What to charge
Updated
On this page8
What goes into a unit
- Ingredients, which for sugar work are cheap and for chocolate are not.
- Packaging, which for a gift product can approach the cost of the contents.
- Labor, which is the dominant cost in most sugar confectionery.
- Energy, for long cooks and for holding chocolate at temperature.
- Loss: scorched batches, grained batches, trimmings and breakage.
Count the hours honestly
Most confectionery is slow handwork: cooking, cooling, cutting, wrapping. Wrapping in particular is far slower than anybody estimates and is almost never in a first costing. Time one real production run end to end and use that number.
Breakage and trim are real
Brittle breaks unevenly, caramels are cut with offcuts, and molded pieces fail. A yield figure measured over a few runs is worth more than a theoretical one, and on an expensive chocolate the difference is material.
Price the gift package as part of the product
In this category the package is not overhead, it is part of what the buyer is paying for. Costing it as a necessary evil leads to a cheap presentation on a product whose entire proposition is that it is nice enough to give somebody.
The season distorts everything
Most of the year’s revenue can arrive in a few weeks, which means the rest of the year is funded by it. Pricing on peak-season volume and then carrying twelve months of costs is how a good season turns into a difficult year.
Wholesale is a separate calculation
Not retail with a discount. It has to leave the buyer a margin and cover the consistency and packaging a shop expects, and for a seasonal product it has to be committed to months ahead. Work it from the cost up.
Decide early whether you are a gift business
A gift product carries its packaging cost and earns it back in the price; a pantry product cannot. Trying to be both with one package usually produces something too expensive for the shelf and too plain for the gift table, and that is a pricing failure that looks like a design one.