The cottage food industry is growing by leaps and bounds and home-based baking is taking the lead. Home bakeries are popping up across the U.S., UK, and Australia, however, there is causing a dark cloud looming over the industry. It’s called predatory pricing. The competition between cake bakers is fierce, and the idea that customers are scarce is a myth. Bakers think there isn’t enough business to go around and that’s not true.
Predatory pricing is the result of:
- Low self-esteem and not knowing your worth
- Lack of business education
- Placing no value on talent or time
- Suffering from a scarcity mindset
- Focusing solely on the sale
- Not understanding the difference between competing and comparing
If you’re a home-based baker asking, “How can I find customers willing to pay for my skills, knowledge, and cakes?” Let’s look at a few cold facts. First of all, no one wants to pay for your skills, knowledge or cakes. What customers want is for you to solve their problem. Think about how you answer your phone? “Jenny’s Custom Cakes, how can I help you today? People need help because they have a “problem.”
Predators don’t care about the price placed on their products because their purpose is to get cash in the hand. You are, unfortunately, supporting predatory business practices. Furthermore, this practice will never sustain you and despite your greatest efforts you will either change your practice or go out of business.