Analyzing the cost of making homemade chocolate chip cookies isn’t as hard as most people envisage, although it can be confusing due to the calculations involved. It’s better to start analyzing with the recipe you are conversant with, adding the prices or receipts for each major item on it.
While doing this, it might be pertinent to convert some of your recipe’s measurements from cups, tablespoons and teaspoons to pounds, grams and ounces. This might be where you need the help of a conversion app. Nonetheless, you want your ingredients’ units of measurement to line up with the product’s measurement of weight on the package or vice versa, which makes it easy to calculate the cost per cookie.
The Estimated Cost Breakdown to Make Chocolate Chip Cookies
A typical measurement and cost list for your chocolate chip cookies should look like this: $2.38 for 5 pounds of flour, $1.00 for 2 pounds of baking soda, $.58 for 26 ounces of salt, $4.99 for 1 pound of butter, $3.5 for 6 pounds of sugar, $1.5 for 4 pounds of brown sugar, $3 for a dozen eggs, $4.12 for 2 ounces of vanilla extract, $2.38 for 12 ounces of semi-sweet chocolate morsels, and $4.88 for 8 ounces of chopped walnuts.
For the sake of this article and for proper clarity, we will be calculating the cost of a recipe that makes 24 chocolate chip cookies. For instance, if a dozen eggs cost $3 and the recipe calls for 2 eggs, the cost of the eggs per batch of cookies is 50 cents or slightly more than 2 cents per cookie or 24 cents per dozen cookies.
While for the sugar (normal and brown sugar), if a 10-pound bag costs $5 and the recipe calls for 1 pound (or 2 cups) of sugar, the cost of sugar per batch of cookies is 50 cents or slightly more than 2 cents per cookie or 24 cents per dozen cookies.
Once you have analyzed and stated the cost of each ingredient per cookie, you will have to sum them together to get the total cost per cookie. Again, for the sake of clarity, imagine that all the main ingredients to make 1 cookie total 27 cents. To account for any extras, such as salt, baking soda and vanilla extract, it’s advisable to add a few cents, meaning that each cookie probably costs more like 30 cents to make.
Catalog each of your recipe’s costs, and then periodically check for ingredient price increases, so that you can make changes to your prices, as needed. You should also factor your time into the cost of making the cookies, let’s assume and state the cost of your time at $20 per hour.
Hence, if you can make 4 batches or 96 cookies in an hour, that’s $5 per batch or roughly 21 cents per cookie. Using the above cost analysis, it simply means that each cookie now costs 51 cents to make.
You also need to consider your overhead costs, like your power bill, the wages of a helper, your initial costs to set up your home bakery and any losses from burnt or botched batches. Note that to recoup some of these costs, you have to do a bit more maths. You might have to summarize the cost of each cookie to at least 60 cents or about $7 per dozen to avoid losing money.
This brings us now to the profit margin of Chocolate chip cookies!
The Profit Margin on Chocolate Chip Cookies
Note that the profit margin on a product is simply the difference between your cost and the selling price. This cost can be the wholesale price you pay your supplier or the cost to manufacture the product if you make it yourself.
You will then have to minus the cost from the sale price to get profit margin, and divide the margin into the sale price for the profit margin percentage. However, before you can calculate your profit margin of your chocolate chip cookie, you have to first work out your costs. There are typically two types of costs to understand: direct and indirect.
1. Direct Cost (Ingredients)
These are the costs of every single ingredient used to make your cookie, just like we stated above. You have to know the cost of a single chocolate chip and the cost of every tablespoon of sugar. If you are using 24 chips in each cookie, you need to know how adding 24 chips affects your profit margin.
Note that adding 30 chips rather than 24 chips means you will have fewer chips to make the next cookie. It’s as simple as that! The price of those chocolate chips takes all of these food costs into account. That’s why most successful bakeries are still in business.
2. Indirect Costs (Non-food)
This involves all the costs (apart from ingredients), that you must have incurred from running your food business. These expenses are sometimes referred to as operational costs. You definitely have to make allowance for these when pricing your product. Here is a sample list of indirect costs:
- Rent (when producing food from a commercial kitchen)
- Mortgage payments (when producing food from an approved home kitchen).
- Commercial rates (refuse collection, water etc.)
- Equipment (even if you already own it)
- Packaging
- Logo design
- Business planning software
- Labour (how long did you or employees take to make the cookies?)
- Lighting and heating
- Website hosting and maintenance
In this business era, a lot of bakeries or home based baking businesses crumble because the owners failed to properly inculcate the indirect costs (non-food) into the selling price. It would be a mistake to assume that the costs of your cookies should not include the costs of labour and operational costs (i.e. the costs of running the business). Just because you ‘already own’ an oven does not mean you should not include the cost of it and electricity as costs of production. It is a wrong approach to product costing and many businesses have paid dearly for it.
