Guide
Costing Is Not Pricing
“How much would you charge for these?” is the most-asked question in cottage baking — and the answers are almost always ingredients plus a guess. Ingredients are the smallest slice of the cost. If you don't add profit on purpose, you don't have a business; you have an expensive hobby with customers.
The five slices of a true unit cost
Ingredients — what the batch actually used, priced from what you paid: amount used × purchase price ÷ purchase quantity. Not the bag's price, not a per-cup guess.
Labor — hands-on minutes at an hourly rate you choose. This is the slice most bakers set to $0 by accident, and it is usually the biggest one. In the worked example below, flour is $1.15 of a loaf whose true cost is $8.15. Labor is the cost.
Overhead — oven energy, booth-fee share, utilities. One honest number per batch beats pretending it's free.
Waste — you bake 24 and sell 22. The batch cost divides by the units that sell, not the units you made. Skip this and you get the classic market-day story: sold out, and still lost money.
Packaging — bag, box, label, tie. Per unit, every unit, no exceptions.
Worked by hand: a batch of cookies
Classic chocolate chip cookies. Ingredients total $9.00 for the batch (flour $1.00, brown sugar $0.90, butter $3.00, eggs $1.00, chips $2.70, pantry staples $0.40). Add 45 minutes of labor at $18/hr ($13.50) and $6.00 of overhead: the batch truly costs $28.50. At 5% waste, 22.8 of the 24 cookies sell — $1.25 each — plus $0.35 of packaging: a true unit cost of $1.60.
Now price it. At a 40% target margin with a 5% channel fee, the price is $1.60 ÷ (1 − 0.40 − 0.05) = $2.91. Charge $3.00 and you keep $1.25 a cookie — a 41.7% margin. Charge the “ingredients × 2” guess of $1.50 and you lose money on every sale while feeling busy.
Margin is not markup
“I did cost × 2, isn't that 50%?” No — doubling cost is a 100% markup and a 50% margin only before fees, and the two numbers drift apart the moment a channel takes its cut. Margin is profit as a share of the price; markup is profit as a share of the cost. The calculator shows both, labeled, so the frame you think in is the frame you get.
Variants are deltas, not new recipes
Nobody asks “price this entirely new product.” They ask “how much more for gluten-free?” That's a per-batch delta: +$2.28 of ingredients on the cookie batch is +$0.10 a unit, $1.70 true cost, $3.09 at the same margin. Double chocolate (+$1.35 a batch) lands at $3.02. Price the difference, keep the margin, move on.
Then check the whole order
Per-item margins lie by omission: the card fee is per order. A market order of 12 cookies at $3.00 and a loaf at $14.00 is $50.00 of revenue, $27.35 of true cost, and a $1.75 Square fee — $20.90 of profit, 41.8%. That's the number market day actually pays you.