I get orders for one dozen cookies, mostly.  A good number of my customers want specific cutters - the majority of which I am not able to duplicate with hand-cutting.  With my skill level, I keep my cookie prices  at the $3 - $3.50 per. To add the cost of the cutter plus shipping (average is approximately $10) that leaves about $26 - $32 per dozen cookies. I never specifically calculate pre-decorating labor for making, rolling and cutting dough, making and mixing icing, baking, etc. - but I have guesstimated an average of pre-decorating time per dozen to be about 2 hours.  I am considering not doing custom cookies anymore just because of the cost of the cutters . . . Any thoughts? Ideas? Suggestions? BTW - I have HUNDREDS of cutters in my arsenal, but like all things “fashionable”, cookie shapes come and go - everyone wants whatever is current.

Many thanks for comments!

Last edited by Julia M. Usher
Original Post

Sorry, I'm not following the math - $3 x 12 = $36 without the cutter?? Anyway, my strong belief is that if you want to grow into a viable business, you need to compute all time expended on making the cookies and the tools that go into making them, and charge adequately.

I’m looking at it as a direct cost, expense -  that cannot be recuperated.  I don’t look at anything I do as “profit-making” , because I can’t calculate the exact costs of labor, ingredients and utilities, but I tend to look at a special request for a specific cutter as something that cuts deeply into the money that I collect per order.  Not sure if what I am doing makes much sense, but it is how I have operated for several years.  Would happily seek a better idea - it’s very competitive out there.   

I'm sorry, I just don't understand what you're actually doing based on what you said, which is why I'm struggling with an answer. Are you charging for the cutter or not? From the calculations you're showing above, it seems like you're instead deducting the cost of the cutter from the cost you normally charge for cookies, and thus cutting into your normal margins on the cookies. That just doesn't make sense to me - you should be charging for the cutter if it's a one-time use specific to the order.

Also, for whatever it's worth . . . you can definitely compute your actual materials and labor costs - all food service business (that stay in business) do.

Thank you, Julia for your time and responses!  Sorry to not be as clear as I wish.  What I am understanding from your patient comments (most particularly this latest) is that I SHOULD be charging for a special cutter!    I never have.   People ask before ordering what I charge for cookies, I give them the typical answer, “depending on size and level of detail”.  And then the special requests for cutters come in.   I think that from now on, I will include in my response to cookie pricing, the statement “and on-hand cutter.”   I think I just don’t feel entirely comfortable doing that, but it only makes good sense.    I do greatly appreciate your replies to my question.   My apologies for my lack of clarity.

My Best to you, 

lynda

@Lynda posted:

Thank you, Julia for your time and responses!  Sorry to not be as clear as I wish.  What I am understanding from your patient comments (most particularly this latest) is that I SHOULD be charging for a special cutter!    I never have.   People ask before ordering what I charge for cookies, I give them the typical answer, “depending on size and level of detail”.  And then the special requests for cutters come in.   I think that from now on, I will include in my response to cookie pricing, the statement “and on-hand cutter.”   I think I just don’t feel entirely comfortable doing that, but it only makes good sense.    I do greatly appreciate your replies to my question.   My apologies for my lack of clarity.

My Best to you, 

lynda

Yeah, that's what I'm saying. If it's a special one-off purchase that you think you will never use again, then charge for it. You could even give it to them in the end, if they pay full freight. Now, if it's one you'll use over and over, that's another thing - your regular cookie pricing should include enough of a markup to cover all of your direct costs, allocated indirect costs, and then some, so you can accumulate money over time to funnel back into equipment and other investments in the business. 

I started out trying to accommodate my customers’ requests for specific shapes. Eventually, when I realized the extent of the ongoing cost and storage requirements, I started convincing them to go with geometric (circle, square, etc.) or plaque cutters. I could pipe any shape they desired on this blank canvas without needing to buy and store a bazillion cutters. 

I started out trying to accommodate my customers’ requests for specific shapes. Eventually, when I realized the extent of the ongoing cost and storage requirements, I started convincing them to go with geometric (circle, square, etc.) or plaque cutters. I could pipe any shape they desired on this blank canvas without needing to buy and store a bazillion cutters. 

Great point!

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