Calculating your Profit Margin
Notably, according to the bakery industry data, your new chocolate chip cookie business should aim for a Gross Profit (GP) of between 65-70%. This is a standard profit margin in the industry. Let’s imagine you decided to sell your cookies for $10 per pack. At this point you must have worked out, just like we stated above, that your ingredients (direct costs) amount to $7.
To effectively calculate your profit margin, minus the cost ($7) of your cookie ingredients from your selling price ($10). That leaves you with the sum of $3. At this point, convert this result to percentage: $3/$10 x 100 = 30%.
30% is your profit margin on the above product, and since you should be aiming for a gross profit of 65-70%, you may need to choose cheaper ingredients or increase your sales price significantly in order to cover costs.
Conclusion
Note that these calculations above are merely for guidance purposes. You may have to ‘play’ with the price of your cookies if not enough people are buying them at your stipulated price. But do not forget to ensure that your price covers your costs and also appeals to customers.
Note that you can make the best cookies in the world, but if they cost more than your competitor’s cookies, not enough people will buy them. Similarly, you can make affordable cookies but if your profit margin is too low, your business will struggle and may have to close.
Frequently Asked Questions
How Much Should I Charge For Chocolate Chip Cookies?
In general, you should charge plan to charge between $2.50 and $5 for individual chocolate chip cookies, or between $10 and $20 if you plan to sell them by the dozen. At a minimum, your pricing should account for the cost of ingredients, equipment, your time, and the size of each cookie.
How Much Does It Cost To Make A Batch Of Chocolate Chip Cookies?
You might have to summarize the cost of each cookie to at least 60 cents or about $7 per dozen to avoid losing money.
How Much Does A Batch Of Cookies Cost?
In short, you should plan to charge between $2 and $6.50 per cookie, or between $8 and $15 per dozen if you choose to sell your cookies in bulk. When setting your pricing, you should consider the cost of both the ingredients and baking equipment, as well as your time, and complexity of the cookie.
How Much Can You Sell Homemade Cookies For?
Well, it depends on you, but please note that a single homemade cookie tends to sell for about $3-4, and cookies by the dozen sell for anywhere between $10-25.
How Do I Figure Out How Much To Charge For Cookies?
To compute cost on a per cookie basis, I simply divide $48 by the recipe yield (30 cookies) which gives me $1.60 per unit (cookie) for labor. But don’t forget that Overhead or indirect costs have to be included to price your cookies. Overhead includes both fixed and variable costs
Is It Cheaper To Buy Or Make Cookies?
Interestingly, it turns out that despite the expensive ingredients, it is cheaper to make your own cookies than buy them from the store.
What Are The Best Store Bought Chocolate Chip Cookies?
- (Tie) Tate’s Bake Shop Chocolate Chip Cookies.
- (Tie) Pepperidge Farm Double Chocolate Nantucket.
- Walmart Great Value Classic Chippers.
- Famous Amos Chocolate Chip.
- Keebler Chips Deluxe Original.
- Trader Joe’s Organic Chocolate Chip Cookies
How Do You Price Cookies For A Bake Sale?
Here are Bake Sale Pricing Guide;
- Keep things affordable, and try to have a range of prices from $1 up so anyone can purchase a cookie or a muffin.
- Sell more items by pricing things in groups: “3 chocolate chip cookies for $2” or “Cupcakes $2 each or 3 for $5.” This will entice people to spend more money.
What Is A Good Price For Homemade Baked Cookies?
A good price for homemade baked cookies should be between $2 and $6.50 per cookie, or between $8 and $15 per dozen if you choose to sell your cookies in bulk.
How Much Does A Box Of Girl Scout Cookies Cost?
All Girl Scout Cookies cost $5 a box. This simplifies goal-setting and money management for girls and makes pricing clearer to consumers.
How Much Should I Charge For Homemade Cupcakes?
For a standard cupcake, you should plan to charge between $2 and $2.50. Though, your pricing should increase or decrease based on three factors: the event at which your cupcakes will be served, cupcake size, and decoration.
Are Homemade Cookies A Good Gift?
Holiday gifts are best when they’re unique and personable—and yet, homemade cookies are the one holiday gift that feels special and intimate even though they’re made in batches. Regardless of the cookie you choose to create, baking is only half the fun when gifting cookies in the holiday season.
What Is The Best Way To Ship Homemade Cookies?
Here is How to Package Cookies for Mailing;
- Use a durable, rigid box or empty tin as a mailing container.
- Wrap four to six cookies of the same size together in aluminum foil, plastic wrap or plastic bags.
- Don’t pack crisp and soft cookies together.
How Much Should I Charge For Cookie Dough?
The price for most tubs/boxes of cookie dough ranges from $10 – $16, with a profit margin of 40% – 60%. That means your organization is earning $6 – $8 for each package of cookie dough sold. Decide if that price point is reasonable for families in your community, and don’t forget about the cost of shipping too.
How To Preserve The Shelf Life Of The Choc Chip Cookies?
