Pricing Baked Goods: How To Do It The Right Way
Home bakers, are you struggling with pricing home-baked goods? Have you been wanting to learn how to sell your baked goods for good money? Im going to share my simple method for managing the variable costs involved with pricing home-baked goods so you can make a nice profit in your bakery. This works for home bakeries, online bakery sales, farmers market sellers, and even commercial bakeries or retail bakery shops. Its time to stop guessing and get a strategy for your bakery pricing!
Taking A Hobby To A Side Hustle
When Nancy Thompson Heathcote started taking her homemade pimento cheese into the school where she worked in Raleigh, North Carolina, everyone suggested she sell it.
I went over to this womens clothing store and took them a couple pints and some Triscuits and said: Put this in your breakroom and let me know if you want to order some, she recounted. In a couple days, the orders started coming in and it just picked up from there.
She now sells 10 or more containers most weeks using Venmo and cash for payments. Pints cost $12 and half pints are $6. She also sells three types of muffins for $15 a dozen.
Ill put a photo on my Facebook and say: Who needs pimento cheese for July 4 weekend? And people just text me or message with what they want, Thompson said. Some customers order as many as 25 pints for holiday gifts.
Sometimes she delivers, but just leaves the food chilling in a cooler on her back porch for neighbors and friends who live close to pick up themselves.
I started it out as just a hobby and more and more people kept saying: You need to sell this, said Natalia Lima, owner of Curious Cat Bakery in St. Petersburg, Florida.
She makes vegan croissants and desserts for about 10 different coffee shops and restaurants in the Tampa Bay area. She started out selling to friends and friends of friends, but soon saw there was a big demand for vegan treats throughout the area. She made a few visits with samples to retailers and most of them wanted to order.
Selling In The Community
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Home Baking Business Ideas
If you look around you, you can find all kinds of home baking business ideas. For instance, where do coffee shops get their baked goods? Certainly some of them have in-house bakers, but not all of them do. One of the first places to begin, for you, may be by learning how to sell baked goods to coffee shops. You could also explore how to sell pies to restaurants in addition to how to sell cakes from home. Whether youâre selling cakes from home in Australia or selling cupcakes from home in Australia or supplying cakes to cafes, youâll need to stay updated about local regulations before you begin and as long as you continue in your business.
For instance, selling baked goods from home in California may be a little more difficult than selling cakes to friends and family in UK. The more familiar you are with the regulations, the better able you are to stay on the right side of them.
Donât forget to consider baking for certain groups. It helps you stand out and means youâll have less competition if you offer specialized baked goods for childrenâs parties, diabetic people, vegans, etc.
Good luck with your baking business!
Charging The Right Amount For Your Bakery Items Is A Great Way To Grow Your Small Business
Now that you know how to price baked goods the right way, you are on the way to making a profit on every sale. Just be sure to factor in the cost of your ingredients, labour cost, packaging, and profit to come up with a good price.
In the beginning stages of your business, it may be hard to imagine that someday your business will grow into something much larger. One day you may decide to expand into a retail or commercial space. You may have a bookkeeper, an accountant, or even an investor. You might even decide to sell your business!
Understanding terms like profit margin, cost of goods sold, and gross profit are going to be important. Start now and learn as much as you can about the business side of baking so that you can build the foundation for success!
Are you looking for an easy way to calculate your prices without hours of work? Check out The Perfect Pricing Method. Its a cake calculator, cookie calculator, and recipe coster all in one. Click here to learn more about the Perfect Pricing Method.
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Bake It Til You Make It
The work thatâs required to get a home-based baking business off the ground is well worth it. You get to make your own sweets, offer them for sale, and make money in the process. You could combine these efforts with selling coffee online to create a dessert-centric business. Delivering value to buyers through unique and mouth-watering products will foster brand recall, whether you’re selling alcohol online or dry food products.
