How to price the food you sell
A good price covers your cost, pays for your work and still leaves a profit. The safest way to get there is to start from your cost per unit and add a percentage on top.
Step by step
- 1
Start with your cost per unit
Add up ingredients, packaging, gas, electricity and labor, then divide by the yield. Without this number, any price is a guess.
- 2
Choose a percentage on top of cost (markup)
Markup is how much you add to your cost. With a 100% markup, a product that costs $1.80 sells for $3.60. The formula is: price = cost × (1 + markup ÷ 100).
- 3
Check the margin you keep
Margin is the share of the price that is profit: (price − cost) ÷ price. A 100% markup gives a 50% margin; a 150% markup gives 60%.
- 4
Compare with the market and adjust
See what similar products sell for in your area. If your price is far above, review your costs and yield before cutting your margin.
Example: a slice of cake that costs $1.80
| 50% markup (33% margin) | $2.70 |
|---|---|
| 100% markup (50% margin) | $3.60 |
| 150% markup (60% margin) | $4.50 |
| 200% markup (67% margin) | $5.40 |
The $1.80 cost comes from the example in the recipe cost guide.
Markup and margin are not the same thing
Markup is calculated on cost; margin is calculated on the selling price. That is why a 100% markup does not mean 100% profit: half the price pays for the cost and the other half is margin.
When someone says they work with a "30% margin", check whether they mean on cost or on price. By the end of the month, the difference is big.
What else to factor into your price
- Card processing or delivery app fees, which come out of what you receive.
- Delivery fee: charge it separately or build it into the price, but do not leave it out.
- Discounts and freebies: if you offer them, they need to fit in your margin.
- Custom orders and made-to-order items call for a higher margin than ready-made ones.
How the app helps you set prices
- Shortcuts for +30%, +50%, +100%, +150%, +200% and +300% on cost, or type in your own price.
- Shows the real profit margin of each recipe and warns you when it drops below 30%.
- Price per unit or for the whole recipe, whichever you prefer.
- Orders with discounts and delivery fees, so the final total matches what you agreed on.
- Financial dashboard with your most profitable recipes and the ones that need attention (Premium).
Frequently asked questions
What markup should I use for baked goods and snacks?
There is no single number: it depends on your costs, your area and how you sell. Many sellers start somewhere between 100% and 200% on cost and adjust by comparing with the market. What matters is that labor is already in your cost.
How do I convert margin to markup?
Markup = margin ÷ (1 − margin). For a 50% margin, the markup is 0.5 ÷ 0.5 = 100%. For a 60% margin, it is 0.6 ÷ 0.4 = 150%.
Should I round my prices?
Rounding up ($2.70 to $3.00, for example) makes prices easier to read and protects your margin when ingredients go up. Just never round below your calculated cost.