Business Bakers: Should I discount this cake?

help! Someone’s asked me for a discount!

A question I see come up time and time again in Facebook cake groups is “Should I offer a discount?” My immediate question back to you is “Well, what for?”

But it’s a bulk order!

A bulk order? Define bulk. Firstly, I’m working on the assumption you’re a UK home baker, registered with your local EHO, with all your insurance and stuff set up. Companies and cafés asking for a discount are used to buying from factories and larger businesses. These places can often benefit from economies of scale, and so usually offer much lower prices, or hefty discounts.

Economies of what I hear you ask? Great question! (P.S. I’m a firm believer that there are no bad or stupid questions, only an unasked one)

‘Economies of scale’ refers to a business being able to take advantage of lowered costs from the sheer numbers involved in their practices.

This can take various forms, but for a practical example, let’s look at a cupcake factory. It makes so many cupcakes in a day, and has a huge warehouse, so it can afford to buy butter in enormous quantities and store it safely, getting a discount from a wholesaler. I buy my butter from regular supermarkets, shopping around for the lowest prices - I just don’t make enough cakes to benefit from having 50kg or even 500kg butter in the house. Let alone have a whole other fridge (/house) to store it in!

Part of a 300 cupcake order

But it’s a large order!

Sometimes regular clients (i.e. not a business or café) order large quantities. I’ve had orders from 4 to 300 cupcakes, and I haven’t discounted any of them on account of the order size. As above, I’m not a factory. I have to work just as hard, if not harder, to do a large order!

Yes, I can order a larger bag of icing sugar, or a bigger quantity of cupcakes cases, but this would only save me relative pennies. I can’t magically increase the size of my oven to fit more cakes in at once, or the size of my mixer to make a larger batch of buttercream.

If I have more batches of cakes to do, I have more batches of work to do.

I need to juggle the space around my house to fit the cakes while they’re cooling and waiting to be packed, and even just stored until collection/delivery. It’s an inconvenience the whole family takes on!

So no, if someone is asking for a discount because they’re ordering “a lot”, consider just how much (more) work you’ll be doing. Stick to your prices!

But it’s for my best friend / my cousin!

How about friends and family? At the end of the day, that’s up to you! I always offer family a discount, though some of them refuse and pay me full price anyway. In my experience, real friends don’t ask for a discount, though it’s my business prerogative if I want to offer one, and I often do, for example as a wedding gift or birthday present. Friends of friends don’t get automatic discounts, because I’m not a chain and I don’t have a referral scheme ;)

But I’ve not done this technique much before!

How about if you’re a newbie, or trying out a new skill for the first time? A discount here is tempting; you might not be confident yet, and you might want to get some orders under your belt. I totally get it! I’ve been there, and I discounted ‘til the cows came home. The problem was I didn’t know when to stop. So with the glorious benefit of hindsight, my top tip to you is to advertise things like this as “introductory offers”.

Put the idea in your clients’ heads that this is not a forever thing. It’s a limited time deal.

This way when you’re more confident, you won’t feel bad about increasing your price. And the little time pressure to get the lower price might also just help them to decide to book you a little faster!

Do you give discounts? Have you ever regretted any? Let me know in the comments below!