Let’s have a heart to heart here. If you are a small bakery business owner, especially a home bakery owner, I want to PLEAD with you not to be cheap. The words low cost should not be associated with your business. People shouldn’t order from you because you are “reasonably priced”.
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I don’t even want you to be cheaper than your competition.
Truly, I want you to be better.
Have better service, superior desserts, and quality packaging. Outshine every cheap dessert in town. That’s how you will build a business that lasts.
There is always someone who can do it cheaper, but the ones who can do it better are the ones they will call when it matters.
Think about it for a minute, if the cheapest were always best, we would all shop at second-hand shops for everything from clothing to furniture. We’d never buy anything name brand.
Yet, I can think of a lot of name brand products I will buy even if they cost more. Why? Because they’re my favorite or they are the best.
A reputation for quality
Getting your pricing right so you land in the right place with your price point isn’t only about covering your costs. It’s about the customers you chose to serve and where you are positioning yourself within your local bakery market.
Think “Every day low prices” or “Relentless drive for perfection“. Do you know either of those two slogans? The first one is from a mega big box store, the other is from a luxury car company.
I just can’t get excited to see myself offering “every day low prices.” I want a reputation for offering my best.
There’s also a popular meme that floats around amongst the baker crowd:
The meme usually comes up after a potential customer complains about prices or says they can get the cake cheaper down the road. The baker feels insulted. The customer was trying to get a good deal and no one got what they wanted.
It happens. People want a $200 cake for $35. Who wouldn’t want a $200 cake for $35?
In some cases, they don’t know the true value of what they are asking for and in others, they are just trying to get what they want for a bargain price. That’s fine.
Don’t take it personally and don’t lower your prices to get their business.
If you start out with a reputation for being cheap, you will have a very hard time working your way out of that mold. Word spreads fast about good bargains. Build your business on high standards.
Whatever type of customer you serve will multiply by more of the same
In other words, if you serve Bargain Shopper Bessie a 2 tier custom cake for $50 she is going to tell all her BFFs. Soon, you will be getting more and more calls and orders for 2 tier $50 cakes.
It also means that when you try to return to your regular pricing you will be met with, “Bessie said she only paid $50 AND you delivered for FREE.”
That’s really not the type of business you want to run. You will burn yourself into a crisp cookie trying to be the cheapest bakery in town. Moreover, you’ll be doing all the same work with much less to show for your efforts all while attracting more of the same.
Burnout path, for sure.
The same actually goes for discounts, coupons, and sales. If you want to bring in the bargain shoppers, offer a lower price. There are even shops I won’t go to unless I have a coupon because they’ve sent them so regularly. I can’t respect their regular prices.
If you like to give rewards, give them to your loyal and best customers. They will be your best marketers and bring you more clients just like them. Just treat them like the amazing customers they are. No coupon needed, just consistent and excellent service.
Don’t work with people who only want the cheapest they can find
As a bakery owner, it’s important to attract the right clients. Clients who want your brand of awesome are the right clients, the true fans.
In my business, I want customers who have heard how great my desserts are. I want customers who have faith in my work because they have been referred by a friend or have experienced what I offer at another event.
Ideally, I want to attract customers who want to work with me before they even know the price.
I also want to REPEL customers who only want the cheapest they can find. They are always a pain in the BEE-hind. Really. They are. I promise.
If repel is too strong of a word for you, I am sorry.
I am in no way trying to act “too good” for work. To clarify, I’m saying that my time is best spent with people who value what I have to offer.
Your time is valuable too and I want you to work with others who value it.
Clearly stated, you attract the right clients and repel the wrong clients by being clear about what you offer, how much it costs, and why you are the right person for the job. Do not be afraid to explain your premium ingredients and personal talents or to be upfront with your prices.
The same goes for stating how much time in advance orders have to be placed and when payment is due, tell it all right up front.
I like to be able to find out as much about the product as possible before I buy something, don’t you? Make it easy for your potential clients to find out about you.
This will also save you time because you won’t have endless calls and requests for quotes from people who are not the type of client you serve. Have a $200 minimum order? OH… I only wanted to spend $35… guess I won’t call you.
Less stress for you, more time to do work you want to do.
Don’t compete with big box stores on price
As a small bakery, you can’t compete with wholesale clubs and grocery stores. Your access to ingredients, labor, and customers is much smaller than theirs. They can even afford to not make any money at all on a product and be fine.
Isn’t that crazy? A large store can offer items as a perk to their clients. Once a customer is in the store, they are going to shop for so many other things in addition to the cake. Therefore, the store can even make zero profit on a cake and be fine.
That is definitely not how small business operates. Every product matters. Every sale counts. So you have to provide a level of service and quality that a cheaper big box store does not.
Fair pricing for the value offered, no more, no less
I can’t serve every customer and neither can you. Therefore, it’s important that you spend your time working with the ones who know your worth and love you for it.
This worth I’m speaking of isn’t some random value you place on yourself. It’s not an imaginary number you derive from self-esteem and courage, although those two things help.
I’m talking about pricing that comes from knowing your costs, pricing to make a profit, and serving your target market. This is different from pricing low because you are afraid to charge more or you are intentionally trying to be the cheapest baker in town.
Trust me, I know how scary it can be to raise prices. I remember agonizing that no one would buy my desserts if I charged what I really needed to charge to make a profit. You have to step outside of your feelings for a while and just stick with the numbers, they don’t lie.
It can’t be your dream business if it can’t help you fulfill your dreams.
Need Someone to Guide You?
If you are having trouble understanding where to start, Laura and Arnie from Krazy Kool Cake Designs have a great guide available on Etsy, A Cake Artists Guide for Learning What They are Truly Earning. It’s very easy to follow, extremely valuable, and it will help you get your pricing right. Even if you sell a dessert other than cakes.
In fact, I bought this very course from them when I was new to pricing desserts and I was MORTIFIED to find out how much I truly earned from the first really big custom cake order I took. I learned quickly though, and so will you!
I also have more bakery business articles that will help you on this journey. Start with one of these:
Questions or comments?
I want you to succeed. I love to hear when people start moving forward and getting paid for doing what they love. It’s an amazing feeling when we can make a dream become reality. If you have any questions or have something to add, please leave a comment below or send me an email. I’ll be happy to hear from you and help in any way I can.