Pricing guide
How to price baked goods, step by step.
A good price covers what the batch costs you and pays you for your time. Add up the cost of one batch, pick a margin, and divide. This guide uses US dollars. The numbers in the example are made up to show the steps, not a price to copy.
Add up one batch, choose a margin, and set a price per item before you open your drop.
What goes into one batch
- Ingredients: the cost of everything in the batch, including the small amounts.
- Packaging: boxes, bags, labels, and ribbon.
- Your time: the hours you spend on the batch, times an hourly rate you pick.
- Overhead: a share of what keeps you baking, like oven energy, supplies, and the app you use to take orders.
- Card fees: if you take card payments and pay Stripe's fee yourself, include it.
The formula
Price for the batch = batch cost ÷ (1 − margin). The margin is the share of the price you keep after costs. A 20% margin is 0.20 in the formula. Divide the batch price by the number of items to get the price for each one.
Worked example: a box of 12 cookies
Example only. Use your own costs and a margin you choose. This one uses 20% to keep the math easy.
| Cost | Amount |
|---|---|
| Ingredients | $9.00 |
| Packaging | $3.00 |
| Your time: 1.5 hours at $20 an hour | $30.00 |
| Overhead share | $6.00 |
| Batch cost | $48.00 |
| Price for the batch: $48.00 ÷ (1 − 0.20) | $60.00 |
| Price for each cookie: $60.00 ÷ 12 | $5.00 |
Check the price before you open a drop
Look at what other bakers near you charge, but start from your own costs. If the price feels too high for your customers, look at your time and packaging before you cut your margin. Then set the price on each item and a quantity limit, so the drop sells only what you can bake.
Sales tax and local rules
Sales tax rules depend on your state and what you sell. Check your state's cottage food guide and your state tax office before you set prices.
Frequently asked questions
What margin should I use?⌄
You pick it. The formula works with any margin. Try a few, and see what the price per item comes to. Then check it against what your customers pay for similar items.
Should I count my own time?⌄
Yes. If your time isn't in the price, the price pays for ingredients and nothing else. Pick an hourly rate and multiply it by the hours the batch takes.
Does BakeryFlow work out prices for me?⌄
No. You set the price on each item in the app, along with a quantity limit. BakeryFlow Inventory, at inventory.bakeryflow.app, is our costing tool for recipes.