Tuesday, September 13, 2016

What Should I Charge for a Cake??....Cake Rates Continued

So lets get more into cake rates!:)  Just a note that I recommend you use my rate input more or less as a guideline to create your own rates.  The reality is that all of us have unique interests, talents, and abilities and our prices will reflect that.

For instance, I always loved working with fondant so while other bakeries charged a premium for fondant (probably because they preferred to work with buttercream!) my rate was always the same between fondant or buttercream.

Also....ok, I will admit it to you...I don't like to bake.  There I said it!! No really, I don't, I really REALLY don't!  What I love to do is decorate NOT bake.  And my prices reflected just that...cake flavor changes cost extra.

So with this in mind I want to share with you about two very different cake rate structures that I recommend.  The first is 'Just the cake rate' and the second is the 'Per Serving Rate'.  In my business I used BOTH of these.  Here I will go into 'Just the cake rate' and chat about the other in the next post:

Just The Cake Rate

Just the cake rate is the rate you decide to charge for the finished cake without delivery, tastings, cake
stands, or any other charges.  I used this mostly on highly customized cakes.  The reason is because I would get a lot of 6", 8", or 10" cakes that were so highly customized yet were pretty small.  Even if I were to charge $10 per serving, if the cake was only 6 servings, $60 might not even cover half of my time and materials spent on the cake!   These cakes were typically birthday party or other celebration cakes (typically not weddings).  Again, these were highly customized cakes.

To give you an idea, if I had a request for a fondant covered cake with hand cut fondant details on top and maybe some details on the front my cake rate (eventually became) about $125-$150.  This of course was not the rate I started at.  Actually for something like this I started at $75 and I quickly learned that I had paid myself less than minimum wage to produce such a cake!  But it was that $75 cake that helped boost my cake portfolio and showed my potential clients what I could do:).  I could see my client was very happy with her cake so I was able to feel confident and comfortable charging more.

When I used the 'Just the cake rate' I would factor in the number of colors (which I am sure you have figured out takes quite a while to do or costs a lot in material), the number of details and how much time each detail would take, the work-ability of the design, the cake size, and the flavor request.  

ALSO I took into account the typical willingness to pay for custom cake clients in my area.  I live in Davis, California and from my experience the average party cake budget in this area is in the $150 range.  Of course there are heavier and less willing spenders but the average was about $150.  

HOW did I figure that out?...A number of times I was given pictures of detailed cakes and uncertain on the clients budget I would ask them if there was a cake budget that they wanted to stick to.  More often than not the target budget was $150 (and that's pretty much how I figured that out:)).  

But the problem a lot of times was that even at $150 the budget wasn't always enough for some heavily detailed cakes.  In those occasions I would tell the client what they could get for their budget.  I never liked saying 'no' to a client but rather give them options that were attainable to them in their spending range.

Although typically these cakes were mostly small cakes that wasn't always the case.  It wasn't common but occasionally I would get a tiered party cake.  These are little trickier because since they are for parties (and not weddings) again there is a lower willingness to pay by the client.  These clients might be heavier spenders, willing to spend more than $150 on a party cake, however, if you take a large cake and even put them on the low-end cost of a wedding cake a multi-tiered cake can quickly reach into the $300-$500 range.  Since I would quote such large non-wedding cakes again I would ask for desired budget and see how I could meet their needs and budget (for instance maybe there are some styro tiers?).  Also, these clients might want delivery but I would price that separately.  For instance one particular cake was a 3 tier cake.  If it was a wedding cake I would have charged at least $6 per serving which would have included delivery and a cake tasting.  This cake as a wedding cake would have cost about $400, however, because I did not provide delivery ($60 value I had determined) or a cake tasting ($40 value I had determined) the cake rate was $300 (or about $4 per serving).  

And speaking of per serving rates that's what we will discuss next!!:)


Happy Cake Making!

Christie

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