Wednesday, January 4, 2017

State of the Cake Union For 2017


Things have definitely changed with cake decorating since I started in the business 20 years ago. In fact, it's all starting to be one of those blurs where you say to yourself "that happened five years ago? It seems like yesterday."

The past year was a bit of a calming-down period, as far as I can tell. The big "cake build-up" that started about 9 or 10 years ago (but maybe longer, like I said, I can't remember anymore) has died down. There aren't as many cake decorating shows on tv, and many of the people who were featured in those shows have moved on to other things. Some of them seem to be more interested in being judges on other tv shows, and some have started their own "cake education" websites.

That seemed to be the trend for 2016, and it will probably continue into 2017. Subscription-style websites where you sign up to get tutorials, video lessons, etc., and the person who runs it doesn't sell cakes to the public. Or rarely does. That's a different business model, though, and it doesn't really make sense to compare those types of businesses to a business that sells cakes to the public.

That's the big lesson that needs to be taken away. The cake decorating market has split into two separate industries. One is information-based, and one is product-based. The information-based businesses are selling products to other decorators, and the product-based businesses are selling actual cakes to actual clients. You need to be aware of which type of business you're dealing with if you're looking for inspiration on how to run a business. Looking at someone who's running an information-based business and saying "how are they doing things" isn't going to work if you're in a product-based area.

To complicate things a little more, there are the supply companies, like mine, that are product-based, but who don't sell cakes to the public. 2017 will be the first year that I'll sell no cakes at all, and will be operating online only. So there are basically three branches to this industry, with the information arm of it having been the one that's grown the most over the past few years.

Why the information-based arm has grown so much is directly related to the changes in the product-based arena. So many people entered the cake decorating arena in the past five or six years, competition has increased and created a buyer's market. That made it impossible for many people to create an actual income from cakes, so they diversified into the information area. How valid some of the information they're passing along is, is the issue.

There's one person who claims to be a pricing expert who recently said that she wasn't making any money on cakes. She now works on other forms of income, including ad income from blogging about pricing cakes. I don't know what kind of advice she gives out about pricing, but maybe you should be careful about taking pricing advice from people who also say they're not making any money!

This just points out that there are a lot of information-based businesses that hand out information that isn't working for the person handing it out. If you do decide to take the advice of someone, make sure that they have a background in what they're talking about, and that they were actually SUCCESSFUL in that area. If I had a widget company that went bankrupt because I couldn't figure out how to make it work, I shouldn't be handing out advice about widget businesses. Just do your research before handing over your money. And make sure there's a money-back guarantee.

As far as the product-based business area goes, you do need to be careful with your pricing in the upcoming year (since we're on that subject). Since we're currently in a buyer's market, there's still a lot of cake cheapness going on, and people can generally find someone to make an elaborate cake for the cost of the ingredients plus $3 an hour for the decorator. This isn't good.

My summary for last year suggested diversifying your products, and I think that's still good advice. You need to be more sophisticated about your business these days since there's so much cake out there. It isn't enough to just post on facebook anymore, you need to understand your market and where your customers are coming from. Years ago there was a "cake lady" who everyone in one area would go to. Now there are fifty "cake ladies" and they're all competing for customers. You need to figure out why those customers should come to you, then figure out how to let them know about you and why they should be your clients.

Other resources are my pricing guide (yes, I made well more than a living wage every year so I know what I'm talking about on this one), and  Home Baking For Profit by Mimi Fix. For those of you who are saying "I can't afford to pay for that," I'll give you the typical "you can't afford NOT to get them" response. If you want your business to be successful, you need to invest in it, and invest in yourself. You have to know what you're doing, and figuring things out along the way isn't efficient. If you don't take your business seriously, nobody else will either.

So to sum up...For 2017, you're going to need to be aware of your goals and what you need to do to get to those goals. You'll have to be more aware of specifics and who you're buying from, and it's going to take some real planning to keep growing your business.



Kara Buntin owns A Cake To Remember LLC,  online cake supplies at  www.acaketoremember.com and www.acaketoremember.etsy.com

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