When you sell what you make at home, the cost you forget most is your own. You add up the ingredients, see that a bottle of hot sauce costs $1.40 to make, sell it for $9 and think you make $7.60. But the bottle, cap and label cost almost as much as the sauce. Your three hours on a Sunday never appear on a receipt. And the gas comes from the same supply you cook dinner with. The result is a price that looks healthy and a business that does not pay you.
What home brands usually leave out
- Your time. Cooking, bottling, labelling, answering messages, arranging delivery. All of it is work.
- Packaging and labels. Jars, bottles, caps, bags, stickers. On small products they can cost as much as the ingredients.
- Home energy. It does not arrive on a separate bill, but you pay it.
- Small purchases. Buying a little at a time at the supermarket costs more per kilo than buying from a wholesaler or cash and carry.
- Gifts and samples. The bottle for a friend, the one you send to a shop to try.
- Delivery. If you pay for it or absorb it in the price, it is a cost.
Worked example: hot sauce in 150 ml bottles
You make batches of 30 bottles. Per bottle:
| Item | Per bottle |
|---|---|
| Ingredients (chillies, vinegar, garlic, salt) | $1.40 |
| Bottle, cap and label | $1.15 |
| Your time: 3 h × $20 ÷ 30 bottles | $2.00 |
| Gas and power: $3 per batch ÷ 30 bottles | $0.10 |
| Loaded cost | $4.65 |
You sell it at $9.00.
- What you thought you made: 9.00 − 1.40 = $7.60 per bottle
- What you really keep: 9.00 − 4.65 = $4.35 per bottle
- Margin: 4.35 ÷ 9.00 = 48.3%
At 60 bottles a month, the gap between what you thought ($456) and what is real ($261) is $195. And that $261 comes after paying yourself $20 an hour.
These figures are before any sales tax. Whether you need to charge it depends on where you are and how much you sell, so check your local tax rules or ask an accountant.
The numbers that matter most
Your hourly rate. Decide what your hour is worth and put it in the cost, even if at first you do not pay yourself all of it. The guide on costing your own labour shows how to measure minutes per batch, and the one on how to pay yourself separates your wage from what you take out of the business.
Loaded cost per unit. Ingredients plus packaging, time, energy and waste. If you only look at ingredients, you are seeing half the picture. Read what loaded cost means and how to cost packaging and labels.
Cost to deliver an order. If you sell through Instagram or WhatsApp, every order has a delivery cost or the cost of your time taking it. The guides on selling through WhatsApp and Instagram and the real cost of delivery help you decide between charging for delivery and setting a minimum order.
Business money kept apart. If ingredients come out of the household shop, you never know what you spent. A separate account or even an envelope fixes that; the guide on separating business and personal money shows how to start.
When you want to sell more
Selling to shops or cafés may bring labelling and registration rules for packaged food. Check with your local food authority before you start, and read the guides on what goes on a food label and moving from a home kitchen to a production kitchen. Fixed costs change at that step, and your price has to carry them.
Do it with the calculator
The food cost calculator costs one recipe at a time and saves nothing, so note the result or copy the link. Enter what you pay for each ingredient, how much a batch uses, the bottle and label as packaging, your minutes and your hourly rate. It tells you what each bottle really costs and the price you need for the margin you want.