Cheesecake earns a good margin as a whole cake sold direct and a thinner one by the slice to restaurants, because cream cheese is expensive and the bake is slow. Bars and minis use the same batter in smaller pans and earn well per box. Margin = (price − cost) ÷ price. In the example below, a 9-inch cheesecake costs $24.33 to make and sell direct and goes for $51.25, a 52.5% margin. A month of four ways of selling brings $5,050 of sales and about $2,690 of gross profit.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- Count your time as a cost, even if you don't pay yourself yet.
- A 9-inch cheesecake direct: $24.33, $51.25, 52.5%.
- Cream cheese is half the ingredient cost.
- Restaurants pay less a cake but order every week.
- Bars and minis earn well per box.
- TaroStack costs each cheesecake from what each batch used. More below.
A cheesecake, costed
Sakakawea Sweets, the made-up home baker in Bismarck, North Dakota, bakes 9-inch New York cheesecakes six at a time and sells them frozen:
| A 9-inch cheesecake, direct | Cost |
|---|---|
| Cream cheese, eggs, sugar, sour cream, crust | $12.21 |
| Box and board | $2.25 |
| Labor: 150 minutes a batch of 6 at $20 an hour | $8.33 |
| Card fees, 3% of $51.25 | $1.54 |
| Cost | $24.33 |
How the cheesecake's price was set is in how to price cheesecake, and the business year in cheesecake business plan.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| 9-inch cheesecake | Direct, frozen | $51.25 | $24.33 | $26.92 | 52.5% |
| 9-inch cheesecake | Restaurant, weekly | $35.00 | $22.79 | $12.21 | 34.9% |
| Cheesecake bars, box of 6 | Direct and markets | $24.00 | $8.92 | $15.08 | 62.8% |
| Mini cheesecakes, 4-pack | Holiday markets | $20.00 | $9.80 | $10.20 | 51% |
The restaurant cake leaves $12.21, thinner than $26.92 direct, but arrives every week.
A month's numbers
A December month for Sakakawea Sweets:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| 9-inch cheesecake, direct | 40 | $2,050 | $1,077 |
| 9-inch cheesecake, restaurant | 16 | $560 | $195 |
| Cheesecake bars, box of 6, direct and markets | 60 | $1,440 | $905 |
| Mini cheesecakes, 4-pack, holiday markets | 50 | $1,000 | $510 |
| Month | $5,050 | $2,687 |
Whole cakes direct bring the most gross profit; the bars and minis add almost as much from the same batter. North Dakota's rule for selling them frozen is in can you sell cheesecake from home.
Get the calculator
Download the cheesecake margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator holds one cost a cake. Cream cheese bought three times at three prices in December changes every cake's margin.
How TaroStack does it
TaroStack costs each cheesecake from what each batch used, so margins sit on real cost.
True cost from the batch. Each batch takes cream cheese and eggs at the price of the deliveries they came from, so a price rise shows in the next batch's cost.
Labor on the batch. The minutes a batch took are recorded on it, so the hours behind each product are on record.
Margins by product. Margins are reported per product on that actual cost, and a price-creep report per supplier shows whose prices moved.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What a cheesecake cost | One price from last season | Cost from the batch's deliveries |
| The hours behind a batch | Remembered | Labor minutes on the batch |
| An ingredient creeping up | Noticed late | A price-creep report |
| Margins by product | Re-worked by hand | Margins on real cost |
Recipes, batches, costing and margin reports are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.