Do You Need A License To Sell Baked Goods From Home
Depending on where you live, you may need a home bakery license. You will need to check with state and local laws to determine the rules on selling food from home in your area and how those rules apply to you. The truth is that the answer to the questions, âDo you need a license to sell baked goods from home in Florida?â and âDo you need a license to sell baked goods from home in California?â are likely very different.
That is why it is essential, before you begin trying to sell food from your home, to determine what the regulations in your area are and what they mean for your home kitchen. In some areas, for instance, you only need to obtain a business license and a food permit. In other areas, however, your kitchen may be required to pass rigorous health code inspections before you are able to obtain a baking license for an at home business.
Another consideration when asking âDo I need a license to sell food from my home?â involves the types of food youâre hoping to sell. For instance, the state of Massachusetts does not allow you to make potentially hazardous foods, such as cheesecakes and cream-filled pastries in a home-based bakery. It is essential to understand these restrictions before buying equipment, creating a menu, and especially before you begin selling food from your home online.
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Create Social Media Pages
Social media is your friend when it comes to starting your baking business. As people are constantly on their phones these days, you want to be able to advertise your baked goods for people to see.
Facebook and Instagram are both great platforms to share your baked goods. They allow you to share photos, prices, contact information, and descriptions of what you bake. People can easily message you to order goods and find out more information.
What Is The Cost Of Goods Sold For Home Bakers
Cost of goods sold is a term that refers to the direct cost of making your products. These include the cost of ingredients, your labor to make the item, variable costs, and fixed costs.
Did you see in the above section that I said direct costs? The cost of goods sold is the cost directly related to the sale of your product. It doesnt include general selling expenses like the salary you pay yourself or your marketing expenses. That will come from your profits.
Well get into the indirect costs later, but for now, lets just focus on the cost of goods sold for your recipe.
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Best Place To Sell Baked Goods Online
As long as you have the website and digital tools to meet customersâ needs, you can sell baked goods anywhere online. Modern Internet technology allows anyone with business gumption to get their own venture up and running.
BlueCartâs online marketplace simplifies your online food businessâs tech needs. Schedule a demo today to learn more about our solutions.
You can also use existing platforms if you only plan to sell in your free time, or create a full website for your new food company. Here are a few more options to consider:
Best Practices For Selling Baked Goods
As of October 2, 2017 Wisconsin home bakers are now free to legally sell their not-potentially hazardous baked goods directly to customers! The following outlines what you need to do to sell baked goods in compliance with the court decision along with best practices. Please note that, because of the Judges 2017 ruling, we do not have a law nor do we need a law to legally bake and sell non-hazardous items. Our Wisconsin Legislative branch has the right to pass a reasonable law, but in the meantime , again through the Judicial branch, we are free to bake.
What is a Not-Potentially Hazardous Baked Good?
A not-potentially hazardous baked good is one that can safely remain unrefrigerated and do not support the rapid growth of bacteria that would make people sick when held outside of refrigerated temperature. . Lower-risk food means food in a form or state that is not capable of supporting the growth of disease-causing organisms or the production of toxins. One or more of the following factors usually apply to these foods:
Water activity of 0.85 or less, or
A pH value of 4.6 or less.
The good news is most cookies, muffins, cakes, and breads are typically not-potentially hazardous and have a low moisture content that inhibits mold growth, but it is important to remember not all are and as food entrepreneurs prioritize and take responsibility for the safety of our products.
Where Can We Sell Our Baked Goods?
Allowed:
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Licenses And Health Regulations
Contact your local board of health to find out whether you need to have your baking premises inspected. You may need to have health certificates indicating that you are in good health. A business license may also be required.
Another part of the process of learning how to sell homemade baked goods is to check your phone book under government listings or go to your state’s official web site to learn about the specific requirements for your area. You also need to find out whether any regulations apply that require a list of ingredients used in your products to be provided.
What Are The Overhead Costs For A Home
There are two kinds of additional expenses that you can have in your baking business: fixed costs and variable costs. These are expenses for items that are not part of the ingredients or labor involved in making the recipe.
