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How to price cookies and holiday cookie boxes
Ingredients are the cost every baker remembers. Time and packaging are the ones that get left out, and markup is easy to mix up with margin. Here is the math in four steps, with a worked holiday box.
1. Find your true cost per cookie
Add up what one batch costs you: the ingredients you used (not the whole bag), the packaging for each cookie, and your time at a wage you'd accept. Divide by how many cookies the batch makes. Your time is a real cost: if you leave it out, your "profit" is only your wage.
2. Price for margin, not markup
Markup compares the profit with your cost. Margin compares it with your price. A cookie that costs $1.00 and sells for $1.50 has a 50% markup but only a 33% margin. To keep half of every sale as profit, divide your cost by (1 minus the margin you want): $1.00 ÷ 0.5 = $2.00.
| Cost | Price | Markup | Margin |
|---|---|---|---|
| $1.00 | $1.50 | 50% | 33% |
| $1.00 | $2.00 | 100% | 50% |
| $1.00 | $2.50 | 150% | 60% |
3. Build in your fees
Card readers and online stores take a percentage plus a fixed amount per sale, and markets charge a booth fee. Divide a booth fee by the cookies you expect to sell there and add it to each cookie's cost. For card fees, add the fixed amount to your cost and take the percentage away from the margin: price = (cost + fixed fee) ÷ (1 − margin − fee percentage). Use your own provider's fees; the ones below are only an example.
4. A worked holiday cookie box
A box of 12 cookies. Each cookie costs $0.60 in ingredients and baking time. The box, liner, ribbon and label cost $2.50, and assembling it takes 10 minutes at $20 an hour.
- Cost of the box: 12 × $0.60 + $2.50 + $3.33 = $13.03
- To keep a 50% margin: $13.03 ÷ 0.5 = $26.07
- With an example card fee of 3% + $0.30 per sale: ($13.03 + $0.30) ÷ (1 − 0.5 − 0.03) = $28.37, so round up to $29 a box
Check that you may sell holiday boxes from home in your state, and what the label must say, on your state's page (pick it from the list of all states).
Do this in a minute. The free cookie price check does steps 1 to 3 for one recipe. The Cottage Kitchen Toolkit costs every recipe, prices each way you sell and prints the labels.
Free cookie price check Get the toolkitA planning aid, not tax, legal or business advice.