Thursday, September 13, 2012

Why do prices vary among wedding cake bakers?

This is the second of four consecutive articles about Omaha wedding cake pricing.

In a minute I'm going to illustrate a real case study based on only one of what are many reasons.

Due to my research for, this answer gives you insight beyond the obvious and helps you realize most wedding cake bakers are not out there purposely over charging you.

My point is, there are various ways and reasons bakers come up with their particular wedding cake prices.  

Instead of comparing two bakers in Omaha, I'm going to use the larger wedding cake market of Dallas, Texas to demonstrate my point.

We compared two wedding cake bakeries with only one expense; leasing rates.  

Wedding cake baker #1 is paying $3,500 per month for 4000 square feet and Baker #2 is paying $8,000 per month for about the same square footage.

Who do you think had the higher priced wedding cakes? Who do you think was making a larger profit margin?

As it turns out, baker #2’s prices were 26% higher than B/D #1. (e.g. A wedding cake that costs $500 at baker #1, cost $630 at baker #2.

Even at $130 less, baker #1 was surprisingly making 18% more profit.

So, who had the appearance of gouging their brides?

We didn’t research other expenses, but it illustrates how and why wedding cake bakers charge different prices for basically the same wedding cake.

It isn’t that baker #2 is greedy; they simply have much higher expenses and need to price their wedding cakes accordingly. In fact, you could make the case baker #2 was charging a lower price compared to what it cost them to make it.

In this case, “you usually get what you pay for” doesn’t apply.  Both of the wedding cake bakers are very skilled craftspeople and satisfy hundreds of brides every year. In addition, they both price their wedding cakes fairly.

My example illustrates why you need take more into consideration than just the final price.

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