Non-Decorated Cookie Pricing: Competing W/ Big-Box Stores

Business By bbvaccaro Updated 20 Mar 2016 , 4:42am by costumeczar

bbvaccaro Posted 19 Mar 2016 , 5:01pm
post #1 of 6

I know the question of pricing has been asked a lot & the advice given is usually to check out competitor's pricing. But, what if there is no competition? I live in a small rural town with zero bakeries. The closest bakeries are an hour away & in large cities (Memphis being one). There are some home bakers who sell cakes, pies, etc. and decorated cookies but to my knowledge there isn't anyone who sells non-decorated cookies. So, my question is: how can you judge what your market will tolerate when you literally have no competition other than big-box stores like Wal-Mart or fast food chains that sell cookies for less or right at my cost to make them? I don't' feel like I should compare the pricing from the larger cities whose market could tolerate a higher price  

5 replies
bbvaccaro Posted 19 Mar 2016 , 5:06pm
post #2 of 6

P.s. I know people would be willing to pay more for home-made & higher quality cookies, but it is intimidating knowing that my only "competition" are places that sell cookies for $2-4 a dozen! 

FrostedMoon Posted 19 Mar 2016 , 5:16pm
post #3 of 6

I would do an analysis of how much the cookies cost you to make.  Be sure to add in a decent wage for yourself, cost for electricity, etc etc.  That will give you a starting point for breaking even.  Then you need to decide what a reasonable profit margin is for your cookies.  I don't think it's possible for any home baker to compete with grocery stores or big box store prices because they can bake and buy ingredients in bulk, and can maybe even get away with a smaller profit margin since they are typically going for volume of sales as opposed to quality.  However, the truth is your cookies are worth what someone is willing to pay for them.  Most home bakers need to have a product that has qualities customers can't get at big box stores because in order to be successful with the home business, customers will have to be willing to pay more for them.  If customers in your area aren't willing to pay your price (production cost +profit margin), your area might not be able to support the product you are trying to sell.


Here's a decent article with better details than I can give.  http://www.entrepreneur.com/article/53786

ypierce82 Posted 19 Mar 2016 , 5:48pm
post #4 of 6

And never think of Wally world or any big chain as competition... they are not. 

bbvaccaro Posted 19 Mar 2016 , 7:02pm
post #5 of 6


Quote by @FrostedMoon on 1 hour ago

I would do an analysis of how much the cookies cost you to make.  Be sure to add in a decent wage for yourself, cost for electricity, etc etc.  That will give you a starting point for breaking even.  Then you need to decide what a reasonable profit margin is for your cookies.  I don't think it's possible for any home baker to compete with grocery stores or big box store prices because they can bake and buy ingredients in bulk, and can maybe even get away with a smaller profit margin since they are typically going for volume of sales as opposed to quality.  However, the truth is your cookies are worth what someone is willing to pay for them.  Most home bakers need to have a product that has qualities customers can't get at big box stores because in order to be successful with the home business, customers will have to be willing to pay more for them.  If customers in your area aren't willing to pay your price (production cost +profit margin), your area might not be able to support the product you are trying to sell.


Here's a decent article with better details than I can give.  http://www.entrepreneur.com/article/53786

Thanks for the reply! I have already started to price out the cost of my recipes (ingredients, production, packaging, etc.) and I have a good idea of what I would like my profit margin to be. I'm just having trouble judging how the prices would go over. 

costumeczar Posted 20 Mar 2016 , 4:42am
post #6 of 6

The only way to find out if the prices will go over well is to start selling at those  prices. You might not have any trouble at all, and you might find out that your market won't support what you need to charge to make a decent amount. If you have literally no competition it will be a guessing game, but you should still price things out the way that YOU need to. If it turns out that you can't sell for what you need to to make a profit, it might not be a product that people want in your area. No way to know until you try...

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