How to stop discounting your cakes to friends and family!
Discounting your cakes to friends and family – if even… charging anything at all? Why is charging for cakes so difficult sometimes?
As a cake decorator it is so easy to get overwhelmed when both life and work pulls you in all different directions.
It is so easy to allow this to happen. Then on top of that, someone within our inner circle of family and friends asks for a favour of you.
Yet, how many cake decorators offer to make a cake as a present of even worse free of charge? Certainly discounting your cakes – seems to be anticipated and expected from certain members of a family.
But then the cake decorators are aghast and out of pocket after discovering the true price of the ingredients. And also without pay for the time spent making and decorating. They would never have gifted such an expensive celebration gift if purchasing it from a shop. But somehow – because it is their time, they make it OK.
So what of allowing the same people asking for free – a discount instead, so that they pay just something? Do these people even know what your prices are? Is it really a good idea to be discounting your cakes?
Would they be embarrassed to ask for this favour if they actually knew your official prices?
So how exactly can we get friends and family to pay full price?
Discounting your cakes – Not a good idea?
A free or discounted cake takes up exactly the same time as a full priced one….fact
To accommodate space in a busy week for a free or discounted cake, prices for other orders needs to increase. Otherwise a weekly sales target is missed. This does not make it fair for others – and more expensive through no fault of their own.
Our inner circle should value our products, services and value our time even more so.
Explain that to accommodate any discount, you would need to increase prices to others. And they SHOULD understand.
Decreasing a cake price – does not reduce your overheads or your fixed costs
By decreasing an order price for family or friends, does not reduce the running costs of any business. When charging for cakes, work out your prices based on overheads and expenses as well. You need to be aware of what these extra costs are and wave them into your price.
There are some obvious overhead charges to consider for any cake business. Items like utilities, taxes, payment processing fees, equipment, accounting, website costs, marketing, insurances and more.
A free or discounted creation covers none of these costs – and you will be left out of pocket as a cake business owner.
Make them feel it is cheaper for them!
I had one student who was constantly asked by friends and family for creations. To lessen the money she would have to ask for, she would ask them to buy and give her all the boxes, boards and ingredients. She would just them tell them her hourly rate and an estimate of her time. Somehow – this seemed to ease the embarrassment of charging them. As a result she wasn’t out of pocket.
But the customer did seem to add up the grocery bill and add on her invoice. But this strategy worked for her for family and friends discount hunters.
Avoid the decision of who exactly qualifies for a discount or free cake
So who exactly would qualify for free or discounts? Blood relatives only, not neighbours. And how long does someone have to be your ‘best’ friend to qualify?
It’s an energy drain to work it out. Ensure that you price your cakes properly. Create a price list which is available to any customer – friend or family. Refer people back to this – ALWAYS
Avoid embarrassment by writing out an estimate and get the design and price approved
I have one student who could not bear to charge what she had quoted the customer. So when the lady came to pick it up she would ALWAYS discount it at the door. This of course drove her poor suffering husband mad and caused huge arguments. She stopped after a couple of private coaching sessions with me. And she has not repeated her error either.
Why not use an order form and write out a quote. This means you can even get the design and price approved by signature. This also means everyone knows where they stand and what is expected of all parties.
Expected from you – a fabulous cake, delicious and ready on time. And you expect from your customer – the deposit and a timely balance paid with a smile. And hopefully a testimonial for you to share with future customers – if you ask nicely!
So in short – when charging for cakes – learn to price properly. Include your overheads so that you don’t undercharge. Use an order form and remember that CakeCoachOnline is here to help you too.
We have downloadable tools to help you. Why not start by signing up for our free Cake Pricing Guide – showing the 10 different ways to price a cake. And you had better not be using No. 10!!
Here is the link:- https://cakecoach.com/guide
Or why not have a look at our selection of products too?