Thinking of starting a dog treat business? Wondering are dog bakeries profitable?
In this article we’ll cover what you can expect to make in your own dog treat bakery.
How Much Do Homemade Dog Treats Sell For?
Homemade dog treats sell between $6 and $25 dollars.
Local prices depend on your city. You can also sell through Etsy or Amazon.
Typical Etsy prices range from $6 to $18 plus shipping. You can see examples on Etsy here.
Etsy charges $0.20 per product listed and 5% per sale plus credit card fees. Credit card fees are usually 3% plus $0.25 per transaction. Shipping costs will be on you and will depend on the weight of your packages and where you ship to.
Amazon charges an average of 13% per sale. You can also store your treats at one of their warehouses and have them handle customer service and shipping, usually for a few dollars per sale.
With Amazon expect to compete with other larger manufacturers. However, it’s still worth it when starting to look at Etsy or Amazon as options. Both will increase your brand awareness and revenue.
Dog Bakery Profit Margin
In general you should aim to make 30% profit margins per bag sold. If you were selling a bag of treats for $10 you’d want it to break down as follows:
- Ingredients – $3
- Etsy Fees ~ 8% = $1 rounded up
- Shipping – $3
- Profit = $10 – $3 ingredients – $3 shipping – $1 Etsy fees = $3
- $3/$10 = 30% profit margins
That’s just an example. For low priced items Etsy fees are lower and it’s better to sell there. Amazon fees are higher at an average of 13% per sale (plus shipping). You’ll do better selling your treats in bundles that are priced $30 or higher.
Keep in mind that this is just the profit margin excluding your time and building costs. As you grow your bakery and hire staff (if you choose that) your profit margin will lower. Conversely, you’ll get more time.
It all depends on what your goals are for your dog bakery business. If you enjoy the baking you could keep it small and local, skip Etsy and Amazon, and just sell via word of mouth referrals.
Stories Of Successful Dog Bakery Owners
Let’s highlight a few successful dog bakery owners out there to give you a feel for how much you could expect to make running a dog treat business.
Pet Honesty, Ben And Camille Arneberge – <$1,000,000 annual revenue in less than 2 years
Started in Austin, TX in the fall of 2018, Ben and Camille were looking for healthy dog treats and couldn’t find any. So they set out to create their own.
They launched the brand, Pet Honesty, with seven products. The products focused on specific dog ailments. For example they sell an Advanced Hip and Joint snack that runs $40 for 90 pieces.
Pet Honesty will likely make over $1,000,000 in revenue within their first year or two according to the couple.
Keep in mind that both of them have a lot of ecommerce experience. They have grown 2 other Amazon or ecommerce stores to over $1,000,000 annual revenue already.
Their other stores were for high end kitchen products and a second business for stand up desks, which they sold recently for seven figures.
Don’t let this scare you though. Just know that you can go big if you want to.
Treats Happen, Lucas Walker and Riley Wallbank, $15,000 per month revenue
Lucas Walker and Riley Wallbank run Treats Happen, a local dog treat bakery and ecommerce store, from Toronto, Canada.
They started out just making healthy treats for their own animals. Their main product uses beef lung. The hallmark of their brand is natural ingredient dog treats.
They are on track to make $15,000 in revenue and want to expand.
How are they growing? By seeing themselves as a brand and not just an ecommerce store. Instead of just selling through their own website, TreatsHappen.com, they seek to sell through as many profitable channels as possible (e.g. Etsy, Amazon).
They used several means to differentiate themselves from other dog treats out there.
First they made their treats thinner and smaller. That made it harder to cook in bulk but it made the bag of treats last longer, which customers loved.
Second, they focused on social media marketing. Why? None of the other major dog treat brands were doing it.
Third, they eventually outsourced production to a professional manufacturer. Why not make everything themselves? They found that learning marketing and selling vs learning to manufacture in bulk were two totally separate skill sets.
They wanted to control the direction of the recipes and products and to keep in touch with customer needs and desires.
When they started they just used their own website. They took simple photos with their iphones and did all their own product descriptions themselves.
They found other companies were a bit lazy on the product descriptions. They spent a lot of time there as well as a lot of time on their about page. They wanted customers to really understand what their company offered and why it was different.
Lucas and Riley eventually started reaching out to brick and mortar stores through cold calling. It was a hustle but it worked much better to keep the feel of their brand as quality.
High quality, high cost products sell better in person. It was easier to do that through brick and mortar than through the website alone.
Their main channels to date are Shopify, Amazon, and distributors that send to brick and mortar. Of the three, the distributor channel has the lowest profit margin. The value there is brand awareness and selling in bulk.
So, Are Dog Bakeries Profitable?
Absolutely if done correctly. Based on the examples above you should be able to make decent profit margins selling dog treats locally or on Etsy or Amazon. There will be a learning curve to getting clients and setting everything up.
Based on the example bakeries shown above you can expect to grow your business to either a few thousand a month all they way up to seven figures a year in revenue. It just depends on how big you want to get.