How to Raise Prices in Your Home Bakery
Have you been thinking about raising the prices of your delicious home baked goods?
Maybe you’re here because you’ve been struggling to turn a profit in your home baking business.
You’re working SUPER hard and you’re baking practically every day of the week.
You say no to 9/10 social gatherings because you always have baking that needs to get done.
You’re up early every morning and working late every other night.
While your family is barbequing outside, you’re in the kitchen baking orders for tomorrow.
Then you look at your financials at the end of the month and see that you’re STILL earning small change. Despite all that effort and sacrifice! 😒 How is this possible?!
My friend, I know exactly how you feel because I’ve been there.
If your Home Bakery has enough clients and orders to keep you this busy in your baking, that’s awesome! Congrats to you!
But for a business to succeed and be PROFITABLE, you’re going to need more than just heaps of orders.
You’re going to need each order to be as profitable as it can be (within reason).
“Why Should I Raise My Prices When Clients Prefer Cheap Products?”
Be very careful how you think about pricing and customers. If it were true that all clients prefer cheap products, then companies with super expensive products (like Ferrari, Prada and Rolex) wouldn’t exist.
Truth is that all clients are NOT the same! They don’t all want the same things.
Don’t fall for the assumption your mind is making. All clients don’t prefer cheap products with cheap quality. There are thousands upon thousands of people out there who will gladly pay good money for superior products like yours.
“Isn’t it Greedy to Charge Higher Prices?”
In short, not at all. Just like plants need water to survive, businesses need money to survive.
If you want to bake as a hobby, that’s fine. But if you want to turn your baking into a business that actually gets you a salary every month, you need to charge properly.
Charging your clients decent prices is not about being “obsessed with money” or “greedy” or “milking clients” for crazy profits.
It’s just a basic fact of business. Businesses need to make money or else they die. It’s just that simple.
The Hamster Wheel that Doesn’t Get Your Home Bakery More Profit
Deep down we KNOW our baking business needs to make more money so we try to fix this. But we try to fix it the wrong way!
1. We so easily assume that our businesses aren’t growing because we “need more Instagram followers” for example. But it’s 100% possible to have a huge Instagram following and still not make enough money to even bake part-time!
In fact I know bakers with a following of like twenty thousand people but they are not making enough money from their baking business to do it full-time. “Popularity doesn’t pay the bills.” – Jasmine Star
2. Another super popular misconception most home bakers have is that they just need MORE clients and MORE orders for their business to do well. And they think the way to achieve that is MORE advertising – resonate with this one?
But it’s a flawed and dangerous approach.
Even if you advertise and market your business and bring in more clients, your business will STILL struggle.
It doesn’t help if you have a heap of clients but you still undercharge ALL of them. That’s not a recipe for success, that’s just a recipe for burn-out.
The answer to your problems of burn-out and lack of profit isn’t getting more and more clients.
Here’s a metaphor to explain my point better…
Let’s say your success is this water tank on the right. When it’s full you’ve reached your profit goals. But YOU have to fill your success tank with water from this river on the left – which represents your potential clients & profit. The only tool you can use is a water bucket to carry profit from the river to the tank.
When you’re undercharging your clients it’s like your water bucket has a hole in the bottom. So no matter how hard you try, loads and loads of water won’t make it to your profit tank.
And now you’ve got 2 options:
1. Run faster and faster from the river to the tank and scoop larger and larger amounts of water that you can barely carry.
OR option 2 which is to…
2. Plug the hole in your bucket!
Which option do you think is more logical? Which option is more sustainable?
It’s to plug the hole in your bucket, right?
In the exact same way the answer to your combination of burn-out and low profit won’t be solved by working faster and scooping up more clients.
The solution to home bakery burn-out lies in charging enough for the clients that you DO have right now so that all the water you carry and all the work you do goes into your success tank and contributes to your profit & success.
Does this make sense?
The REAL Reason You Feel Guilty to Charge Full Price
Now we get to plugging the hole in your bucket!
Here’s a REAL life story about undercharging. The story is about my friend’s mother – let’s call her Gwen. Gwen has a catering business. She’s had this business for decades now – she’s been selling her food for about twenty years and she’s a fantastic cook.
Her food is absolutely incredible.
She takes so much care in what she does.
She deals with people extremely well, she cares about her clients.
It’s like all the boxes are ticked but here’s the thing… Her business is barely surviving and has been barely surviving for the last twenty years. She has a great product and heaps of clients so those aren’t the reasons why her business is struggling.
The real problem is that she always undercharges.
My friend had a conversation with her mother a while back about all the discounts she gives. And as I was listening, something suddenly clicked for me about undercharging.
Gwen told her directly that she doesn’t want to charge people a lot of money. If they just tell her that her food was delicious and that they enjoyed it then that’s MORE than enough for her!
Can you relate to that? If people just tell you “Thank you so much! This cake just made my day. I appreciate it so much. It’s made my birthday spectacular. It’s the most delicious cake I’ve ever had.”
Does that positive of feedback help you to feel amazing about yourself as a person? Does it make you feel valued and treasured and like you matter?
You’re not alone! All of us feel so appreciated and valued when someone enjoys our baking.
