You're probably losing money on every batch you sell

“The most common pricing mistake is calculating ingredient cost and then adding a small markup. This feels logical, but it ignores the majority of what it actually costs to run a home bakery.” — real buyer, https://www.bakingsubs.com/blog/how-to-price-baked-goods-for-a-home-bakery

The honest answer to 'how much should I charge for my baked goods' is a formula, not a multiplier. Add up four things per batch: ingredient cost, packaging (boxes, bags, labels, ribbon), overhead (a flat $1-$3 for utilities, equipment wear, and your cottage-food license spread over batches), and labor (your hourly rate times the minutes you actually spend). Divide that total by your yield to get a true cost per unit. For example, a batch of 12 cookies with $4 of ingredients, $1.20 packaging, $1.50 overhead, and 45 minutes at $25/hr ($18.75 labor) costs $24.45 to make, or about $2.04 each.

Now price it for a target margin, not a markup, and remember they are not the same thing. To hit a 60% margin you divide cost by (1 minus the margin), so $2.04 / (1 - 0.60) = $5.10 per cookie, or roughly $61 for the dozen. A sanity check from bakers: ingredients should be only about 25-35% of your selling price. If you priced at 'ingredient cost times 2' you would charge $0.66 each and pay yourself nothing for 45 minutes of work. That gap is exactly why so many talented home bakers quietly run at a loss.

The mistake that traps almost everyone is the one in the quote above: cost the ingredients, slap on a small markup, and call it pricing. Labor is the biggest hidden cost and the first thing people refuse to charge for. Recipe Cost & Pricing Studio builds every batch from ingredients plus packaging, overhead, and an explicit labor line (rate times minutes), then suggests a price from your target margin using the correct math. It is a one-time purchase that runs offline as a single file with no account and no subscription, so your costs stay on your device and you stop guessing what to charge.

Common questions

• Should I just multiply my ingredient cost by 2 or 3?
  No. The 2x or 3x rule ignores labor, packaging, overhead, and platform fees, which are the majority of your real cost. Use ingredients + packaging + overhead + labor as your cost base, then apply a target margin. Ingredients should land at roughly 25-35% of the final price, not half of it.
• How do I include my own labor when I make everything myself?
  Pick an hourly rate ($20-$35/hr is a common floor) and multiply it by the minutes a batch actually takes, then add that as a separate line in your batch cost. Paying yourself labor is what separates a priced product from a loss. Recipe Cost & Pricing Studio has a dedicated labor line that does rate times minutes for you.
• What margin should I aim for on baked goods?
  Many home bakers target a 50-60% retail margin. Use the formula price = cost / (1 - margin), so a $2.04 unit at 60% margin sells for about $5.10. Avoid competing as the cheapest, since the lowest price attracts the customers who complain most and stay the shortest.