Freeze-dried candy turns cheap candy into a premium snack, and the margin per bag is wide. What decides profit is the freeze dryer: one machine runs one cycle a day, about 16 bags, so the machine's capacity caps the month. Margin = (price − cost) ÷ price, before the machine's cost. In the example below, a 3-ounce bag costs $2.68 to make and sell at a market and goes for $6.75, a 60.3% margin. A month of four ways of selling brings $2,965 of sales and about $1,680 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 3-ounce bag at market: $2.68, $6.75, 60.3%.
- One dryer runs about one cycle a day; capacity caps the month.
- Power for each cycle is a cost.
- Wholesale earns less a bag.
- TaroStack keeps each cycle as a batch and costs every bag. More below.
A bag, costed
Frost Moon Treats, the made-up freeze-dried candy maker in Utah I use in these examples, fills 16 bags from a 24-hour cycle:
| A 3-ounce bag, at a market | Cost |
|---|---|
| Candy and power for the cycle | $1.19 |
| Bag and label | $0.35 |
| Labor: 45 minutes a cycle of 16 bags at $20 an hour | $0.94 |
| Card fees, 3% of $6.75 | $0.20 |
| Cost | $2.68 |
How the bag's price was set is in how to price freeze-dried candy, and the business year in freeze-dried candy business plan.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Freeze-dried candy, 3 oz | Markets | $6.75 | $2.68 | $4.07 | 60.3% |
| Freeze-dried candy, 3 oz | Online, shipped | $8.00 | $3.63 | $4.37 | 54.6% |
| Freeze-dried candy, 3 oz | Gift shop, wholesale | $4.00 | $2.48 | $1.52 | 38% |
| Party favor bags, 12 | Birthday orders | $36.00 | $11.98 | $24.02 | 66.7% |
The gift shop bag leaves $1.52; the market bag $4.07. With one dryer at about 30 cycles a month, every bag sold wholesale is a bag not sold at market.
A month's numbers
A month for Frost Moon Treats:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Freeze-dried candy, 3 oz, markets | 220 | $1,485 | $895 |
| Freeze-dried candy, 3 oz, online | 90 | $720 | $393 |
| Freeze-dried candy, 3 oz, gift shop | 100 | $400 | $152 |
| Party favor bags, 12, birthday orders | 10 | $360 | $240 |
| Month | $2,965 | $1,680 |
About 480 bags a month is all one dryer can fill, so the mix of channels decides the month. The license is in license to sell candy.
Get the calculator
Download the freeze-dried candy 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 bag. Cycles that come out chewy and run again, and a second dryer bought on credit, change the real margin per bag.
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 candy and power 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.