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Cookie Pricing – My two cents.

Oct 10, 2018 | Cookie Decorating Resources, Small Business | 17 comments

When potential clients ask for my pricing table, I get sticker shock, a lot. In an attempt to educate the masses on why these cookies are so pricey, let’s look a breakdown of materials and process. — This doesn’t apply just for cookies, but for many home based, hand-crafting business.

Fall Themed Sugar Cookies

 Here’s what goes into making ONE DOZEN of these cookies, which I charged $55 USD for. These are standard size cookies, approx. 3-4 inches on their longest side. I challenge every single cookier out there to hit pause and do this analysis for their situation. It’s truly eye opening. Some folks will be faster or slower, that’s fine, baseline it according to YOUR reality.  

  1. Make Dough: 10 minutes (note– I did not account for chilling time because it’s dead time and I do other stuff while dough chills)
  2. Cut and bake — some of these had to be hand cut because I don’t own the cutter for them, so it takes longer! 20 minutes
  3. Make Icing: 5 minutes
  4. Color icing & make a few different consistencies: 15 minutes
  5. Decorate: 50 minutes — note I did not count drying time! And did not count time resting in-between layers– this is all actual HANDS ON time for the dozen
  6. Clean Up: 10 minutes
  7. Packaging: 10 minutes
  8. Client communications (starts at step 0 really), research, cookie design, coordinating pickup: 1 hour — clients expect this part to be free, but you need to find a way to account for this cost in your service

I also accounted for the fact that some of these steps can be done concurrently, for example while the cookies are baking and cooling, I can make and color the icing. So this way, I am not double-counting my time.  So here’s what it breaks down to for ONE DOZEN cookies:

  • Material Cost: $5.25 (materials, ingredients+ piping bags, coloring, icing, labeling, bags, etc. everything)
  • Total Time: approx. 3 hours (BTW– this is pretty fast for a detailed dozen cookies)

Again, I charged $55/doz — so what does that mean? Simply put, profit = revenue – costsThis means: $55 – $5.25 – $1.50 for misc. costs below = $50$49.75/3 hrs = Means my hourly rate is: $16.58 per hour. — READ ON to understand what this actually means because this DOES NOT tell the whole story. Misc. Costs: You are not literally decorating cookies every waking minute. Lots of time is dedicated to admin, answering client inquiries that go nowhere, dealing with a gazillion questions that also go nowhere. There are costs associated with packaging materials (and SEARCHING for the right packaging!), ink, gas, & other small materials. Every cello bag, every sticker, every baggie and shipping box = $$ . Keep in mind you’re also buying tons of cookie cutter, stencils, airbrush machine/food colors, brushes, and misc. other supplies; how can you account for this?  We still need to pay taxes (although we do get to write off all business related purchases), don’t get insurance, paid time off or any kind of other benefits that many “full time day jobs” get– but we really SHOULD be treating our businesses like what it is, a business! If you are serious about doing this for profit:

  1. Get REALLY DAMN GOOD at what you do so you can CHARGE appropriately for YOUR SKILL LEVEL
  2. Price appropriately and understand that it’s OK and expected that not everyone can or want to afford your product. 75% of my client inquiries don’t result in a custom cookie order– I’m ok with that!

Something you CAN do it to find ways to REDUCE TIME SPENT on decorating and find ways to automate other processes like ordering, label printing, shipping (if applicable), etc. wherever possible. Make ordering easier- utilize forms and invoicing services– usually these are super cheap add ons for your website or come on mobile apps and it’s so worth it to spend that few bucks. Don’t cheap out on things that will save you so much time in return.  At the end of the day – everyone’s situation is different. Depending on what your goals for your business are (hobby, part time, full time), you need to set your targets appropriately. Pricing should also vary based on YOUR SKILL LEVEL & EXPERIENCE. I stress this so much. If you are a beginner you need to get real about your product quality and make sure if you are charging a lot, it’s worth it. Same goes for the cookie pros– charge what you’re worth. This can also differ based on location– some metropolitan areas can support higher prices than others. Do your research. Understand your demographic.  Some other things to keep in mind:

  • Charging more is really uncomfortable. But growth does not come without discomfort, like any other form of change. You can expect to lose some existing clients, but you’ll probably gain more. You will take on less orders, but make more money.
  • We, as small business are ALL ACCOUNTABLE for upholding the perception of similar businesses. This means that if some of us undercharge, customers will start expecting that. So when you are under charging, you are doing nobody a favor at the end of the day, except for the client you undercharged– except even then, that is a temporary shame since they will walk away with a false perception…and have unrealistic expectations for their next order… so you decide if that’s good or bad.

If you are struggling with your business and are SERIOUS about taking a hard look at your business and making some changes for the better, I do offer a very comprehensive cookie consult in my shop (Link TBD as I updated my website)


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17 Comments

  1. Nadia

    What a fantastic read!!! Thankyou so much for breaking it down the way you have! Puts everything into perspective!

    Reply
    • Heather

      Question: is there a certain app you recommend for Invoices/billing?

      Reply
      • Lisa He

        I use Square for payment processing AND invoicing. 🙂 — my referral link is HERE and we both benefit if you sign up!

        Reply
  2. TeKay

    Definitely the motivation I needed this morning I love and understood everything that you said and will apply that to my business!! Thanks for the knowledge and advice!

    Reply
  3. Pao

    Wow! Thank you for all this information. This is what I call good motivation.

    Reply
  4. Georgina

    I definitely needed to hear this. It is such a struggle for me. Thank you for sharing this info.

    Reply
  5. Jenny Lee

    Amazing breakdown!!! Thank you. I tell my clients all the time! They don’t understand why it takes so long!

    Reply
  6. Nicole Mayo

    This is sooooo so so helpful. Thank you! I know the value of my work, I just have the worst time asking for the valued price. This (as well as searching other people’s prices) affirms that it is absolutely reasonable to ask for the right price. Thanks for including the reality that 75% of your inquiries don’t want to spend that much. Great post.

    Reply
    • Lisa He

      Thank you! Glad it helps someone 🙂

      Reply
      • Deana

        I make decorated cookies as a side business. A lot of times I’m making them for my kid’s teachers for holidays and teacher appreciation week. I was approached by a teacher to make specialized cookies (pj masks and Sesame Street). I need to purchase the cookie cutters, should i charge her??
        I’m already giving her a little discount on the cookies…just need a second opinion.
        Thank you!!!

        Reply
        • Lisa He

          I usually don’t charge specifically for cookie cutters– but make sure as you become a business that the cost is built into your product pricing for the long term

          Reply
  7. Michelle

    This was amazing! I have been searching for a good read related to pricing. You break it down really well and offer valuable insight, thank you so much!!!

    Reply
  8. Neha Ali

    As someone who is starting a cookie business, what rough prices would you recommend?

    Reply
    • Lisa He

      Hi Neha, looks like you just read the pricing post– and I think maybe you already know the answer, but I can’t tell you. I don’t know your work, where you’re located, what your demographic is. I hesitate to provide any kind of advice without context 🙂

      Reply
  9. Giuliana

    Such a great read. Thanks Lisa

    Reply
  10. Corinne Dewey

    Yes exactly! My mom always judges my prices and says they’re too high so I get guilty and lower them but you’re exactly right about how many things factor into the cost of a decorated cookie, it’s not just baking and slapping some icing on them.

    Reply
  11. Jennifer

    Thank you so much! If you are the cheap cookie lady you are harming our amazing industry. If you are buying from the cheap cookie lady, shame on you! Louder for the ones in the back…<3

    Reply

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