It’s a good thing that people appreciate your bakes. But it can turn into a problem. Let me explain why.
What if I told you that people are actually already paying you full price for your bakes but you might not necessarily be aware of it?
When you keep undercharging clients over and over again it’s because:
Whatever people don’t pay you in money, or whatever you don’t charge them in money, you’re subconsciously expecting them to pay in validation.
That’s the truth bomb of today. I hope you understand what I’m saying here.
Here’s an illustration to help you understand.
The top level is full price. Now you charge them less which is the marked level further down.
If you charge them less you think you’re making a financial choice, but the reality is that you’re subconsciously expecting them to make up this difference in validation – so that you’ll feel okay about yourself and about your business.
I know this because I did this myself for YEARS without knowing it!
We basically charge our clients less so that they can pay us in validation to make us feel worthy. We undercharge so our clients make us feel valued, to make us feel like we are enough.
It’s really scary, I know, but it’s the truth and you need to know this otherwise you’ll be under-charging for your baking for the rest of your life.
But I also want you to know that it’s not your fault that you feel this way. It’s not your fault that you’re doing this. It’s incredibly normal and I did this too.
How to Charge Higher Prices: Step-by-Step
1. Spell out for yourself what makes you valuable as a human being.
It’s not your work (because babies are valuable even though they do zero work). It’s not people’s praise (because people are biased, flawed and lie regularly). It took me a long time to see it, but eventually God helped me realize that I’m valuable because HE loves me. Not because a client loves me.
Really take time to think about what it is that makes you valuable as a person. Once you establish this, you’ll feel way more liberty to charge the prices you’re supposed to.
2. Download the Pricing Calculator that calculates your recommended selling prices FOR you!
No need to do complicated math! You can download the Pricing Calculator in the Free Resource Library >> click here to join the Library. If you’ve already joined the library, then go to the last email I sent you and click the blue link to the Library right at the bottom of my email.
3. Watch the instructional video to learn how to use the Pricing Calculator. Then calculate your selling prices of your baked goods.
4. Update your prices! Simple as that! If the price increase is quite drastic, then you can increase your prices halfway now and the rest of the way 3 months from now.
“What if I Feel the Recommended Selling Price is too High?”
The most important thing you need to know about home bakery pricing is that it’s not about your feelings! I know this sounds harsh, but let me explain.
Pricing is a mathematical, LOGICAL thing. If you build a business according to your feelings, you won’t make sound business decisions.
Logically, you need to charge the prices the Pricing Calculator recommends if you have any hope of CARRYING ON with your Home Bakery. I know it’s hard! But I’ve come to understand that a successful business is built on logical decisions, not emotional ones.
If you keep undercharging and giving discounts because of your feelings, you’ll burn out OR your business will.
What if a Client Complains About Your Prices?
If a client complains about your prices, then they are simply NOT your ideal client.
Truth is there will absolutely be clients who aren’t a good fit for your home bakery – and that’s ok! You don’t need everyone to like your business in order to be successful!
Handmade, homemade baked goods are luxury items and extremely valuable. Clients get something that’s made FRESH, just for them with top quality ingredients. It’s not a week old and with cheap ingredients like in the grocery store!
Even though there’s a huge market for this HIGH QUALITY type of home baking, it’s not for everyone – especially not “budget clients”. I’m sure you’ve encountered budget clients before!
If someone complains about your prices, you can politely refer them to the cheap, semi-stale stuff you find in the grocery store’s baking section.
How you determine your prices is none of your client’s business.
Do these clients do the same thing when they go to restaurants?… “Excuse me KFC cashier, but that cook of yours back there has a trainee badge and is new to the cooking scene. So, I’m only going to pay half for my order.”
No! It’s not even an option at ANY restaurant.
YOUR PRICES ARE YOUR PRICES. It’s not your job to “convince” clients that your prices are fair. Don’t take the bait! If they doubt your prices or complain, politely refer them to the grocery store’s baking section.
You can use this script:
“Hi NAME 🙂 I would have loved to bake for you, but unfortunately my prices are my prices. Every item is handmade with high quality ingredients and care. These things are very important in my business and cost a lot to keep going. If you’d like something more affordable, I highly recommend [local commercial bakery/grocery store]. I hope your event is wonderful! Best regards.”
A Bonus Tip on “Budget-Clients”
On this note, be careful not to market your baking as “for everyone and every occasion” because then you WILL attract budget clients who complain and ask for discounts!
Instead, focus on the fact that your bakes are a full on luxury, HIGH QUALITY, gourmet experience.
Closing Thoughts on Raising Your Home Bakery Prices
I know first-hand how scary it is to raise your prices! I get it.
But your business NEEDS you to raise your prices. Because if you don’t, it won’t survive.
Clients that aren’t willing to pay more for your high quality, homemade baked goods, probably weren’t your ideal clients in the first place!
But take heart because there are PLENTY more clients for you out there!
If you enjoyed this post you’ll also enjoy these other 3 posts:
👉 6 Steps to Pricing Your Home Baked Goods with Confidence
👉 How to Deal With Difficult or Dissatisfied Home Bakery Clients
👉 Home Baked Confidence Course: Find your unique baker-confidence and earn more profit with less stress!