are pricing your cakes so you make a profit and will begin to prosper in your business, I wish you the best and may you realize just how valuable you are to the world of cake decorating!!
All my best to YOU!!!!