Reply Help! Cookie pricing

Sugar Tales ...

Okay, this issue is one I have done a lot of research on and feel I have a good understanding on the topic of pricing cookies. I will begin by saying what something is worth and what people are willing to pay are two totally different things.

The biggest and most important part of the equation is your labour, and your time is worth something! Callye (Sugarbelle) has touched on this topic a couple of times now and she has said a few times now that under valuing the price of your products hurts everyone. If everyone valued their work accordingly, then we would all feel like we were actually being paid as apposed to giving the product away for next to nothing. You can’t make money that way! I am now going to quote something Callye wrote on her facebook page in August, 2010 in a discussion thread regarding pricing. I printed it out to refer to when I’m feeling discouraged…..

“I wouldn’t go less than $30-$40 a dozen. If I were to sell for $25, if you calculate material and time spent, I make $1.87 an hour. I am just not willing to miss t-ball games, and going to bed at a reasonable hour or spending time with my kids for any less than that. Check out Eleni’s of New York.

Also, if you shoot low, you kind of shoot yourself in the foot. Once you gain experience you will want to charge more for your “expertise”. However, if you charge $40 and Mary Jane down the block charges $15, you’re pretty much, for lack of a better word, screwed, so, you will have one of two options, charge the lower price, or not sell at all. And NO ONE likes to work for nothing. I would suggest that instead of thinking as other bakers as competition, you think of each other as a united front. In most cases competition is something like baking is perceived. ESPECIALLY if you are a small bake at home operation. Even if you worked 60 hours a week, there is NO way you can take care of an entire town, small or large. There’s always enough to go around. The idea is if you band together and set a precedent, then you ALL win.

In a nutshell, you are WORTH the money. Cookies are kind of like cars…. The ones from a warehouse type store is the 2001 Honda from the used lot. It’s good, it will serve it’s purpose. Hand decorated, custom cookies are a Lexus, a luxury, or splurge. Some people won’t drive a Lexus, actually MANY won’t, but there are always those who will, and that is the market you are shooting for. I know MANY, MANY people would disagree with me, but the ones who do have probably NEVER sat and worked for 10 hours on 24 cookies, or paid $5 for a little tiny container of luster dust etc."

She goes on to say check out Esty for pricing info and google bakeries. And while she acknowledges that this sounds “harsh”, the advice is sound.

There is definitely a market for decorated cookies. It’s just a matter of finding the right people in the right area. That’s where the internet helps. You can come into contact with a large variety of people and incomes. Don’t back down and sell yourself short! This isn’t just a skill. It requires patience, talent and lots and lots of practice! And we won’t even talk about the cost of all of the tools of the trade, and the hidden cost of electricity, and wear and tear on appliances etc. If people do not think your tasty, well decorated cookie is worth it, they can find a platter of ho-hum cookies somewhere but it won’t come close to comparing to a well decorated cookie where people rave about them and don’t want to eat it because it’s so pretty!

I read an article that stated "You are not calculating the value in the same way your buyer is. You cannot sell the price according to what YOU would pay, because you’d pay nothing – you already know how to achieve the outcome you want.

So set the price in line with the outcome, and find ways to deliver it so you’re proud of how easy it is to make the money". (taragentile.com)

Okay, I’ll step off my soap box now. But before I do, I should add that I am really struggling with the idea of selling “Lexus” cookies as well. I am very uncomfortable with valuing myself and my work at a reasonable price and I have absolutely no idea how to tap into the Lexus market whatsoever!