Every bakery owner discovers that calculating cake margins isn't as straightforward as it first appears. Your shop sales carry different expenses than custom orders - from packaging costs to labor time for personalized work. Miss these distinctions and you'll never identify your most profitable sales channel.
Why different margins per channel matter
Your cake costs vary dramatically between shop display and custom orders. Shop sales mean display expenses and potential waste. But orders? They demand specialized packaging and extended labor for custom details.
💡 Example:
Chocolate cake for 8 people:
- Ingredients: €8.50
- Labor (2 hours): €36.00
- Energy/overhead: €2.50
Base cost price: €47.00
Channel-specific cost breakdown
Shop sales:
- Display costs (cooling, space): €1.50
- Waste risk (10%): €4.70
- Service/packaging: €2.00
Total cost price shop: €47.00 + €8.20 = €55.20
Order/pickup:
- Special packaging: €3.50
- Extra decoration/personalization: €5.00
- Order administration: €2.50
Total cost price order: €47.00 + €11.00 = €58.00
Margin calculation by channel
Apply this formula to both sales channels:
Margin % = ((Sales Price - Cost Price) / Sales Price) × 100
💡 Example calculation:
Sales price both channels: €75.00 (incl. 9% VAT)
Excl. VAT: €75.00 ÷ 1.09 = €68.81
- Shop: (€68.81 - €55.20) ÷ €68.81 × 100 = 19.8%
- Order: (€68.81 - €58.00) ÷ €68.81 × 100 = 15.7%
⚠️ Note:
Always calculate with the price excluding VAT. The price on your price list includes 9% VAT for baked goods.
Adjusting prices by channel
Since your costs differ, consider charging accordingly:
- Shop price: €75.00 (margin 19.8%)
- Order price: €82.50 (margin 21.2%)
Most bakeries add €5-10 for orders due to additional service and customization work.
Weekly performance tracking
From tracking this across dozens of restaurants, weekly analysis reveals the most telling patterns. Review your channel performance each week:
- How many cakes sold via shop vs. order?
- Which channel delivers more margin?
- Where is your waste?
💡 Example analysis:
Week 12:
- Shop: 15 cakes × €13.61 margin = €204.15
- Order: 8 cakes × €10.81 margin = €86.48
Shop generates more, despite lower margin per unit.
A food cost calculator automatically tracks these figures per sales channel, so you quickly identify which cakes and channels generate the most profit.
How do you calculate the margin per sales channel? (step by step)
Calculate your base cost price
Add up all ingredients, labor time, and overhead. This is your cost price before you account for the sales channel. Note this amount as your starting point.
Add channel-specific costs
For shop sales: add display costs and waste risk. For orders: add packaging, administration, and extra decoration. This gives you the total cost price per channel.
Calculate margin per channel
Use the formula: (Sales Price excl. VAT - Cost Price) ÷ Sales Price excl. VAT × 100. Compare the margins and consider different prices if costs differ significantly.
✨ Pro tip
Time yourself for 3 days on order fulfillment versus shop cake prep. Most bakers underestimate custom work by 25-30 minutes per order, killing their actual margins.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I charge different prices for shop and order?
You don't have to, but it makes financial sense. If orders cost you €5-10 more due to packaging and custom work, you can pass that on. Most customers accept this for the extra service.
How do I calculate waste risk for shop sales?
Look at your average waste over a month. If you throw away 10% of your cakes, add 10% of your cost price to each cake you do sell.
Which channel is usually more profitable?
That varies per bakery. Shop sales often have higher margin per unit, but orders can deliver more volume. Measure both channels for a month and compare total profit.
Should I include VAT in my margin calculation?
No, always calculate with prices excluding VAT. You'll remit the VAT to the tax authority, so you don't include it in your margin.
How often should I check my margins?
Check weekly which channel performs best and review monthly whether your cost prices are still accurate. Ingredient prices can change.
What if my order margins are consistently lower than shop sales?
Consider raising your order prices by 10-15% or streamline your custom decoration process. Many bakeries undercharge for the personalized service they provide.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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