Here is a definition of the types of additional non-food expenses you may have:
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How Often Should You Take Your Baked Goods To The Coffee Shop You Are Working With
Once you create a working partnership with a coffee shop or a small business or cafe, the next step is to decide on the frequency in which you will bring your products to their store for them to sell.
The best way to do this is to speak with the business owner and set up a schedule based on what works best for them.
You will probably go through a few trial weeks where you will be bringing more or fewer products to the business based on the number of customers who are buying your product.
It will be a guessing game for a few weeks until you find the perfect standard order based on what products are selling well and flying out of the display case and which products are taking a while to sell.
This standard order will be what the business or coffee shop orders from you every week. This will mean that it is a standing order so you do not have to communicate unless something major changes.
Many times, a holiday will bring around changes where you might have to make more cookies and other pastries than you normally would as people are buying things for presents and parties, etc.
After the standard order is figured out, the coffee shop should only contact you if there is a major change in your standard orders, though every business is different so you may partner with a business owner who wants to stay in constant contact and put in a different order week to week.
The key is to stay flexible and be ready to give the owners exactly what they want!
I Have Pets Can I Still Sell Goods Baked At Home
Yes, but pets as well as children are not allowed in the kitchen during baking.
For more information about the ruling, visit nj.gov/health. For more information about the New Jersey Home Bakers Association, visit njhomebakers.org.
Sarah Griesemer joined the USA TODAY NETWORK New Jersey in 2003 and has been writing all things food since 2014. Send restaurant tips to sgriesemer@gannettnj.com.
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Selling Baked Goods Online
The art of selling baked goods online has grown in popularity over the years. So much so that many states have created cottage food laws to accommodate and regulate the industry. If youâre interested in learning how to sell baked goods online, this will be a great guide to help you get started.
Are you ready to learn how to start selling baked goods from home? Letâs get started!
The first thing you need is an audience. Do people compliment your pie crusts endlessly? How about your cookies or cakes? Do you have a knack for decorating elaborate cupcake creations? Where are your talents? Thatâs a great place to build. And the people who love your baking already make an excellent audience for testing the water.
Once you have your audience, consider starting a Facebook group or making Twitter announcements, even an Instagram account so that people are aware of your business and when you have goods to sell. You can even offer people the opportunity to sign up for text alerts.
Now itâs time to open up your test kitchen and start creating amazing products to sell. Popular items to sell include any and all of the following:
- Cookies and bars.
Think outside the box a bit when it comes to how to sell baked goods from home. Consider offering products and baked goods that cater to all audiences and are harder to find in stores and bakeries. This might include gluten-free items, vegan baked goods, low carb baked items, and no sugar added items as well.
Fresher Taste And Texture
It can take anywhere from a couple of weeks to a month to bake, pack, and ship those baked goods you love at your local grocery store. In fact, thatâs part of why so many preservatives and additives are used. These artificial ingredients preserve the shelf life of the baked good and keep it fresh until you purchase it. I say why not skip the additives and chemicals and instead bake our own cookies and cakes? Not only will you have a much fresher product, but it will also taste light years better!
Making your own baked goods from scratch can be a rewarding and fun experience. Almost nothing beats the smell of freshly baked cookies or cakes in your kitchen! What are some of your favorite desserts and pastries to bake? Do you have any shortcuts or recipes that even a busy, working woman can manage to make?
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Create A Signature Item And Holiday Goods
To make your business stand out, you should aim to have a signature item. This could be custom birthday cakes or mini cheesecakes, something that is intriguing to people.
Holidays are also a great time to offer customizable and themed items. People often buy baked goods for Christmas, Valentines Day, Easter, and Thanksgiving. By making baked goods specifically for these holidays, you stand a good chance of selling more items.
Dont be afraid to experiment and try new items. If you can, try to create some items that are allergy-friendly to expand your market. Try making some goods that are gluten-free or nut-free, as these are some of the most common allergies.