How to Price a Cake: Recipe Costs
Does a cake REALLY cost $100+? Some people think yes and some say no, but I say it depends. There are so many factors that go into the cost of a cake and there isn’t a set value that can be put on all cakes across the board.
There is however a way to Price Your Cake and know exactly how much you should charge.
So let’s see how much it ACTUALLY costs to make a cake!
The first step in pricing cakes is understanding how much it actually costs to make the cake. You always want to at least charge the bare amount to ensure you are not losing money and paying your customers to take your cakes.
You can do this by hand, or use my Cake Pricing Calculator.
You can get 25% off using code: PRICING
It can be daunting figuring out how much your cakes actually cost and how much you should charge for them, but here is a quick process to get you going.
Not only will this post walk you through costing out your recipes, I will also provide you with a downloadable excel sheet and access to a pricing calculator to make it even easier.
Make a list of all of your ingredients
Write out all ingredients and supplies you need in your cake business in list form. You can do this in one big bulk or break it up by recipe. Either way, at the end of it all, you should have a list of every ingredient and active supply you use in your cake business.
Ingredients can include:
flour
sugar
eggs
milk
butter
extract
Supplies can include:
cake drums
cake boxes
parchment paper
dowels
decorations
2. How much do ingredients and supplies cost
Next, look up where you purchase your ingredients from. Make a note of how much each item costs and how much of that item you get at that price.
Write this out next to your ingredient and supply list.
Let’s say you shop at Walmart for your flour and sugar. Go to the Walmart app and look up flour and sugar.
A 10 pound bag of flour is $3.98 and a 10 pound bag of sugar is $6.12.
You want to divide these numbers out to calculate the cost per unit.
If you bake in cups, you will need to convert the amounts from pounds to cups. Same for ounces or any other measurement you use in your recipes.
You can easily convert units in Google.
Let’s calculate the cost of flour and sugar per cup.
To do this, I need to divide the cost by the amount.
So for flour:
$3.98 divided by 45 cups equals $0.09 per cup of flour.
And for sugar:
$6.12 divided by 22.5 cups equals $0.27 per cup of sugar.
Repeat this process for all of your ingredients and supplies or use my Cake Pricing Calculator to make the process quicker.
3. Build your recipe and find your cost
Now that you have your cost per unit for each ingredient and supply, create another list for each recipe you create: vanilla, chocolate, strawberry, etc.
Write out the ingredients used and how much is needed.
Take the amount required for the recipe and multiply that by your cost per unit. That gives you the cost per ingredient needed for your recipe.
Here’s what that looks like for a simple vanilla cake (amounts are not real):
Flour: 1 cup x $0.09 = $0.09
Sugar: 2 cups x $0.27 = $0.54
Eggs: 3 eggs x $0.15 = $0.45
Milk: 0.75 cups x $0.20 = $0.15
Now add those all up to give you the total cost to make your cake which comes out to be $1.23.
You will repeat the same for your supplies, then add the two costs together to get your total cost for that cake recipe.
And that’s it!
That is how easy it is to see how much your cakes ACTUALLY cost you to make, but that’s not where your pricing journey ends.
Be sure to stay around for the rest of the videos and articles in this cake pricing series as we walk through paying yourself for your time, factoring in business profit and including taxes and fees.
