Cake pricing can be a real biotch! Seriously. There’s a billion articles and posts about the “correct” way to price a cake. It can become easy for you to sink into a sea of formulas and equations only to realize you still underpriced that cake that took you 40 hours to complete. For real??? How is that even possible?
When I started my business a few years ago I knew it would be a challenge. I was coming into the game when there were already several well established cake bakers in my area. Honestly, I had no desire to make cakes at all. I only wanted to make cupcakes. But I took my first cake order and the rest was history. The one thing that I continue to struggle with is pricing.
Should a birthday cake be priced differently than a wedding cake? Should a fondant cake be priced differently than a buttercream cake? Should a “cutting cake” be cheaper than an actual wedding cake? The list of questions swirling around my head went on and on. I had mastered slaying cake layers and creating the perfect ratio of cake to filling. I had mastered creating perfectly leveled cakes with razor sharp edges. But I was a chump at confidently pricing my own works of art.
Here’s what I learned.
1. There is no “correct” way to price a cake. I know that sounds impossible, but there is some truth here. What I mean here is that there is no single set factor that results in the correct pricing structure or formula. You have to take into consideration several factors. Cost of ingredients and materials, number of servings, hours of labor, delivery, cake stand rentals, etc. All of these should play a part. Do your homework and find a method that works for you.
2. Cake is cake. It really is, no lie. Cake batter for a birthday cake is mixed up and baked the same way it is for a wedding cake. A “cutting cake” is torted and filled the same exact way a wedding cake is. The time it takes to decorate a two tier birthday cake could be just as much, or even more, than the time it takes to decorate a simple 4 tier buttercream beauty. So, why should cakes be priced differently based on the occasion or their intended use?
3. Your time is worth money. This is probably the most important lightbulb moment that I’ve had in my career. If I’m churning out cake after cake and my bank account is growing something is wrong. If I take a payment for a cake and I can’t pay myself an hourly wage and still have a decent profit something is wrong. This is not about price gouging. This is about being sustainable business owners. A business cannot grow and thrive if it’s not making a profit and paying the employees (even if you’re the only employee).
Let's think about this for a moment...
Scenario 1: Client wants a two tier cutting cake for a wedding. There will be other desserts, so this is just for the bride and groom to cut and maybe some additional slices for a few guests.
Q: Should you low ball the price because it’s just a cutting cake?
A: NO, absolutely not. You price that cake just like you would any other cake. But, why, you ask? Because that cake still offers the same number of servings no matter what it’s intended purpose is. You really have no way of knowing if that cake will be sliced up and served to all of the guests or not. Put on your business hat and don’t take it off. You’ll be left with a hole in your pocket because you are still out the materials and time that it took to bake and decorate that cake.
Scenario 2: Client wants a birthday cake for 80-100 guests.
Q: Should that cake be priced less per serving because it’s for a birthday?
A: Did you use different “birthday” ingredients for that cake? Ugh…I know you’re not supposed to answer a question with a question, but trust me on this. Did you use a “birthday cake” oven that uses less energy and time to bake that cake? Did you remove your “wedding cake” decorator hands and replace them with your “birthday cake” decorating hands that don’t have to work as hard or as long? You see where I’m going with this? The answer is still NO. It’s all cake created and crafted the same exact way, regardless of the type of event.
I think you all get the point here. Again, I’m no expert at the cake pricing game. I’m just a cake designer that struggles like so many of you do. I’ll end this with a few of the resources that I found helpful when I decided to get a grip on pricing my cakes for sustainability. I’m not a spokesperson for these businesses, nor do I get paid to endorse them. They are just a few of the options in a sea of options that helped me out.
- Michelle Green has an amazing blog. AMAZING. It’s called The Business of Baking and it’s full of great content. She also has an international business tour. Did I mention she’s just an all around awesome person? I reached out to her via email a year ago with a problem I was having. She was so kind and walked me through it step by step. She even followed up to see how I worked it out. The best person EVER!
- Craftsy is full of lots of resources, including this blog about pricing cakes.