Bakery Business
How to Price Baked Goods for a Small Bakery Business
Short answer
Work out the ingredient cost per unit, add packaging, then divide by your target food cost percentage (commonly 25-35% for retail bakery) to get a starting price. Layer in labour, overheads and a profit margin, then sanity-check against your market. For custom work, charge per hour of decorating time on top of ingredient cost.
Table of contents
Step 1: cost your recipe accurately
Follow along
0/7 doneRecalculate ingredient costs at least quarterly. Butter, cocoa, nuts and eggs move enough to quietly erase a margin.
Step 2: apply a target food cost percentage
Most retail bakeries target a food cost of 25-35% of the selling price. If a cupcake costs €0.65 in ingredients and packaging and you target 30%, the starting price is 0.65 ÷ 0.30 = €2.17, which you would round to €2.25.
Lower-labour, high-volume items can carry a higher food cost percentage. Highly decorated items should carry a lower one, because the labour is the real cost.
Step 3: put labour and overheads into the price
Pricing custom cakes and special orders
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0/6 doneWholesale and café accounts
Wholesale prices typically sit at 50-60% of your retail price, which only works if your per-unit labour drops with volume. Before accepting a wholesale account, model the batch size, the delivery cost and the payment terms. A large order at a bad price is the fastest way to be busy and unprofitable.
Raising prices without losing customers
Frequently asked questions
Written by
Crave Bake Supply Team
We supply professional European baking ingredients to bakeries, pastry shops and home bakers from our Miami warehouse. Our guides come from the questions our customers ask us every week. Ask us anything.
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