{
  "slug": "cottage-food-pricing",
  "title": "Cottage Food Pricing Calculator",
  "heading": "Cottage Food Business Pricing Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/cottage-food-pricing",
  "summary": "Price homemade jams, baked goods, and cottage-licensed food to actually profit.",
  "description": "Cottage food producers operating under state cottage food laws (home-based, limited to non-hazardous foods like baked goods, jams, and dry mixes) often price based on ingredient cost plus 'what feels fair,' which routinely undercounts labor, packaging, and the fixed costs of running a licensed home operation like liability insurance and labeling compliance. This calculator builds price from ingredient cost per unit, labor time valued at a real hourly rate, packaging and labeling cost, and a per-unit allocation of fixed annual costs (insurance, permits, market fees) divided across expected annual unit volume, then applies your target margin. Most cottage producers are shocked to see their real all-in cost per jar or loaf is 40-60% higher than ingredient cost alone once labor is valued honestly.",
  "formula": "Fixed cost per unit = annual fixed costs ÷ annual unit volume. Total cost = ingredient + labor + packaging + fixed allocation. Price = total cost ÷ (1 − target margin%).",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=cottage-food-pricing",
  "inputs": [
    {
      "id": "ingredientCost",
      "label": "Ingredient cost per unit",
      "kind": "number",
      "hint": null,
      "default": 1.4,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "laborMin",
      "label": "Labor minutes per unit",
      "kind": "number",
      "hint": null,
      "default": 12,
      "unit": null,
      "min": 0,
      "max": null
    },
    {
      "id": "laborRate",
      "label": "Labor value per hour",
      "kind": "number",
      "hint": null,
      "default": 20,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "packagingCost",
      "label": "Jar/label/packaging cost per unit",
      "kind": "number",
      "hint": null,
      "default": 0.85,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "annualFixed",
      "label": "Annual fixed cost (insurance, permits, fees)",
      "kind": "number",
      "hint": null,
      "default": 900,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "annualUnits",
      "label": "Expected annual units sold",
      "kind": "number",
      "hint": null,
      "default": 1200,
      "unit": null,
      "min": 1,
      "max": null
    },
    {
      "id": "marginPct",
      "label": "Target margin",
      "kind": "number",
      "hint": null,
      "default": 40,
      "unit": "%",
      "min": 5,
      "max": 80
    }
  ],
  "outputs": [
    {
      "id": "price",
      "label": "Price per unit",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "totalCost",
      "label": "Total real cost per unit",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "laborCost",
      "label": "Labor cost per unit",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "fixedPerUnit",
      "label": "Fixed cost allocation per unit",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "profitPerUnit",
      "label": "Profit per unit at this price",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Ingredient cost per unit: 1.4 $",
      "Labor minutes per unit: 12",
      "Labor value per hour: 20 $",
      "Jar/label/packaging cost per unit: 0.85 $",
      "Annual fixed cost (insurance, permits, fees): 900 $",
      "Expected annual units sold: 1200",
      "Target margin: 40 %"
    ],
    "outputs": [
      "Price per unit: $11.67",
      "Total real cost per unit: $7.00",
      "Labor cost per unit: $4.00",
      "Fixed cost allocation per unit: $0.75",
      "Profit per unit at this price: $4.67"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter ingredient cost per unit ($).",
      "Enter labor minutes per unit.",
      "Enter labor value per hour ($).",
      "Enter jar/label/packaging cost per unit ($).",
      "Enter annual fixed cost (insurance, permits, fees) ($).",
      "Enter expected annual units sold.",
      "Enter target margin (%).",
      "Read your price per unit on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "ingredientCost": 0.84,
        "laborMin": 7,
        "laborRate": 12,
        "packagingCost": 0.51,
        "annualFixed": 550,
        "annualUnits": 700,
        "marginPct": 24
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "ingredientCost": 1.4,
        "laborMin": 12,
        "laborRate": 20,
        "packagingCost": 0.85,
        "annualFixed": 900,
        "annualUnits": 1200,
        "marginPct": 40
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "ingredientCost": 2.2399999999999998,
        "laborMin": 19,
        "laborRate": 32,
        "packagingCost": 1.36,
        "annualFixed": 1450,
        "annualUnits": 1900,
        "marginPct": 64
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What counts as a cottage food fixed cost?",
      "a": "Product liability insurance (often $300-500/year for a small operation), state cottage food permit or registration fees, farmers market or venue application fees, and label design/printing setup costs. These don't change with how many jars you make, so spreading them across expected annual volume is the fair way to bake them into unit price."
    },
    {
      "q": "Why value my own labor if I'm not paying myself a wage?",
      "a": "If you don't price in labor, you can't tell the difference between a product that's actually profitable and one that's only 'profitable' because you're working for free. Valuing your time, even conservatively at $15-20/hour, shows you which products are worth scaling and which ones cost more in time than they're worth at your current price."
    },
    {
      "q": "Do cottage food laws limit how much I can sell?",
      "a": "Many states cap annual gross sales for cottage food operations (commonly $25,000-50,000, though this varies significantly and some states have no cap), and most restrict sales to direct-to-consumer channels like farmers markets and online direct orders rather than wholesale to retail stores. Check your specific state's cottage food law before scaling production."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/farmers-market-booth-breakeven",
    "https://www.revenuelab.fyi/toolbox/jam-preserves-batch-cost"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Cottage Food Pricing Calculator (https://www.revenuelab.fyi/toolbox/cottage-food-pricing)"
}