At room temperature: Keep them sealed up in an airtight container. They will be good for two weeks. In the freezer: Keep them in the freezer for up to six months. If you need to revive them and crisp them up, a few minutes in a 300ºF should do it.
Can You Bake Cookies At Home And Sell Them?
Yes, you absolutely can sell cookies baked at home, and interestingly selling them online is your largest market!
Is It Legal To Sell Homemade Cookies?
It is always legal to advertise your business and take cookie orders over the internet, but in many states, you have to deliver the cookies in person or have your customers pick them up from you.
What Do You Do If Your Cookies Are Underbaked?
Once it is clear that you do have limp cookies or less-than-crispy crackers, put them back into a preheated 300° F or 325° F oven, regardless of the original (presumably higher) baking temperature. You can also make use of 300° F for items that can’t afford to get darker, and 325° if a little extra color won’t hurt.
How Does Baking Soda Help In Baking Cakes And Cookies?
When added to the dough, baking soda releases a carbon dioxide gas which helps leaven the dough, creating a soft, fluffy cookie. Baking soda is generally used in recipes that contain an acidic ingredient such as vinegar, sour cream, or citrus.
What Happens If You Don’t Use Baking Soda In Cookies?
It is possible to make cookies without baking soda or baking powder, but the resulting cookie will be dense. This is because carbon dioxide is not being produced by a chemical reaction that typically occurs when baking soda or powder is present in the cookie batter.
Why Do Baked Cookies Always Come Out Kind Of Soft And Chewy?
It is because of high moisture content, so the recipe, baking time, and temperature must be adjusted to retain moisture. Again, slower cooking will help yield a chewier cookie. The outsides will be a little softer, too.
What Is The Proper Order To Put Ingredients In When Baking Homemade Cookies?
- Sift Dry Ingredients.
- Cream Butter and Sugar.
- Beat in Eggs.
- Add Dry Ingredients to Wet.
- Fold in Chips or Nuts.
- Shape Cookies.
- Bake and Cool
What Is The Secret To Soft Cookies?
Underbaked cookies are the secret to softness. Using cornstarch in the dough is another secret to softness, as well as the secret to thickness. Using more brown sugar than white sugar results in a moister, softer cookie. Adding an extra egg yolk increases chewiness.
How Much Is A Dozen Decorated Sugar Cookies?
Typically, decorated sugar cookies start at $55/dozen, with a minimum order quantity of 12 per shape/design/color combination.
How Many Cookies Is A Dozen?
A bakers’ dozen is 13 cookies.
What Type Of Permits Do You Need To Sell Cakes From Home?
There are two types of permits, Permit A and Permit B. Permit A is for those who will sell their baked goods directly to consumers, including wedding cakes and sales at farmer’s markets, festivals, etc. Permit B is for those who will sell through local restaurants or grocery stores.
Do I Need A Food Hygiene Certificate To Sell Cakes?
While a food hygiene certificate isn’t compulsory it is strongly recommended by the Food Standards Agency (FSA) and other official bodies. Like larger food businesses, food hygiene and safety is just as important when you are selling cakes from home.
What Is The Usual Temperature For Baking Cookies?
Generally, cookies are baked in a moderate oven — 350 degrees F (175 degrees C) — for 8 to 12 minutes, depending on the size of the cookie. For chewy cookies, allow them to cool on the baking sheet for 3 to 5 minutes before transferring to a cooling rack.
How Many Cookies Are In 3 Dozen Cookies?
3 dozen would be 36 cookies unless it is a baker’s dozen in which case your total would be 39 cookies.
Why Are Baking Homemade Cookies So Much Better Than Buying Store Bought?
Homemade cookies are typically made with better quality ingredients than store bought cookies. They use real butter, vanilla, chocolate chips, flour, and no highly processed additives or artificial flavors. Still, cookies are going to have fat and sugar and aren’t ever labeled as a “health food”.
How Much Should You Mark Up Baked Goods?
Experts recommend adding a 50 percent profit margin to baked goods. Remember, it’s easier to lower prices after you have launched than to raise them, so think about giving yourself some room for downward adjustments in your pricing.
Is A Cookie Business Profitable?
Cookies remain one of the most profitable items in the retail bakery business, and automated depositing is paving the way for even greater efficiencies.
How Much Does A Cookie Decorator In United States Make?
The highest salary for a Cookie Decorator in the United States is $37,563 per year. The lowest salary for a Cookie Decorator in the United States is $20,551 per year.
Can I Bake Cookies At 325 Instead Of 350?
350 ° is the standard temp for a cookie, and it’s a great one. Baking at 325° also results in an evenly baked cookie, but the slower cooking will help yield a chewier cookie. The outsides will be a little softer, too.
How Does Oven Temperature And Time Affect Baking Cookies?
Time and temperature work together in baking. A low temperature and longer baking time yield crisper, thinner cookies; a higher temperature and shorter baking time make softer, thicker cookies.