How do you approach the tricky topic of pricing your cakes?
Have you ever found yourself stuck when it comes to how to price a cake? Well, here at Cake Decoration & Sugarcraft, we've been building your ultimate guide on how to charge for cakes, including a handy cake pricing chart for you to download!
Deciding how to price your cakes, bakes and makes can be a truly daunting task, especially if you are at the beginning of your professional cake career. There are a plethora of elements to consider, alongside dealing with potential clients who seem to think "How much?!?!" is an acceptable response when you quote a reasonable price for a fabulous, bespoke cake. Our key advice is to remember that your time and bakes are valuable! So read on to find out our ultimate guide to pricing your cakes and how to tackle that tricky client who wants to know where their money is going...
When pricing your cakes, it is key to remember that you are worth what you are charging. Many people will complain about cakes being overpriced, from the smallest home baker to big names and brands. Life in Sugar's Laura Dodimead has experienced this first hand...
"How many times has a customer come back to you after you have lovingly spent your time designing, drawing out and concocting the most unusual flavour combination for a cake that is all bespoke, all unique and 100% tailored to them only to be asked “How much? but it’s only cake!”
We've got a handy downloadable chart here to help you decide the general 'price per slice' cost of your cake. While ingredients and individual costs will be totally unique to you and your business, knowing approximately how many servings you can get from different sizes of cake is an incredibly useful starting point.
Now to the nitty gritty of pricing your cakes. As Laura succinctly points out, probably the hardest part of being a cake decorator is how to charge for cakes, especially when you get made to feel like you’re charging too much. Always remember to price your cakes based on their value, not their cost.This notion can be broken down into five essential components when you are considering how to price a cake.
Know your market
Where you are based and where you are travelling with your cakes makes a significant difference. If you are based around London or the South East/West, you will need to charge more for your cakes simply due to the way the economy currently sits, with everything in the South of the country generally being more expensive. So bear in mind that the same cake baked in Sheffield and in London would require different pricing, taking into consideration ingredient costs, petrol costs and so on.
Speaking of petrol, you need to factor that in as well. So, say you are a baker based in Nottingham but creating a cake for a client in London. While your ingredients will likely be somewhat cheaper than if you were sourcing them in London, you will need to factor in the petrol and maintenance costs of transporting the cake such a long distance as well. So, always be aware of your client's location and include this in your price quotation.
Have you considered how to transport a cake? Check out our handy guide on How To Transport a Cake!
Knowing your market also means communication. Set up social media sites immediately and get your name out there - ask for reviews, recommendations and so on. Almost all online shoppers look for reviews now, even when it comes to cakes, so a good online rating is an excellent (and surprisingly easy to get) element to add to your reasoning behind how to price your cake. Why do I cost X amount? Well I'm the best decorator in the area - here's the proof!
Know your competition
So how do you figure out what to charge in your market? Firstly check out what everyone else is doing! The internet is a wonderful place to scope out the competition and find out more about their businesses, methods, ethos and so on. See if they have a generic pricing list and compare it to your planned pricing. Do they charge by hour? Do they break down the costs? Or do they not specify at all? There's no harm in having a nose and maybe firing off a couple of inquiries. Don't be too sneaky about it as that will make you look insincere, but do feel free to ask some basic questions without getting a direct quote and cheating them out of what they will see as potential business.
It's also really handy to develop your own unique value with your competition in mind. What can you offer clients that no one else can? Especially in your area, it's brilliant for your chances of gaining clients to outline precisely what you are doing that others aren't. In this way, you can again back up your reasoning when pricing your cakes. Always outline your expertise, your years in the business, what you have learned and how you work this into your decorating.
Many cake decorators will profess to having the 'IT' factor when it comes to what they can offer a client, offering what others don't - so how do you compete with this? Consider these elements when pitching to a client:
Do you bake from scratch?
This may seem like a silly question to some, but you'll be surprised how often not all cakes are baked from scratch. Many bakers will use packet mixes to save on costs, being able to buy in bulk. We're not saying this is a terrible thing to do, however if you do bake from scratch then it's best to inform your clients as this will factor into how you price your cake.
Quality of ingredients
Do you use only organic produce? Do you use supermarket own-brand flour, or do you source specially-made super soft sponge flour? Do you import anything in specially for your creations? We're not saying any of these ways of working are right or wrong (although we do have a strong opinion on using organic eggs - check out our article on What Do Eggs Do In a Cake?)
Do you shop local?
This can be a really key, unique selling point whether you're creating cakes for clients both near and far. For local clients, knowing that you make an effort to source your ingredients locally will appeal to many, knowing that a little piece of home is in their cake. For clients further afield, it may be a selling point for them to say they have the opportunity to try something new in their cake. Are they a Welsh client looking for special apples in their cake? Well if you happen to be based in, say, Worcestershire, you could brand your uniqueness as including only Worcester Pearmain apples, a traditional and rarely-grown apple outside of the county!
