I don't know of too many people who are deliberate undercutters around here, but I've had clients bring me someone else's price and ask whether I can match it. The answer to that is generally "no," for a few reasons.
First, I have plenty of business. If I was desperate for work I might be more prone to accept offers to match someone else's price, but the fact is that if someone doesn't book with me, someone else will be along, assuming that there's enough time. (The issue of cancellations is different...If someone cancels and it's close to the date, or past the "booking season" for that month, it's unlikely that you'll be able to find someone for that spot. That's not what I'm talking about here.)
Second I've figured out my pricing to pay for my expenses and pay myself an hourly wage, too. If I worked for someone else it's unlikely that they would randomly ask me if I was willing to work for less for a certain amount of time, or throw in an extra hour of work for free. That's basically what I'd be doing if I agreed to match lower prices.
Third, it just sets a bad precedent. It isn't fair to the brides who don't get a price break if I'm giving them out for no good reason. And it isn't fair to me if I do it and the client tells their friends that I'm easy to haggle with. Eventually you'd end up being the bargain house of cake discounts, and ending up earning $5 an hour.
Fourth, I know for a fact that when people give out "free delivery, " or "free anniversary cake" like it's nothing, they've already added the cost of that back into the total cost of the cake, it just isn't an itemized cost on the contract. So if someone says that this other person gives free this or that and can I match that I always wonder if they're thinking it through.
So I don't price match for those reasons. If you do choose to do it, you'd better make sure you're not ripping yourself off by ending up with a markedly smaller salary when all is said and done. Take a real look at the costs, both financial and to your reputation with clients and other vendors.
If you would price match under certain conditions, or you do on a fairly regular basis, let me know your thought in the comments section!
Next week: Operating at a loss equals undercutting!
Kara Buntin owns A Cake To Remember LLC in Richmond VA, and cake supplies online at www.acaketoremember.com and www.acaketoremember.etsy.com