How I price my cakes
To begin, even though I went to business school, I do not:
1. Use other cake rates as a guide. To do this I find other cake rates by looking online, calling, or visiting local and nearby bakeries - Yelp is very helpful here! Although full-time bakeries have more standard pricing, some do offer custom cakes and can provide quotes or share their per serving price ranges. While their offerings might not exactly reflect custom cakes, it is a good data point to start with.
3. Adjust the rate to what I feel comfortable. Sometimes, despite knowing what others charge, or considering skills and interest, I sometimes just have to ask myself, am I comfortable making this cake for XX dollars?
- Calculate my ingredients
- Use equations or a spreadsheet
- Have a specific margin or markeup
To me, these things feel so complicated and they really don't help in determining pricing for ‘art’ or skill level as a cake artist.
What I do like to do is the following...
- Use other cake rates as a guide
- Consider my skill and interest as a cake artist
- Adjust the rate to what I feel most comfortable with
For the numbers I am sharing below, please note that the hourly minimum wage in my area (Northern California) is $15 in 2022, I live in the suburbs (not a metro area), and I am a home baker. So let's dive in!
Example: Years ago I was struggling with pricing a detailed 3 tiered fondant wedding cake. I found a nearby retail cake bakery that occassionally made custom and wedding cakes and I emailed them with a picture of my potential customer's design asking them for a quote. I did not tell them I was a cake maker, but I did ask them as if I was a customer.
This cake was all fondant with royal icing details. If I remember correctly, I was considering to charge between $300-$400, and the bakery's quote was about $700-$800). Considering that I don't have as many expenses as a home bakery, and since I was a beginner when it came to royal icing, I quoted the customer $450. The customer decided not to puruse the order, however this was really good data point to see what a 'real' bakery was charging.
Fun fact, for the Teddy cake I made in 2022 shown above, I charged $350.
2. Consider my skill and interest as an artist. To do this I like to ask myself questions like, does this require learning something new? Do I have time for the extra effort to learn? Do I like the cake design? Do I really 'need' the sale? Answering these questions helps me decide if I should charge more or less for a cake.
Example: I got a request for a Lego cake and I was so exciting about the design that I jumped to make this cake. I wasn't sure what to charge, but since I really liked the design idea I charged $100 to get the sale. This cake was super challenging to figure out because I had to actually design a mold to make it happen. Figuring out how to make this cake, and creating it for the first time, was SUPER challenging. When I finished, I literally broke down and cried... I couldn't believe how much work it had taken and how little I had charged.
I reminded myself that I had no idea what I was doing at first so it really was my opportunity to learn. After that first Lego cake I made several more like it that ranged from $250-$350. Although it always felt like more work than I got paid, the experience I gained made it much more manageable. Today, I might quote $500 for such a cake... needless to say, no one orders it anymore LOL. Essentially, sometimes I under price a cake because I really want to learn a new skill, but as I perfect that skill, I move the cost up.
Example: Years ago I was making custom cakes 'full time'. And during this time my family was more dependent on the income. When this was the case, I was more comfortable with lower rates to increase the chances of making the sale. Today, with my full time job, I am not as dependent on the income so I feel more comfortable charging prices that I think more accurately reflect my skills ability and time committment.
Fun fact, I charged $175 for this Pooh Bear cake I made years ago, and today I might charge $350 for this cake.
And finally...
I like to use 'tiered' cake rates. Tiered cake rates allow you to bucket different types of cakes and put a price on that particular bucket. Early in my journey my tiered cakes rates included $40, $75, $120, $150, $175+ buckets, with designs getting more elaborate as the rate increased.
Today, you can check out our tiered rates here on our website. You can see that all of these rates are simple numbers and the cakes are 'bucketed' in the rates I am comfortable with. Essentially, I didn't want to nickel and dime it, I like simplicity, and I like being as transparent as possible.
I realized that I was spending so much time educating customers on cake rates so creating this website really helped people understand what to expect. Once I posted these, I began getting only those customers who serious about ordering a custom cake.
I hope this is helpful to you in your cake journey! Pricing is challenging, but it does get better with time. Please reach out with any other topics you are interested in learning about!
Happy cake decorating :)!
Christie
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