Thursday, January 20, 2011

Pricing: Add It Up!

I realize I seem to do a lot of articles on pricing and pricing issues, but in the (wedding) cake business, its a point of frustration for baker and client alike. I recently heard a story from a fellow baker that is a wonderful lesson and I'm happy that she agreed to let me share it here.

As I've written before, it is not uncommon for a baker to charge for a consultation or tasting. ( ) The baker incurs some expense in supplying various cakes, fillings and icings for the consulation, plus the "lost opportunity costs". Some bakers charge this fee, some don't. Some apply it to the order if the cake is ordered, some don't. It is one of the items I encourage brides to ask about as they make appointments.

In another article, I shared how my brides have told me that my higher-than-the-competition per-serving price can end up being cheaper than the "cheaper" place. ( )

As a bride does her comparison shopping (which I strongly encourage), she needs to take careful note of the various fees/charges that may apply and add them up.

Here's the story I want to share:

A client canceled a consultation appointment when she found out there was a $10 charge for the consultation, giving a reason that the competing bakery did free consultations. This competing baker's pricing was also higher per-serving than the first baker.

Let's do some theoretical math to see how this works out and to illustrate what a bride should look for.

Client is looking for a cake to serve 50 people.

Baker A charges $3/serving plus a $10 Consultation Fee.
50 servings x $3/serving = $150 + $10 consultation fee = $160 total cost.

Baker B charges $3.50/serving and consultations are free.
50 servings x $3.50/serving = $175 total cost.

It is costing the client fifteen dollars more to get the "free" consultation.

It is a given that the bride/client needs to also consider the taste of the cake, the quality of design and execution of the work, and not just the price per serving or not just whether a consult is free or not.

Baker A tells me that she charges the $10 consult fee because many of her clients know what they want and order their wedding cake via email or phone. She does not want to just add in the cost of the consults into the base price because she does not want to charge extra to those who do not need the private consulation appointment. It is how she keeps her expenses covered and her pricing fair to all of her clients.

When planning a wedding, people seem to forget how to "Do The Math" (see this blog article where I discuss that: ) and this article is to show why it is important to always, always, always ask questions and keep track of the details.

They add up and can sneak up on you!

1 comment:

  1. good information on this blog.nice job