Most of us aren’t too comfortable talking dollars and cents in general, and that goes double for bakers who are just getting into the catering biz. But if you’re going to set a fair price for your cupcakes — one that takes into account your baking costs as well your customers — consider these tips by Juniper Cakery’s Felicity and Krystal.
1. Know Your Costs
It sounds obvious, but it really helps to know how much money you’re shelling out to make your confections. So keep a record and include the following:
Ingredients (eggs, butter, flour, sugar, icing sugar, chocolate, etc.)
- Food coloring
- Flavorings and preserves
- Cupcake wrappers
- Utilities (electricity, gas, etc)
There are also one-off costs you need to write down — the things you don’t have to buy every time you bake but are still part of your assets. These include:
- Cupcake pans
- Decorating tools
- Appliances (an oven, stand mixer, etc.)
- Your car or a delivery van
Tracking what you spend makes it easier to figure out what to charge for each cupcake. Be sure to include your immediate costs, like ingredients and packaging, into the final price. For example, if you only need two eggs for a recipe that makes a dozen cupcakes, just calculate the cost of the two eggs — not the entire box of 12.
2. Consider Your Location
Where you live is going to really affect your pricing. For example, the cost of living, ingredients and overheads in New York City are considerably higher than in, say, Des Moines. So don’t charge big-city bucks if you live in a less-populated area, no matter how cool your cupcakes are.
3. Survey the Market
Check out a few bakeries in your area. Go for ones that seem similar to yours — they cater the same type of events, say, or they also appeal to hipsters. Test-taste their cupcakes and ask yourself if what they’re charging makes sense for their goods. Do your cupcakes taste better? Do you use higher-quality ingredients? Be honest and then set your prices accordingly.
4. Know Yourself
And as long as you’re being honest, ask yourself if you need to boost some skills. If you’re in your comfort zone piping buttercream cupcakes, but way out of your depth with fondant toppers , then practice until you can crush any type of topping. You can’t expect people to pay good money for less-than-impressive work.
5. Don’t Undercut the Competition
Not only is that really not good business, but it’s also going to drive you insane. Once you start, you’re always going to work for much less than you should. You’ll also get a reputation for being cheap, which (trust us!) is something no business owner wants to have.
6. Stick to Your Guns
Juniper Cakery still gets the odd customers who like to name their price, haggle or ask for a discount. The response: No way! Baking is based on time and mad skills, so don’t brush them off. Besides, why should someone get a cheaper order just because they asked? That’s not fair to other customers and it’s definitely not fair to you. And while you’re at it, say “no” to unreasonable requests too — sometimes, they’re just not worth it.
Now you’re probably ready to work on your prices. But if you still need a starting point, try this: Set a base price of $2 to $2.25 for a standard-size cupcake. Of course, this depends on your ingredients and your market. If you create higher-end cupcakes in a major metro area, you probably can (and should!) charge more.
Photos by Juniper Cakery