Cookies for me are a way to fun way to pay off student loans. I needed some extra cash, I wasn't sure how to make it, I leveraged a skill I had. But in all reality, how can you actually make any money selling cookies? or really anything for that matter.
The trick is to learn how to properly price your goods and get familiar with this very easy formula:
Profit = Revenue - Costs
Profit is the end game. It's the money you make AFTER you've taken out the raw material and other such costs. This is the money you want to make. When I first started baking cookies I charged 2$ a cookie. It costs me about 8$ to bake a dozen so think about it, 24-8 = 16$ factor that into 2 hours of straight work and I was making 8$ an hour. I wasn't going to pay any student loans off that way. (unless I save all my 8$ and don't buy those 2 cookie cutters I saw on JH Cookie Co's Website last night).
Realistically, this just didn't make sense. So after a year of charging 2-3$ I decided to adjust my pricing structure because I had more experience, and knew reasonably and competitively, charging 3-5$ a cookie isn't crazy, it's the norm.
I started looking at cost in terms of raw materials, time, and misc. admin costs
1. Price of raw materials
To find the total cost of raw materials, I converted all my recipes to weight then do a lot of math to figure out my cost per dozen of cookies. Below is a snapshot of how accomplished this.
(P.S. if you want help solving these types of equations, let me know. I went to school from elementary to graduation in Asia. I can convert anything. )
I did this for ALLLLLL of my materials, flour, baking powder, meringue powder, food colouring, piping bags (average)...etc and what I came out with was that each dozen of cookies comes to roughly 7-8$.
Hand frosted cookies are not something you can do on a whim. Every aspect of them takes time. This definitely something that needs to factor in the overall price of your cookies. If you're only making 8$ at the end like I did, that's no bueno and you're gonna rack up a fortune in cookie cutter debt.
3. Admin Costs
These are things like taking orders, following up with customers, Delivery Costs, Additional Supplies for various orders...All the behind the scenes things that people don't realize are out there
So how does this all factor into making money?
Well after I had sorted the above stuff out and decided I was going to charge more for my goods, I started calculating it. If I charge 3$ a cookie and my average order is 2 dozen, then realistically I can make 13.25$ an hour.
Add that up and I typically do about 4 dozen cookies a week, that's a little over 400$ a month, or about 5,000$ a year give or take if they want more detailed cookies.
So for me, that's worth it. BUT! realize, I have been doing this for a while, my skills have gotten WAYYYY more advanced than my first cookies, and you have to take that into consideration. Don't start out charging 3-4$ if your quality is that of a 2-3$ cookie right now. It's okay to adjust your pricing as you go, in fact it's healthy so if you eventually open a shop people aren't freaked out when you go from 2$ per to 5$ per (a friend of mine told me that's what happened to her). Regardless, if you're in it to help yourself out financially, charge what you think is fair that's going to also help you. And if you're not in it for the "cha-ching", then that's great! Continue to do you. but make it worth your while (monetarily or for fun) regardless.
Good luck Cookiers!