Published on December 21st, 2018
Have you ever wondered how bakers price their cakes? Does a bakery only charge you for the raw material and ingredients used along with the wages of the baker? You wouldn’t necessarily be far away from the truth.
Those are included, but a number of other vital aspects play a significant role in the pricing of the cakes. These are works of art which are a delicious treat, but let’s admit it, those celebration multi-tiered cakes look marvellous!
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Let’s take a more in-depth look into what goes in the pricing for a cake, be it a traditional or a customized one!
1. Store Location
Well, this one rather obvious. A baker in the heart of a city like Singapore will charge more than one in the outskirts. It is mainly because of economic reasons. All you need to do is a bit of research and looking around to find out the prices and select one that suits your budget.
2. Undercutting The Competition
Cake baking is a competitive market and it is an art as well. No baker wants to undercut the market and sell short even if he is new to the market. It establishes the professional credibility of the baker along with his reputation. Discounts are for special occasions and popular holidays.
3. The Burnout Problem
Baking is a tough job which requires concentration and skill. Like any skilled labour, the wages must justify the end product. If there is not enough remuneration, a baker will suffer burnout, and your favourite bakery might go out of business.
4. Customer Expectation
A baker is usually against selling at cut-rate because once customers get accustomed, it becomes hard to raise the process. It is generally a rule of thumb in this business to attract a specific clientele that pays for quality. Those online 5-star reviews matter.
5. Hurting The Industry
The bakery is an industry of like-minded individuals. Every baker is out to make the perfect cake to bring joy and happiness to someone’s special day. Undercutting one’s competitors by lowering the prices kills their businesses. It additionally reduces costs overall, which is bad for every baker.
6. Not Competing With Grocery Stores
The business of a bakery is not with a grocery store. So, you cannot compare the prices of cakes from a grocery store to a bakery that specializes in customized cakes. The grocery store cakes are generally flash frozen and stay on the shelf for months with a lot of premade icing. They are nowhere near the quality of the cakes from a professional bakery.
7. The Costs
A look at the overall cost for running a bakery will present a clearer picture,
- Overhead This includes the rent, utilities, business cards, office supplies, computer, and advertisements
- Bakery equipment and supplies include a mixer, ovens, tables, pans, bowls, colouring, fondant, specialized tools, cake stands, and boards and dowels
- Ingredients include flour, sugar, butter, oil, baking powder, chocolate, and other flavours
- Delivery including gas, wear and tear of pick-up and delivery van charges and time expense
- Baker’s charge which includes the actual cost for the skilled labour. This is usually charged at an hourly rate
Thus, we have a comprehensive guide into what goes for the pricing of customized and traditional cakes. It is indeed quite an industry, isn’t it?