Pricing questions, for first timer/up start beginner

[nightphoenix]

Over the last few months (a year actually) I've been getting suggestions and requests to start selling my baked goods. I've been hesitant, for a number of reasons, but I'm kind of in a position right now to where I may be able to start doing so on a limited basis. However, I don't know where to begin. I've already got 2 orders for Thanksgiving (a pie and a cake) and just did a birthday cake. I know these are very early stages here, but it's a start, and I'd rather start small to "see where this goes"! I also anticipate more for Christmas, but we'll see. Anyways I have no idea how to price anything. I mean I've read some of the threads here and saw anywhere between 50% and 70% mark-up but I'm still lost. Please help.

First, for the time being I'm baking in a commercial kitchen (my Church has one) and for right now it's free of charge, as I've only done 2 things...but obviously if I start using it regularly that will be a cost for me right there. (sorry I don't know the cost as it hasn't come up yet...any idea what a fair price to rent a commercial kitchen say for 8 hours would be????) Second, right now I'm not using bulk ingredients (like 100 lb bags of flour or anything)....but smaller retail bags of flour etc...

And I'm not selling through a store, but basically word of mouth...(like the orders for thanksgiving, people just want a cake) with the potential to sell in a local coffee shop and a local deli/store. But again, what do I charge? Do different types of baked goods have different mark-ups? Cookies, versus pies, and cakes?

I don't want to "under" charge and then when I start renting the kitchen (if that happens) have to all of a sudden mark-up my prices to compensate. And of course buying commercial ingredients as opposed to bulk supplier ingredients probably makes a difference too, but my orders are just too small right now to order 30 pounds of powdered sugar...

Anyways, I don't want to bog down the question with too many variables, but just wanted to paint a half way clear picture here....any ideas suggestions on pricing? One order I have for Thanksgiving is a 3 layer, chocolate torte styled cake with a butter cream frosting...since I would never buy a cake like myself, (as I would just make it myself) so I have no idea what to charge. My ingredients cost came to (I think) around $10 for that cake....but if I add labor, etc...(and take into consideration a future kitchen rental) it seems like it would end up into the mid $20 range....that seems high, but again, I haven't bought a cake in ages, so maybe it's not.

Anyways any help would be greatly appreciated

 

[just jim]

Pricing structures, whether for baking, catering, whatever, have been discussed many times, the search function should help.
Hard to give you a definitive answer with your variables, but you seem to be aware that food costs money.
You now need to put a value to your time.
You need to look into what the charges for the church kitchen will be, not wait until it happens.
As far as your special cake order, call a bakery and act like a customer, find out what they would charge.
You can't do this every time you get an order, but at least you can get an idea of what others charge for this one.

 

[ed buchanan]

Jim is right, Total all you food cost, time spent(labor cost) overhead by the hour if possible.(energy, rent, garbage removal.insurance, packaging, delivery if any etc.) Derive some sought of figure and times that by the % you want to work with. I would sell a quality cake that cost $10.00 for $29.95 in my area.:chef:

 

[nightphoenix]

Thanks guys! I'll continue looking in the archives for more details. And I'll definitely call a bakery or two just to see what they're charging for something similar, just to get an idea. Thanks again!

 

[chefbillyb]

Cakes and Pies » CAROL DELIGHTS HOMEMADE CAKES AND PIES - Cakes and Pies

Hi, Take a look at the pricing on this site. I think the pricing looks spot on with the looks of their cakes. I feel people are requesting your talent so the price should be much higher than the run of the mill bakery................Good luck...........Bill

 

[nightphoenix]

thanks for the links! every little bit of information will definitely help! Looks like a good place to begin. Gonna call a bakery or two today as well, just to see what they charge.

 

[mezzaluna]

I'm sure Ed can get $35 for a pie in Palm Beach, Florida, but I don't think that would fly here in Wisconsin (even in the more affluent Milwaukee suburbs). Here's a link for the prices at a good deli in Waukesha. The chef is a CIA grad, by the way. (He's the guy who bought my rugelach for a while.) I don't know where you are in Wisconsin, NightPhoenix, but I think this would be pretty typical.

Rochester Deli Tortes and Pies He's charging $30 for a whole cheesecake.

 

[just jim]

I think one thing to keep in mind is that while people want your baked goods because they are wonderful, there will be a faction that expects them to be less expensive than a professional's, after all "if I wanted to pay that much I'd go there".
I'm sure many have heard this statement.

