Why most home bakers underprice
Most cottage bakers price by guessing what the customer will pay. The result: a margin that barely covers ingredients, let alone your time. This guide gives you a real formula.
The Siftii pricing formula
Price = (Ingredients + Packaging + Labor + Overhead) × Markup
- Ingredients: actual cost per unit, including waste.
- Packaging: boxes, liners, ribbon, labels.
- Labor: your hourly rate × time per batch ÷ yield.
- Overhead: utilities, insurance, market fees, software.
- Markup: 2x-3x for retail, 1.5x-2x for wholesale.
Step 1: cost a single recipe
Weigh every ingredient. Convert pack price to cost per gram. Add packaging. Add 5-10% for waste.
Step 2: add your labor
Decide your hourly rate. $25-50/hr is realistic for skilled baking. Time yourself for one full batch. Divide by yield.
Step 3: add overhead
Monthly overhead ÷ expected monthly units sold = overhead per unit.
Step 4: apply markup
For direct-to-customer retail, multiply by 2.5x-3x. This covers profit, taxes, and growth.
Common mistakes
- Forgetting labor.
- Forgetting packaging.
- Matching grocery-store prices (you can't compete; don't try).
- Discounting for friends without tracking the cost.
Use Siftii to do this automatically
Siftii costs every recipe down to the cent, factors in labor and overhead, and updates pricing when ingredient costs change. Try free →