Cottage food price per unit.

Worked example

A batch costs $24 in ingredients and makes 12 units. Labour of 2.5 hours at $18 is $45 and overhead is $6, so the batch costs $75, or $6.25 a unit. Packaging adds $0.60, for a cost of $6.85 per unit. A 50% margin gives a retail price of $6.85 / 0.50 = $13.70, with $6.85 profit a unit and $82.20 a batch. A 40% wholesale discount gives $8.22, leaving $1.37 a unit, a 16.67% margin.

How it works

Cost per unit = (ingredients + labour + overhead) / units per batch + packaging per unit. Retail price = cost per unit / (1 - target margin). Wholesale price = retail price x (1 - wholesale discount).

Paying yourself an hourly rate is what stops a product from selling at a loss once your time is counted. The tool has no built-in price or wage; use the real receipts for your ingredients and a rate you would accept. If wholesale margin looks thin, raise the retail price or lower the discount. Before selling, check which foods you may make at home and sell, and what labelling, licensing or inspection applies. Which licences, permits and inspections apply to you depends on your product and your jurisdiction, so check with your local health authority. This is a planning estimate, not legal, licensing, tax or financial advice.

Sources and basis (checked 2026-10-08): Food licences, Canadian Food Inspection Agency (inspection.canada.ca/en/food-licences), opened 2026-10-08: it states that under the Safe Food for Canadians Regulations certain food businesses require a licence. Which licences, permits and inspections apply to you depends on your product and your jurisdiction, so check with your local health authority.

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FAQ

How do I price homemade baked goods?

Add the ingredient, labour, overhead and packaging cost of a unit, then divide by one minus your target margin. The result is the price that earns that margin.

Should I count my own time?

Yes. Enter the hours per batch and the hourly rate you want to earn. Leaving your time out makes the price look profitable when it pays you nothing.

What is the difference between retail and wholesale price here?

Wholesale is the retail price less the discount you give a shop that resells your product. The tool shows the profit per unit at both prices.

Do cottage food rules differ by place?

Yes. What you may sell from a home kitchen, and the labelling and licensing that apply, varies by jurisdiction. Check with your local health authority. This is a planning estimate, not legal, licensing, tax or financial advice.