The Most Common Cake Pricing Mistakes Bakers Make (and How to Fix Them)

The Price Is Right… Or Is It?

Pricing cakes is hands-down one of the hardest parts of running a baking business.

Sure, learning to stack cake layers, get smooth buttercream, and deliver a cake without incident all come with a learning curve — but pricing? That’s the big beast. Almost every baker I know has asked themselves some version of:

How do I know what to charge for my cakes?

Let’s break it down.

What the “Right” Price Actually Needs to Do

Before we talk about mistakes, let’s talk about goals. A price needs to accomplish three things:

1. Cover all your costs and expenses

2. Properly compensate you for your time, labor, and expertise

3. Leave profit in the business so it can grow

If your pricing doesn’t hit all three, you’re not running a sustainable business — you’re just staying busy.

Unfortunately, many bakers fall into the same pricing traps. Let’s walk through the most common ones.

Mistake #1: Using the Price-Per-Serving Method

Price per serving is widely accepted in the baking world — and it’s also wildly misleading.

Picking an arbitrary number per serving and multiplying it by the number of servings tells you very little about:

• the time involved

• the complexity of the design

• your actual expenses

Two cakes with the same number of servings can require completely different levels of labor and skill.

The following chart shows you the breakdown of three different sized cakes priced with the price per serving method. You can see how when using the price per serving method, smaller cakes become undercharged and larger cakes are overcharged.

You don’t make cakes by the serving — and customers don’t actually buy by the serving either. While price per serving can be helpful as a comparison tool, using it as your main pricing method often leads to serious undercharging (or occasionally overcharging).

Mistake #2: Forgetting to Include Profit

This one is huge.

Profit is not the same thing as paying yourself for labor. Profit is money that stays in your business so it can grow, improve, and support your goals.

Most bakers calculate ingredients + labor… and stop there.

Then what happens?

• Every dollar goes straight out

• There’s nothing left to reinvest

• Growth stalls

A business without profit can’t evolve. Including profit isn’t greedy — it’s necessary.

Mistake #3: Taking Responsibility for the Customer’s Budget

Have you ever calculated a price, then lowered it because you worried it might be “too much” for the customer?

That decision is almost always driven by fear:

• Fear they’ll say no

• Fear of looking expensive

• Fear that charging properly is somehow “wrong”

Here’s the truth:
A customer’s budget is their responsibility. Your numbers are yours.

Price is not a moral issue. It’s a math equation based on your real costs, time, and goals. Not everyone needs to afford your cakes — and that’s okay.

Mistake #4: Underestimating Labor Time

“Oh, that cake will only take me an hour.”

We’ve all said it. And we’ve all been wrong.

Labor typically makes up 60–70% of the total price, and it includes far more than just decorating:

• Mixing batter

• Shopping for supplies

• Communicating with the customer

• Setup, cleanup, packaging, and delivery

When you underestimate labor, you end up working for free — even if the order feels “busy.”

Every minute counts. Price accordingly.

Mistake #5: Trying to Grow by Having the Lowest Price

This is the fastest path to burnout.

Competing on lowest price only works with mass production — and custom cake businesses are the opposite of that. You’re creating made-to-order, edible works of art. You will never beat grocery store prices, and you shouldn’t try.

Your ideal customer isn’t looking for cheap. They’re looking for better.

So… How Do You Fix This?

If you recognized yourself in any of these mistakes, don’t beat yourself up. We’ve all been there.

To fix pricing issues, two things need to happen:

1. You need to know your actual numbers and how to use them

2. You need to rework your money mindset so fear doesn’t drive your decisions

When you understand both, pricing stops feeling like guesswork. You’ll know exactly what you need to charge to:

• cover costs

• pay yourself properly

• grow your business

And just as importantly — you’ll have the confidence to stand behind that price.

If you want help figuring out your numbers and overcoming pricing fears, Pricing Mastermind: The Ultimate Pricing Course for Cakers walks you through both step by step.

Because the right price doesn’t just support your business — it supports you.