How Much Can You Make Selling Baked Goods from Home?

The Short Answer

Most cottage food bakers earn between $500–$2,000/month part-time, with top performers hitting $5,000–$10,000/month. Your ceiling depends on your state's revenue cap, your product mix, and how seriously you treat it as a business.

Revenue by Stage

• Month 1–3 (Getting Started): $200–$500/month. You're finding your products, building word-of-mouth, and figuring out pricing.
• Month 3–6 (Building Momentum): $500–$1,500/month. Repeat customers, social media traction, maybe your first farmers market.
• Month 6–12 (Established): $1,500–$4,000/month. Consistent orders, efficient processes, possibly a waitlist for busy periods.
• Year 2+ (Scaling): $4,000–$10,000+/month. Multiple channels, holiday rushes, possibly considering a commercial kitchen.

What Affects Your Income

Product Choice Matters

Not all baked goods have the same margins:

• High margin: Custom decorated cookies ($4–8 each), specialty cakes ($50–150+), macarons ($3–5 each)
• Good margin: Artisan bread ($6–12/loaf), brownies/bars ($3–5 each), cinnamon rolls ($4–6 each)
• Lower margin: Basic cookies ($1–2 each), muffins ($2–3 each), so volume is needed

Sales Channels

Diversifying where you sell increases income:

• Direct orders (online/phone): highest margin, lowest effort per sale
• Farmers markets: great for new customers, but booth fees + time eat into margins
• Wholesale to cafés: lower margin but consistent volume (check your state laws)
• Special events: weddings, corporate events = big orders

The Math

Let's say you sell custom sugar cookies at $48/dozen. Sounds great, right? Let's break it down:

• Ingredient cost: $8/dozen
• Packaging: $3/dozen
• Labor: 2 hours of decorating, baking, and cleanup

That leaves $37 to cover your labor. For 2 hours of work, that's $18.50/hour before overhead costs like electricity, gas, and equipment wear. Once you factor those in, your real earnings shrink fast.

This is why pricing matters so much.

Track Everything

You can't grow what you don't measure. Track every order, every expense, every hour. KneadIt gives you the financial dashboard to see exactly where your money goes and where it comes from.