This is a question that is asked by most cake decorators, who try their luck selling cakes. Setting a proper price structure can be considered to be a tough job for most entrepreneurs since most customers are wary of the delivery charges and could hop on to some competitor offering some freebie along with the ordered item. It is the local market that exactly decides the delivery rates. Small birthday cakes delivered can be charged a small amount of money. With some understanding, it is possible to set the right price for delivering the cake.
Checking the local market will help in getting the answer to this question. However, common problem is of under pricing.
What should new entrepreneurs do to charge or not?
It is quite natural that while beginning a business, most new entrepreneurs tend to feel shaky about their skills and the demands of the clients. It is necessary to value the cakes and price them appropriately and the customers are likely to follow.
Is it proper to price cakes on the ingredient cost times 2 or 3?
It is believed that ingredient times 3 or 2 procedure of pricing is entirely arbitrary, and hence, not rooted to any type of business theory. Sometimes, it grossly under prices the item. The actual price of the cake mostly lies in the invested labour and not ingredients.
Is it ok to price by the cake or serving?
The standard rating method in the industry is charging per serving. Similar to bread by sold by loaf and milk by gallon, cake is priced by serving. A serving chart is to be prepared and stuck with. They are easily found on the net and comparing local rates will help to determine the right one.
Should wedding cakes invite more charges per serving than party cakes?
Many bakers feel that there need to be no price difference in the cakes, whatever is the occasion. Charging more would only allow the potential customers to flee to some other competitor offering high quality cakes at lower prices. However, there are some arguments on charging more for the wedding cake. They tend to require plenty of time to deliver, and in setting up, include more stress. Hence, if the wedding cake is at all to be priced more, the baker is to be ready to face questions from the client as to why the increase in price.
How to understand people would pay for the cake?
It would be wise to do a research in the area and call on the custom bakeries to find out the rates charged by them for per slice for party, sheet and wedding cakes. The prices are to be set close to theirs, or perhaps a bit lesser than them if a client base is to be built upon.
Therefore, with proper research and effective pricing, it is very much possible to enter the business of bakery and reap in the rewards in the long run with a proper pricing structure.