Updated: Apr 18
Pricing is among the top 2 concerns when I talk to home baking business owners! I get it, it’s scary!! I had a hard time with it in the beginning too. I would freak out whenever I gave a quote. And with all of the pricing myths, it is easy not to know which direction to go. Now I follow my smart pricing method and I am able to price my treats with ease. Follow these steps to ensure you are confidently pricing in your home baking business. And get access to the exact calculator I swear by.
How do I know how much to charge in my home baking business?
The variables that go into pricing in a home baking business:
When you ask other bakers how much they charge for their items you have to keep in mind there are many variables that go into what someone prices.
Some of the variables of smart pricing are:
Every state and every city has a different cost of living. I live in Southern California where the price of everything is insane. Even if I compared my prices to the central coast they would be very different. If I compared my prices to Arizona the prices would be even farther apart. Where you are located affects the price of your desserts. Keep your location in mind when you hear other bakers share their prices.
-Your skill level
Baking and decorating is an art form and it is something that gets developed over time. As your skills grow so should your prices. Your product is getting better meaning it is worth more. Your customers are paying for a specialized skill that took time to master.
-The difficulty level
This could be two things: It is difficult for you, or it is difficult for others. If you are making something that is going to be a big challenge for you, you should charge more for that. You will be spending time researching how to do it and the process will take longer than if it is something that is easy for you.
If it is difficult for others but easy for you then you should also charge more. You have now mastered a specialty. Anything that is a specialty costs more. A general practitioner does not make as much as a heart surgeon. Being able to do something that most bakers can’t sets you apart and allows for the price tag to go up.
-Cost of goods
When you break down the cost of ingredients per recipe for simple things like a vanilla cake the cost of your ingredients is rather low. The time when I really think you should focus on the cost of goods is when you are using specialty ingredients like pistachios, need to purchase a topper, or need specialty molds. Always include those items in your pricing.
Time is money! When it comes down to custom desserts time is the main thing people are paying for. While an 8-inch cake is more servings than a 6-inch cake it will take me the same amount of time to bake and decorate. Customers are paying for the time it takes to decorate, the time it takes to create fondant figures, do a chocolate drip, etc. It is important to time yourself and see exactly how long it does take you to do different tasks to make sure you are being compensated for your time correctly.
How to price:
The smart pricing method I use has been a lifesaver when it comes to quoting in my home baking business.
1. Create your base pricing
First write down the base prices for each item, undecorated in it’s simplest form.
Ex. 6-inch frosted tier, simple swirl cupcake
2. Create your add-on prices
Then start noting down the price of different decorative elements or specialty flavors. Everything that takes that cake from a simple frosted tier to a custom creation. When doing so you want to think about all the variables we discussed earlier.
Ex. Covered in fondant, dark buttercream, swirls on top
3. Delivery or pick up
If the item is going to be delivered you want to look at the distance that needs to be traveled and charge for that based on your own scale.
Ex. less than 30 min = $50 30min -1 hr = $75, 1 hr - 1.5 hrs is $100 for me.
Let’s do one together
Keep these things in mind when going through and creating your prices.
Your skill level and difficulty:
Fondant, fondant flowers, cake boat with fondant
Cost of goods Ingredients:
Fondant, edible image, figures
From ingredients - frost, color fondant, color the coconut, make the fondant figures etc
Every detail of the order!!!!!!!! EVERYTHING!!
What is the difficulty level of making the boat, flowers, ocean ...stuffff…
What tool can I use to price my cakes?
The easiest way to keep track of these prices and quote future cakes is with my smart pricing calculator.
At the top, I have my base prices and below I have the ad ons that I am constantly adding to as new detail come up. I am able to reference past pricing and easily add up the total for a cake.
I have the columns set up so that you can fill in the quantities of each item and it will automatically multiply and add up the total.
For example, if I have 3 tiers being covered in fondant I would but a 3 next to that collum and it will automatically multiply my assigned value by 3 and add it to the total.
Here is an example of this Moana cake:
This cake is an 8 and 10-inch cake so I filled in a 1 for both of those values.
1 tier is covered in fondant so I put a 1 there.
It has two tiers
I look at the amount of 2D fondant pieces I need to add and group them together for what I consider to be $10 value. Or a bundle. For this cake, I figured that I had about 5 bundles. Meaning there is $50 worth of work in 2D fondant pieces on this cake.
I do the same grouping method for many of the add-ons.
For 3d fondant figures with a pre-made mold, I decided there are 3 bundles.
For 3d hand sculpted fondant figures there is the boat and the flower. I looked at the difficulty and time it will take me and assigned it a value of 3.
There is one printed image on this cake.
There are pre-made figurines.
This cake is covered in dyed coconut to give the moss look. That is not something I don’t do often so I had to add that in and give it a value based on the time it will take to complete it.
The board also is covered in fondant (which I considered in the 2d fondant) as well as buttercream and graham crackers so I assigned a value for that as well.
With delivery, this cake would come out to $515. Now this is frivolous but I like my prices to be an even number so I would round this up to $520.
Now I know this can be a lot to digest but I hope that I made pricing out cakes as easy as cake (wink)
If you have any questions on any of this make sure to leave a comment. If you need a visual demonstration I do have a video lesson on pricing in my class catalog. You can also find my calculator here!