 

[dillonsmimi]

You need to get your hands on a serving chart (try wilton.com) as the standard for pricing cakes is per serving. Wedding servings are 1 x 4 inches. Yes that sounds small, but considering that the guest has already consumed drinks, appetizers and a full meal, realistic. All other party type cake servings are a bit larger. I am located outside a huge city with many bakers. I called around, looked at websites and sometimes went in person to get a rough idea of what the competition charges. Do not be tempted to undercut what others charge...if you don't think your work is 'good enough' to charge the same or even a bit more than the others, wait until you have a bit more self confidence. My wedding cakes start at $3.50 per serving for a basic buttercream iced cake decorated with buttercream piping. Fondant starts at $4.50 and goes up from there depending on the difficulty of execution and cost of "extras". I charge extra for delivery if outside a certain area. I do not carve cake ala "Duff". I require a 50% deposit when the contract is signed and payment in full at least 2 weeks before the event. Don't forget to add in the cost of licensing and insurance....

 

[kylew]

As important as what your costs are is to whom you are selling your product. If you are selling to friends and via word of mouth, you may be tempted to keep your prices close to cost. DON'T! People you know will expect "a deal" regardless of the quality of your product. I sold cookies and breads out of my home for about a year and a half. My worst customers were friends and family. Their orders took just as long, and cost just as much, as strangers orders but there was an implied need to discount. I tried to discourage them because I made more money selling to complete strangers.

You need to keep in mind that your time has value. Don;t be afraid to charge for it. You also need to be compensated for the time it takes to pack and ship etc. You are likely to have marketing costs, for me it was maintaining a retail web site, postings on eBay, customer mailings etc. These costs need to be included in your pricing as well.

My food costs for a dozen cookies may have been $1.50 but I had no problem selling them for $9.00. There is also an implied "luxury" with higher prices. This can work in your favor.

If you don't charge enough you will sour on the long hours involved

 

[nightphoenix]

Thanks for the link. I'm in Northern Wisconsin, which is a good tourist area, so some of his prices seem a bit low for my area. ($10 for a pie) But most definitely $35 for a pie would be way too much here. But every piece of information definitely helps me get a general idea.

 

[nightphoenix]

Thanks for the tip! I've already gotten a little bit of that, but nothing too extreme on the cost issue.

One thing I have noticed when I'm selling to people I know is they feel more . . . open, or more inclined to critique items, or give what they see as "constructive criticism". I'm wondering how do you all deal with this aspect? Obviously I'm still extremely small scale, but for example one family I sold a raisin pie to for thanksgiving, gave me some "helpful hints"....afterwards. (they'd never even heard of raisin pie until I told them about such a pie this summer)

two people said "I would prefer the crust edging be a little thinner"....(now this is a big family so it was like 2 or 3 people out of like 8 or 10). But it just seemed a bit, "odd" to me that someone would buy a pie and then proceed to tell me "it was absolutely delicious, but if I had my way I'd do so and so a little different".

I just cannot imagine someone buying a pie or cake from a bakery, then going in after the holiday and saying "it was great but I like my pie crust a little more thin." (of course other people prefer the thick edging)

As for the thin vs thick crust, how could I possibly please everyone? Most people seem to really like my thick crusts (just the edging BTW is thick, couldn't they just not eat it if it was too thick?) It was almost as if they wanted 2 pies...one thin, one thick crusted...If I'm going to take "special" orders shouldn't I be able to charge a premium for that?

Again these were just a coupe people, and everyone said they "loved it", but again, it seemed like a couple people felt more inclined to give me advice for next time than was appropriate simply because they know me. With that said, I HAVE taken this family stuff before for that explicit reason (tell me what you think of this and how it could be improved), but this to me was clearly not the case this time. Obviously I'm appreciative and they certainly meant well. But seeing as how I'm new to this, just how common is this? Do people come into bakeries and do that? Or did these folks just feel like it was more ok because I'm not a "professional"?


Again, thank you for the help. It's sometimes hard to charge something that "feels" like it's too much, but then once the work goes into it I realize it's not over priced at all. A couple of my cakes are pretty labor/time intensive and I doubt most people would put the time in even if they could. But sometimes "guilt" plays a role, so I'll have to keep that in check.

 

[scottc]

Hello All!!! Not sure I am in the right forum or not but, I was wondering if any of you know of a sight or person that you all might use or know someone who has used,for investors? I am looking to open a specialty cheesecake store and also online store too. I would love any feedback you could give me, Thanks !!! I am glad I found this site, it is great !!!

Scott