The word 'trendsetter' is thrown around a lot these days and generally you'll find anyone looking for a fabulously decorated cake may just be a big fan of all things on trend! So, do your research, see what's going on in the cake world at the moment. Be prepared to learn something new.
Did you attend art school? Perhaps you're also a skilled calligrapher alongside your cake decorating business? Utilise these skills and shamelessly plug them when advertising your business. Emphasise how your brush painting/lettering/marbling/modelling skills etc. are second-to-none and will help add that extra touch of specialness to your creations.
We cannot stress enough how important it is to build your business up with a strong sense of personality. There are thousands of cake decorating companies out there, all designed to appear minimalist. Now again we're not saying we have a problem with subtlety. The problem is if your business doesn't have something personable about it, something eye-catching, something special, you're going to struggle in the business.
If you look at some of our most successful contributors, they all have super-strong personalities that shine through their business methods as much as through their cake creations. Molly Robbins' unique style, Natalie Porter's tongue-in-cheek company name 'Immaculate Confections', Rose Cake-Diva's unapologetic recognition of being a 'diva' and so on all ensure that these fabulous creators truly stand out.
Know your costs
So now you've scoped out your market, your competition and have an idea of what you may begin to charge for your cakes as a general labour cost, you need to consider your actual costs. There are five key costs to consider here:
Butters, flours, sugars, eggs, oils, flavourings, fillings, etc. The easiest way to work out the cost is to divide the cost of the item, (£1.50 bag of flour for 500g) into 100g, so it will cost £0.30 per 100g (£1.50 divided by 500 equals £0.003 multiplied by 100 = £0.30) if the cakes needs 300g, multiply that amount by 3 (£0.30 x 3=£0.90). From this, we now know that it will cost us £0.90 in flour for our cake. Then repeat this method for every other ingredient. This may seem like an absolute pain, but once you get started you'll start to learn how much to price for each element and amount and it will become less like maths and more like muscle memory!
This includes driving to and from the shops for ingredients, paying delivery costs if ordering in ingredients, actually delivering the cake and so on.
Gas and or electricity, lighting, rent, water (work out from your bills what a day costs and add that to your price). Being self-employed means taking into consideration all of the costs in your life, just the same as if you were looking at a salaried job. Having a reliable income is key to everyone and being self-employed can often mean you have busy periods and quiet periods to consider as well.
Boards, boxes, non-slip matting, dowels, ribbon, pins or double sided tape, tools and cutters. These will need replacing surprisingly frequently when you're a busy baker, to ensure your makes are always of top quality.
Sugarpaste/modelling paste, food colouring/paints, pre-made decorations, dragees, gold leaf, airbrush colours, dusts etc). Many companies do sell in bulk, so it's often work checking out such places to see what might help you in your cake decorating. Having white sugarpaste and a variety of food colourings always around is never a bad thing.
Know your worth
Be totally honest with your clients when quoting. If they have issues with what you want to charge, lay all of the facts out in front of them and explain precisely how your business works and why you work things out in the way you do. While you shouldn't have to lay yourself our like this, unfortunately people not involved in the cake industry don't have the foggiest on what we go through to produce masterpieces for them!
So be clear that you have to factor in a huge amount of elements when pricing your cake, beyond the simple 'ingredients'. Be prepared for someone to quote you how much they saw basic flour costs in their local supermarket and why you think you need to charge so much extra. Educate them (professionally and politely, of course!) and make it clear just how much goes into planning the perfect cake.
Know your profit needs
Every process of making a cake costs you money and as a business you then need to apply those charges to your customer. If you aren’t making a profit then you are not running a business. If you worked for a company you would be salaried or paid an hourly rate, we all work to live so you have to charge accordingly. Being a self-employed baker/cake decorator you don’t get paid holiday or sick pay or pensions; well you don’t get any of those luxuries that you would get as an employee so all this has to be considered. Factor in a small percentage on to each cake so that you will end up with a wage to cover going on holiday or toward a pension.
It’s no secret that cake decorating is a skill, a skill that takes time and something that you have invested time and money learning how to become better and better at. If you were employed by a business, as you learn new skills and progress you would expect that to be recognised through promotions and pay rises. Cake decorating is no different!
We all know this industry is tough and it's a hard slog to make it, so when you are establishing yourself and deciding how to charge for cakes, the above advice is all really worth taking into consideration if you want to be successful.
So, now you know how to price your cakes, feel free to draw out your plans to market your business and pitch a strong argument as to precisely why you cost what you do! Know your market, competition, costs, worth and profit needs and you're on the train to cake decorating success - Choo choo!
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