Price your cakes to cover costs and earn profit.
The fundamental formula is: Price = (Ingredients + Labor + Overhead) ÷ (1 - Profit Margin). Most home bakers undercharge because they forget overhead (electricity, equipment depreciation, packaging, delivery gas) and undervalue their labor. Industry standard: ingredient cost should be 25-35% of the final price. A basic 8-inch round cake typically costs $8-15 in ingredients and retails for $35-65. Tiered wedding cakes: $4-12 per slice is standard. Fondant and complex decorations add 30-100% to the price. Always factor in consultation time, delivery, and setup. Keep detailed records of ingredient costs — flour and butter prices fluctuate significantly. Adjust prices annually or when ingredient costs rise more than 10%.