Homemade Cake Pricing

Hello, everyone.

I'm making a birthday cake for some very close friends. But it is part of my business, and they are aware of that. The cake is homemade from fresh ingredients. It's 2 9x13s with a cream filling and chocolate buttercream frosting. Right now, I have put about $24.00 into this in materials and ingredients. I've been charging ingredients-times-2 for what I've sold so far.

Is $47 or $48 dollars too much for a cake that size?

Thanks.

Tags: cake, costs, ingredients, pricing

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Permalink Reply by Claudia Bartow on June 6, 2012 at 6:26pm

Could you call local bakeries and ask what they charge for a cake that size? Be sure to emphasize the "fresh" ingredients part- do you use any special chocolate, vanilla, or other fancy ingredient that adds value? If so, tell them.

I am not a baker (unless you count the Betty Crocker boxes sitting in my cabinet), but $24 does seem a little high for ingredients for someone who does it for a business. Have you looked into any wholesale supply places for bakeries, or at buying supplies online to get them cheaper?

Just a thought. Good luck!

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Permalink Reply by Elmer Querubin on June 6, 2012 at 8:33pm

Vanessa,

The rule of thumb to pricing depends on the market and your cost of the items to make it. Ideally, you want to charge 3 times it costs you. So, if it costs $24 dollars for you to make the cake, then it would be appropriate to charge $72 dollars for the cake. This is not too much, consider the time you put into the cake, use of fresh ingredients, and the fact that it is homemade. You can take a look at ellecake.com. They charge $12-$18 per slice cake with a $600 minimum charge! And, their cakes are wonderful.

In order for you price to work out, you can say to your friends that you regularly charge around $72 dollars, but since they are your close friends you'll give them a friend discount of $48. That's about a 35% discount and your friends will have a perception that you are making a $72 dollar cake. However, make sure you deliver on the cake. It must taste like a $72 dollar cake =). You must be able to tastefully describe the cake, present it beautifully and with pride, and it must deliver on taste. In other words, do your best!

I hope this helps you. I wish you the best success on your business.