How to Price Homemade Fudge, and Start a Candy Business

Price homemade fudge from the full cost of a box: the ingredients for the batch divided by the pieces you can sell, the box and label, your hands-on time and a share of overhead, then add your margin and check it against what fudge sells for near you. In the example below, a 3 lb pan of chocolate fudge costs $8.71 in ingredients and gives 46 sellable pieces, so a half-pound box of eight costs $6.34 all in. At $12 a box, $24 a pound, that's a 47% margin; wholesale is thin unless you make bigger batches. Starting a small candy business from home is mostly about your state's cottage food rules, a candy thermometer, good boxes, and planning for the holidays, when much of the year's candy sells. Below is the cost, the price, wholesale, and what starting out takes.

The short version

• Cost a batch, divide by the pieces you can sell, then cost the box you sell them in.
• Your hands-on time is the biggest line; the ingredients are smaller than you'd think.
• In the example, a half-pound box costs $6.34 and sells for $12.
• Wholesale needs bigger batches, or the margin disappears.
• Add-ins like macadamia nuts raise the cost; price those boxes higher.
• Check your state's cottage food rules before you sell from home.
• TaroStack costs each batch, records the cook temperature, and dates every box. More below.

A batch, costed

Windward Roots, the made-up taro business I use in these examples, makes chocolate fudge in a 9 × 13 pan:

The pan is about 3 lb, cut 6 × 8 into 48 pieces of about an ounce. Trimming the edges leaves 46 to sell.

The labor covers cooking to temperature, beating, pouring, cutting the next day and boxing. How to cost packaging properly, including the box you'll be tempted to leave out, is in packaging cost per unit.

The price

Margin            = (price − full cost) ÷ price
Price for 47%     = $6.34 ÷ (1 − 0.47) = $11.96, so $12

A chocolate macadamia version adds about a cup of nuts per pan at $15 a pound, $4.46 a pan, or 78 cents a box, for a full cost of $7.12; at $13.50 it keeps the same margin. Then look at what fudge sells for at shops and markets near you, and where yours sits. How to price baked goods and treats generally is in how to price baked goods.

Wholesale

A shop that sells your box at $12 will want to pay about $6 to $7.50 for it, and at $6.34 of cost, that's close to nothing. Wholesale works when the batch is bigger: a double pan takes about an hour and a half hands-on for 92 pieces, which brings labor to $2.61 a box and the full cost to $5.47, so $7.50 wholesale leaves 27%. How to set wholesale prices for handmade goods is in how to price handmade items for wholesale.

Starting a candy business

How cottage food works, state by state, is in how to start a cottage food business. This is general information, not legal advice.

Where this stops working

The cost sheet is right for one flavor in October. By December there are six flavors, chocolate went up, a batch seized and went in the bin, and the boxes are on their second order at a different price. The holiday rush is planned on a guess, the oldest boxes are at the back, and on December 20 the macadamia runs out while the peppermint piles up.

How TaroStack does it

TaroStack keeps the cost, the cook and the dates of every batch, and helps you get ahead of the holidays.

Each batch, costed. Each flavor is a recipe, and a shared chocolate base can be a sub-recipe inside every flavor that uses it. Units convert: buy sugar by the 50 lb bag and chocolate by the case, use them by the gram. Record a batch and TaroStack takes the ingredients off stock from the lots used, at what you paid, and divides by the pieces that came out good, so a seized batch shows in the cost and recipe truth shows if it keeps happening.

The cook, recorded. Batch record forms are filled in as the batch is recorded, with your own fields, like the temperature the batch reached, with limits, so a batch pulled off the heat too early or too late is flagged. Each batch's boxes go into a lot with a best-by date from the item's shelf life, sold first-expired-first-out.

And the holidays, planned. Planning works out what to make and what to buy from your orders and your own sales history, including last December's, so the chocolate and boxes are ordered in time. The reorder list rounds up to the supplier's case size and minimum, and the expiry forecast shows which boxes will pass their date unsold while there's time to sell them.

Lots, expiry, the reorder list, recipes, and batches with their cost and records are on every plan, from $49 a month; planning is on Standard at $99. 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.

Questions people also ask

How much should I charge for homemade fudge?

Price from the full cost of a box. In the example, a half-pound box costs $6.34 all in, and $12, or $24 a pound, gives a 47% margin. Then check what fudge sells for near you.

How much does it cost to make a pound of fudge?

The ingredients for a 3 lb pan are $8.71 in the example, about $3 a pound. With the box, your time and overhead, a half-pound box costs $6.34.

Can I sell homemade fudge?

In many states, yes, under cottage food rules, which often cap sales and require a label. Check your own state's rules before you sell.

How do I start a candy business from home?

Check your state's cottage food rules, cost and price each product, buy a reliable thermometer and good boxes, write a correct label, insure the business, and plan production ahead of the holidays.