There is SO MUCH information online about how bakers should be pricing their products to make money.

Some TRUE.

Some, total BULLSH*T!

And one mistake I see ALL THE TIME?

Bakers thinking that because they already have an ingredient on hand, they somehow don't have to account for it in their pricing.

WHAT??? 🤦🏼‍♀️

Just because you didn't have to buy the ingredient TODAY doesn't mean it didn't cost your business money.

Make it make sense, friend!

You had to pay for the flour.

The butter.

The eggs.

The vanilla.

The box mix.

The cake board.

The box.

The ribbon.

The pastry bag.

And guess what?

ALL of those things cost your business money to make and sell that product.

Whether you bought them five minutes ago or five months ago doesn't change that.

And if you're not accounting for those costs?

YOU are eventually the one paying for them.

QUICK ANSWER: Do Ingredients You Already Have Still Count Toward Your Baking Costs?

YES.

Your ingredient costs should be based on the amount of each ingredient your recipe USES, not what you happened to purchase on the day you made the order.

The basic calculation looks like this:

Package price ÷ amount in the package = cost per unit

Then:

Cost per unit × amount your recipe uses = ingredient cost for that recipe

That means if you bought flour two weeks ago and your recipe uses 300 grams of it today, those 300 grams STILL have a cost.

The flour didn't magically become free because it was already sitting in your pantry.

And THIS distinction matters way more than most bakers realize.

“But I Already Had Everything I Needed…”

Let's say you get an order for a dozen cupcakes.

GREAT.

You go to make them and realize you already have almost everything you need.

Flour? Got it.

Sugar? Got it.

Eggs? Got 'em.

Butter? Yup.

Vanilla? Plenty.

Cupcake liners and a box? Already sitting there.

The ONLY thing you're missing is heavy cream.

So you run to the grocery store, spend $8 on heavy cream, come home, and make the order.

It would be VERY easy to look at that order and think:

"Amazing. These cupcakes only cost me $8 to make!"

Friend…

That's not how that works.

You might have SPENT $8 TODAY. But that doesn't mean those cupcakes only COST YOU $8 TO MAKE.

Those are two completely different things.

Because what about the flour you bought a month ago?

The sugar from last week?

The Costco-sized box of butter you bought earlier this month?

The vanilla that's been sitting in your pantry?

The cupcake liners?

The box?

EVERY SINGLE THING that went into bringing that order to life has a cost attached to it.

And your pricing needs to account for it.

You're Calculating Your Shopping Trip- Not Your Product Cost

THIS is where so many bakers get themselves into trouble.

They look at what they physically had to purchase to complete ONE order and call that their "cost." But that's not your product cost.

That's your shopping trip.

And those are NOT the same thing.

Your actual recipe cost should reflect what the recipe consumed.

If your recipe uses:

• 300 grams of flour
• 200 grams of sugar
• 4 eggs
• 2 sticks of butter
• 1 tablespoon of vanilla
• 12 cupcake liners
• 1 cupcake box

…every single one of those things has a dollar amount attached to it.

Whether you bought it TODAY…

last week…

or three months ago…

IT STILL COST MONEY.

Your prices should be based on what it costs you to make the product itself- not what it happened to cost you the day you made it.

READ THAT AGAIN.

How to Calculate Ingredient Cost for a Baking Recipe

Okay, so how DO you figure out what those ingredients actually cost?

You're not charging the customer for an entire bag of flour every time you make a cake. Obviously.

You need to figure out what the portion you actually USED cost your business.

Let's use super simple numbers.

Say you buy a 1,000-gram bag of flour for $4.

First, calculate what one gram costs:

$4 ÷ 1,000 grams = $0.004 per gram

Now let's say your cupcake recipe uses 250 grams of flour.

Multiply:

250 grams × $0.004 = $1

The flour in that recipe costs your business $1.

You would repeat that calculation for EVERY ingredient in the recipe.

Same thing with eggs.

If you buy 12 eggs for $4.80:

$4.80 ÷ 12 = $0.40 per egg

If your recipe uses four eggs:

4 × $0.40 = $1.60

Your egg cost for that recipe is $1.60.

It doesn't matter that those eggs were already sitting in your refrigerator.

Your business still paid $1.60 for the portion of inventory that recipe consumed.

The Ingredient Cost Formula

For each ingredient:

Purchase Price ÷ Purchase Quantity × Recipe Quantity Used = Ingredient Cost

Then add each ingredient together to determine your total ingredient cost for the recipe.

If the recipe produces multiple sellable items, you can then divide your total recipe cost by the actual yield.

For example:

Total recipe ingredient cost ÷ number of sellable cupcakes = ingredient cost per cupcake

THIS is the kind of math that should be informing your pricing.

Not:

"Eh, I already had most of the stuff."

Yes, You Have to Count the “Little Stuff” Too

Now I can already hear somebody…

"But Janelle, some of those things barely cost anything."

I DON'T CARE.

A cost is a cost.

And those little amounts add up FAST when you're producing dozens, hundreds, or thousands of products throughout the year.

Think about all the things bakers regularly forget to account for:

• Salt
• Baking powder
• Baking soda
• Vanilla
• Food coloring
• Sprinkles
• Chocolate
• Fillings
• Parchment paper
• Cupcake liners
• Piping bags
• Cake boards
• Dowels
• Boxes
• Labels
• Ribbon
• Containers
• Gloves
• Inserts

One piping bag doesn't feel like a big deal.

A tablespoon of vanilla doesn't feel like a big deal.

A cake board doesn't feel like a big deal.

But the issue isn't ONE cake board.

It's one cake board…

over and over…

and over…

and over again.

