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.

Thanks Julia,  

I was calculating around $7 an hour for time. I know it seems low.  Pricing is hard lol.  I have worked on building a system for pricing based on cookie size and classification of decorating -- basic to elaborate.  I used an article I found here on this site and adapted it.  My overhead isn't much as I am a cottage business.  I guess my big issue is I didn't start out charging enough for decorated cookies. Would you suggest gradually bumping that up? I have only been selling cookies since April this year and have a decent business.  I only do 2-4 orders a week. It's plenty right now. 

Thanks for your help ! 

Wow, you can mix and cut 40-some cookies in under an hour? I definitely can't. You'd probably want to pay yourself more than under-minimum wage as well.

Since you've seen those links, I won't copy them here. But, if I were you, I would build in more value for my time, and start to price up over time. If you lose a couple of customers over it, it won't be hard to find others who place more value on your time.

Julia M. Usher posted:

Wow, you can mix and cut 40-some cookies in under an hour? I definitely can't. You'd probably want to pay yourself more than under-minimum wage as well.

Since you've seen those links, I won't copy them here. But, if I were you, I would build in more value for my time, and start to price up over time. If you lose a couple of customers over it, it won't be hard to find others who place more value on your time.

Thank you for stating it so well!  We do need to value our time when selling decorated cookies!