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Reply to "Selling/Pricing Undecorated Cut-out Cookies?"

It sounds like you're calculating profit as price less ingredient costs, but profit is price less ingredient AND labor costs (what you would pay yourself or a worker to do the work) AND overhead costs. Basically, it's what's left after all direct and indirect costs are taken out - the extra you can apply to building your business by investing in new tools or methods, or save for a rainy day. Even if you aren't paying yourself, you should get in the habit of pricing as if you are, because if you ever intend to expand, you can't get by with paying employees nothing. I say this, because you said your total cost of making a batch of cookies was $5-$6, but I bet it takes at least an hour (probably more) to mix the dough, cut out all the shapes, and package them for the customer. Most people would want to earn more than $5 for more than an hour of work.

There are several excellent articles about how to price baked goods on this site (the method is the same, whether the cookies are iced or un-iced. It all boils down to knowing your full/total costs and marking up in a way that gives you enough true profit and doesn't price you out of your local market.)

I'll send those links in a second, but they can all be found under the "Business of Baking" section of our blog.

Last edited by Julia M. Usher
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