Costing & Pricing
Calculate the true cost of your recipes per serving and set profitable prices for home bakery and cottage food businesses.
Home Bakery Profit Margins: What to Expect
Home bakeries typically achieve 50–70% gross margins on ingredients, but labor reduces net margin to 20–40%. Custom cakes have the highest margins; wholesale the lowest.
How to Price Baked Goods for a Home Bakery
Price baked goods at 3–4x ingredient cost to cover overhead, labor, and profit. A $3.50 ingredient cost per dozen cookies should sell for $12–$14. Step-by-step formula.
How to Calculate Recipe Cost Per Serving
Divide total ingredient cost by servings. A recipe using $8.40 of ingredients that yields 12 servings costs $0.70 per serving. Step-by-step with a worked example.