Why most bakers underprice
If you have ever added up ingredient costs and slapped a small markup on top, you are not alone. But that formula misses labor, packaging, delivery time, platform fees, and the value of your skill. The result: you work harder and earn less.
The real cost formula
Price = Ingredients + Packaging + Labor + Overhead + Profit Margin
Start by tracking every ingredient for a single batch. Include the cost of boxes, bags, stickers, and ribbon. Then add your time at an hourly rate you would accept for skilled work — not minimum wage.
Overhead covers things like electricity, equipment wear, insurance, and any permits. Finally, add a profit margin of at least 15-20% on top. That margin is what lets you reinvest, handle slow weeks, and grow.
Setting your hourly rate
A good starting point: what would you pay someone else to do this work? For most cottage bakers, that is somewhere between $20 and $40 per hour depending on your area and complexity.
Communicating your prices
Post your prices clearly on your order form. Customers who see transparent pricing up front are more likely to order and less likely to haggle. OrderPost lets you set per-item prices and show them right on the form — no back-and-forth DMs needed.
When to raise prices
If you are booked solid every weekend, your prices are probably too low. Raise them 10-15% and see what happens. Most sellers lose fewer customers than they expect and make more per order.