A bag of homemade dog treats keeps most of its price at a market: it costs $2.99 in flour, peanut butter, pumpkin and oats, rented kitchen hours, the bag and label, baking time and the card fee, and sells for $9.00, a 66.8% margin. Pet shops and groomers pay $4.75 for the same bag, which keeps 42.7%, and birthday boxes keep 60.2%. Registration and lab fees, which many states ask of pet food sellers, are a fixed cost on top. Margin = (price − cost) ÷ price. In the example below, a month of three lines brings $5,320 of sales and about $3,050 of gross profit, before registration, insurance and the owner's pay.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- A market bag: $2.99, sold for $9.00, 66.8%.
- Baking time is the biggest cost.
- Pet shop bags keep 42.7%.
- Birthday boxes keep 60.2%.
- TaroStack costs each bag from what each batch used. More below.
A bag, costed
Kaʻena Dog Treats, the made-up dog treat bakery on Oʻahu I use in these examples, bakes four batches at once and pays its time at $20 an hour:
| A bag at a market | Cost |
|---|---|
| Ingredients and kitchen hours | $1.03 |
| Bag and label | $0.44 |
| Baking time, four batches at once | $1.25 |
| Card fees, 3% of $9.00 | $0.27 |
| Cost | $2.99 |
The bag's price is in how to price homemade dog treats, and the bakery's year in dog treat business plan.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Bag of treats | Markets and online | $9.00 | $2.99 | $6.01 | 66.8% |
| Bag of treats | Pet shops and groomers | $4.75 | $2.72 | $2.03 | 42.7% |
| Dog birthday box | Markets and online | $24.00 | $9.56 | $14.44 | 60.2% |
A pet shop bag leaves $2.03, about a third of what a market bag leaves; a birthday box leaves $14.44.
A month's numbers
A month for Kaʻena Dog Treats:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Bag of treats, markets and online | 300 | $2,700 | $1,803 |
| Bag of treats, pet shops and groomers | 400 | $1,900 | $812 |
| Dog birthday box, markets and online | 30 | $720 | $433 |
| Month | $5,320 | $3,048 |
The market and online bags bring the most gross profit on fewer bags; the shops and groomers carry the name to dogs the markets never reach. Registration, lab testing and the yearly fees come out of the gross profit, as dog treat business license explains.
Get the calculator
Download the dog treat 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 per bag. Peanut butter prices move, a batch that bakes too soft is a loss, and every new recipe needs its own registration before it can sell.
How TaroStack does it
TaroStack costs each bag from what each batch used, so margins sit on real cost.
True cost from the batch. Each batch takes flour, peanut butter and pumpkin 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 bag 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.