To Set Your Cake Prices
By Andreaetta and Vondre' Whaley
The golden rule to remember when pricing your cakes is that no one can bake a cake quite like you. Therefore, what you charge is totally independent of what other bakers charge. However, it is important to do your market research. This information will help you set the best market value for your cakes.
Step One: Call local grocery stores, bakeries, and at 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 X?" Then you need to record it on the cake prices research form.
Here are a few cake products you might want to get pricing for:
A sheet cake
· A birthday cake
· A pound cake
· A wedding cake
Step Two: Calculate Your Actual Cost Per Cake
After completing step one, you should have a better idea of cake prices in your local area. As 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 expertise. However, you should price your cakes according to your area. Here are some things you need to consider:
· 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.
Most people charge 3-4 times what the cake cost 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 strategy 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. I've seen wedding cakes go as high as $7 per slice.
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 make you different:
· Your cakes are from scratch. That's right, most bakeries and even some home bakers are still decorating cakes from out of the box. The mere fact that you are baking homemade cakes from scratch give your cakes a better taste, which warrants a higher price.
· You offer original and customized designs for your customers. You take the time to find out what the client wants and you come to as close as you can to what is agreed upon. Unlike some bakeries and grocery stores who offer template cakes with just a few changes.
· You use secret family recipes with your cakes. This is why your cakes are extremely unique. No one else uses your recipe.
· You offer the best ingredients. Your cake is made with the freshest ingredients and some of them are shipped directly from the manufacturer because you can't get it in stores.
· You 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.
· 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.
Vondre' and Andreaetta Whaley are known as the "Cake Couple." Together, they operate a successful cake business and website dedicated to helping other cake bakers get more customers at http://www.sellcakeslikecrazy.com