Businesses don't only lose money through massive expenses.

Sometimes your profit gets chipped away a few cents or a few dollars at a time because you're continuously giving away things you never bothered to account for.

Why You're Making Sales but Still Have No Money

Have you ever had a REALLY busy week…

looked at all the orders you completed…

thought about all the money that came in…

and then looked at your bank account like:

"Where the HELL did all my money go?"

THIS may be part of the problem.

Eventually, everything you've been using has to be replaced.

Suddenly it's:

$250 at Costco.

$65 at the grocery store.

$100 at your packaging supplier.

Another $40 because you forgot three random things and had to run back to the store.

And now it feels like you're constantly treading water instead of actually swimming.

Money comes in. Money goes right back out.

And you start thinking you have a sales problem.

But friend…You might actually have a pricing problem.

The money didn't mysteriously disappear.

Your business consumed ingredients, packaging, and supplies while fulfilling the orders you already sold.

And if those orders weren't priced to recover those costs?

Guess who gets stuck paying the difference?

YOU DO.

Your customer got their cupcakes.

Costco still got its money.

Your packaging supplier got paid.

The grocery store got paid.

Meanwhile, you're wondering why YOU don't have anything left.

THAT is why knowing your actual recipe costs matters.

Ingredient Cost Is NOT the Same as Your Total Product Cost

Now here's another important distinction:

Calculating your baking ingredient costs is only the beginning of proper pricing.

PLEASE do not read this blog, perfectly calculate your flour, butter, and eggs, and then think:

"Janelle said my cupcakes cost $7 to make, so I'll charge $14 and we're good!"

NO MA'AM.

Your ingredient cost is not necessarily your total product cost.

Depending on your business and product, you may still need to account for things like:

Packaging:

Boxes, boards, ribbons, bags, labels, containers, and anything else needed to sell or deliver the finished product.

Labor:

YOUR TIME IS NOT FREE. Neither is your employee's. Baking, decorating, packaging, and producing that product requires labor.

Overhead:

Insurance, licenses, utilities, rent, software, equipment, and all the other expenses required to keep the business running.

And then…

PROFIT.

Because covering your expenses is NOT the goal.

If the business only makes enough money to pay everyone and everything except YOU…

we've got another problem. 

Knowing your ingredient cost gives you the FOUNDATION you need to start building a profitable price.

But don't confuse ingredient cost with what you should charge.

They are NOT the same thing.

And THIS Is Exactly Why Bakers Start Guessing

If you're reading this thinking:

"Okay Janelle, but now I have to figure out what 300 grams of flour costs… and three tablespoons of vanilla… and four eggs… and half a container of frosting… AND remember what I paid for all of it???"

YES.

And THIS is exactly where people start getting lazy with the math.

Because doing this manually can become annoying AF.

Especially when:

Your recipe uses grams, but you buy ingredients in pounds.

You buy vanilla by the gallon but use tablespoons.

Your butter went up in price again.

Your supplier changed package sizes.

You started buying a different brand.

You switched vendors.

You have 47 ingredients.

You have 22 recipes.

And now you have twelve spreadsheets open while digging through Costco receipts, trying to remember what you paid for something.

Eventually you throw your hands up and say:

"Eh… close enough."

And friend…

“Close enough” can get VERY expensive when you're running a business.

This Is One of the Reasons I Built Costli

After YEARS of teaching bakers and food business owners about pricing, profitability, and knowing their numbers, I kept seeing the same problem.

It's not always that people don't WANT to price correctly. Sometimes the process they're using makes it so freaking complicated that they stop doing it consistently.

And THAT is a huge reason I built Costli.

Inside Costli, you can create a Digital Pantry using the ingredients and supplies you actually purchase for your business.

You enter things like:

• what you bought
• how much you bought
• what you paid
• the unit of measurement

Then you can use those ingredients inside your actual recipes so you can see what those recipes are costing your business.

Which means that flour you bought from Costco two weeks ago?

Still accounted for.

The butter sitting in the refrigerator?

Accounted for.

The vanilla you've had for a month?

Accounted for.

Because your ingredients don't become FREE the second you put them on the shelf.

Costli helps you STOP relying on memory, random calculations, and “close enough” pricing so you can actually KNOW your numbers.

LEARN MORE ABOUT COSTLI

Before You Change Your Prices, Do This

I'm NOT telling you to finish this blog and immediately increase everything on your menu by 40%.

Please don't do that. I'm telling you to start with DATA.

Pick ONE product you sell regularly.

Just one.

Pull out the recipe and go line by line.

Ask yourself:

Am I actually accounting for EVERYTHING this recipe uses?

Not just what you purchased for the order.

Not just the expensive ingredients you remember.

Not just what was missing from your pantry that day.

EVERYTHING.

Calculate what each portion costs.

Add it together.

Then compare that number to what you've been assuming that recipe costs you.

You might discover you're doing better than you thought.

OR…

You might discover you've been accidentally giving away a whole lot more than you realized.

Either way?

Now you KNOW.

And knowing gives you something guessing never will:

The ability to actually DO something about it.

Because “I already had it” doesn't make it free.

Your business paid for it.

Your customer needs to pay for it too.

Xo, Janelle

P.S. If reading this made you realize you have NO idea what some of your recipes actually cost you… THAT is exactly why I built Costli.

Costli helps you track ingredient and supply costs, build out your recipes, and see what your products are ACTUALLY costing your business- without digging through receipts, doing random conversions, or living inside an ugly spreadsheet.

We’re opening Costli to the public VERY soon. 👀

👉🏼 LEARN MORE ABOUT COSTLI