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How to price Cakes or any Baked Items?
To price a cake/ baked items or to identify its selling prices, you need mainly three components in your calculations: ingredients, overhead, and labor.
Overhead Cost: Costs of electricity, gas, rented equipments if any, any services you used for the purpose etc all comes under overhead cost.
Labor Cost: The hourly rate of your time or your employees time and time taken the finish the product from preparation till its delivery.
Ingredients/ Raw Material Cost: All the ingredients cost for your recipe, packaging, decoration items like confetti, toppers, dowels etc. will come under ingredients cost.
How to develop pricing strategy?
Its depends on the products, for e.g for any baked items like cookies, biscuits, breads you can mainly remember about the three basics we mentioned above:
Certain additional costs mentioned below can be treated as separately or considered as part of the above components.
Customized Decor Cost: Cost for customised theme decor like cake toppers, cupcake toothpick toppers etc. can be considered additional as a separate component or you can consider it as part of the ingredients.
Delivery Cost: Cost for delivery in India typically is ₹12-₹14 locally (as of 2022), you can calculate the same depending on your area and add that as a separate component or you can consider it as part of the overhead cost
Rent of Decor Equipments Cost: Cost for any rental equipments like display stands, cake stands, or equipments require for to arrange dessert table or related decor along with its rent and delivery charges can be considered as a separate component or you can include it under overhead cost
In any case keeping the communication transparent is a key to create a trust with your customers.