How to Price Baked Goods
Home bakers often price by what feels normal locally and lose money on decorated orders. Here is how to cost cookies, cupcakes and cakes from your own ingredient prices.
What goes into the cost of one item
- Ingredients by the gram: flour, butter, sugar, eggs, chocolate, costed per gram from what you paid.
- Decorations: icing, sprinkles, toppers, colours.
- Packaging: bags, boxes, ribbons, labels.
- Your time: baking, decorating, packing and talking to customers.
- Overheads: electricity for the oven, equipment, card fees, permits or registration where your area requires them.
Worked example: decorated sugar cookies
Ingredients and packaging come to $0.61 a cookie. With decorating time and overheads, each cookie costs $4.55. Sold at $4.50, every cookie loses money, which is why decorated cookies need a price well above plain ones.
Baking pricing mistakes
- Pricing decorated items the same as plain ones.
- Forgetting card fees and packaging on market days.
- Not charging for consultation time on custom cakes.
- Using supermarket prices for ingredients you actually buy in bulk, or the other way round.
The spreadsheet for home bakers
The Home Bakery Cost & Pricing Calculator costs ingredients per gram, has a recipe scaler and builds prices that include card fees (Excel and Google Sheets).
Work out your own price
Try your numbers in the free handmade pricing calculator, one product at a time. The general method is on How to Price Handmade Products.
Example figures use $20 an hour for your time, $120 a month of overheads spread over 200 items, the 2 × 2 wholesale/retail rule, and online selling fees of about 9.5% + $0.45. Your supplier prices will differ.