Cupcakes are usually priced at $3 and above and it is quite hard to find cupcakes that are priced below that. Why is this so?
If we want to know why the final cost of the final product is set that way, we need to look at its cost of production. Firstly, different cupcakes are made up of different ingredients and require a different amount of effort and time to make. Some cupcakes require more ingredients compared to others and this adds up to the cost of the final cupcake. Also, the quality of ingredients affects the cost of the cupcake. One would think that good quality ingredients would incur a higher cost hence the higher price of cupcakes. This is true to some extent BUT this does not mean that cheaper cupcakes use poorer quality ingredients. Other reasons listed below could result in the lower cost of cupcakes.
Next is the shop location. Cupcake shops located in town tend to be pricier due to the higher rental cost for the shop space. Cupcake businesses need to consider the cost they would incur before setting a price for the cupcakes as most businesses want to make profit or at least cover cost.
Lastly is the profit margin the cupcake owner intends to make. After knowing the cost price, it would be easier to set the selling price of the cupcakes as businesses do not want to make losses. If a higher intended profit is sought after, cupcake could be priced at a higher price.
Rests assure that at Cup.Cakes Singapore, our cupcakes are reasonably priced and we use quality ingredients to bake our cupcakes. As we are an online business, there is no rental cost of shop space involved which allows us to sell our cupcakes at a lower price without compromising on our quality. Try out our cupcakes today to taste the difference 🙂