Are Dog Bakeries and Treat Businesses Profitable?

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 dog treat bakery.

How Much Do Homemade Dog Treats Sell For?

Homemade dog treats sell for 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 at $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 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.

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Pet Honesty, Ben And Camille Arneberg – <$1,000,000 annual revenue in less than 2 years

Starting 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 just making healthy treats for their animals. Their main product uses beef lungs. 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 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 dogs 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 separate skill sets. They wanted to control the direction of the recipes and products and to keep in touch with customer needs and desires.

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When they started they just used their website. They took simple photos with their iPhones and did all their product descriptions themselves. They found other companies were a bit lazy with 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 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.

Pet Bakery Business Basics

Thinking of starting a pet bakery? Are they profitable? Do you need a license? In this section, we’ll cover all these questions. Plus we’ll show you all the steps to start your pet bakery business.

Disclaimer: This article is for educational purposes only. We are not lawyers or CPAs nor do we pretend to be. Seek appropriate legal or tax advice for your specific situation.

Pet Bakery Pros and Cons

Pet Bakery Pros

  • Low Startup Costs
  • Can be run as a home-based business
  • Commercial kitchen NOT usually needed (check your city and state)
  • Baking supplies are easily available
  • FDA Recipe Approval NOT needed
  • Tax Benefits
  • Ability to Sell Online and Grow Quickly
  • Ability to sell at local farmers’ markets
  • Ability to sell through distributors to local pet stores

Pet Bakery Cons

  • More competition with online selling
  • Specialty pet treats are not in demand in all areas
  • Online marketing takes money and practice
  • More regulations than other dog businesses (e.g. dog walking, pooper scooper service, dog training). See our State by State list of licensing requirements.
  • Small home-based kitchens mean small production and limited growth

Check Your Competition

Pet bakeries can go two routes. You can sell online or you can sell locally. Many do both. In either case, you want to check your local competition.

Checking Your Local Competition

Google “gourmet pet treats near me” to see a google map of all the local bakeries near you. Read their reviews. What are they doing well? What are people complaining about? Take notes.

You’ll start to get an idea of how you can stand out from the competition. You’ll test that idea in one of the steps below. For now, you can get a lot of information about your competition just through Google Maps.

I recommend making a spreadsheet of all your local competitors. At a minimum add their name, address, website, and some notes about each one. Check all their websites. Are they ugly? Do they sell through their website? Do they ship fast? Do they sell on Amazon, Etsy, or eBay as well? By noting all these things in your spreadsheet you’ll get an idea of 2 things:

  • Is there a market for pet treats near me?
  • How much work will I have to do to compete with those that exist?

Knowing that now will save you a lot of heartaches later if you decide you didn’t want to work as hard as was required.

Checking Your Online Competition

Before checking your online competition we recommend checking your local competition first and starting a spreadsheet of notes. Then when you check to see if they sell on Amazon you can start looking at other sellers for the same treat categories.

Add those competitors to the spreadsheet. Use Jungle Scout’s free Amazon Sales Estimator Tool to find out how many they sell of each product. How many reviews do they have? Read the reviews just like you did above for local Google listings. What do the good reviews say? What’s working for your competitors? What do the bad reviews say? How can you stand out?

In either case – selling locally or online – you want to find out how you can stand out. Do this by checking your competitors and brainstorming ways to be better. Once you have a few ideas we move on to the next step – creating your first recipe and testing it with a small market.

Create Your Recipe

After you’ve completed your competitor research you should have at least 10 – 20 ideas of ways to stand out and be better. Now create one recipe based on one of these ideas. This section won’t be long. You can google similar recipes and make something of your own based on those. Be sure to use FDA-approved ingredients which we’ve covered more fully in this article.

Testing Your Recipe

Next, you’ll want to test your batch and test it fast. Make 10 batches. Use gift wrap boxes or some kind of easy but decent-looking packaging.

Don’t design a logo. Don’t do any graphic design. Just make them look reasonably good with party store packaging and add your business card.

Keep the branding basic but keep it there. Super simple.

Skip to the section below on choosing a business name. We cover how to check if it’s available and make sure you don’t get sued for trademark infringement. We’re not lawyers so seek your council!

Then…sell them. Don’t give them away to friends or family and ask for feedback. Sell them. Start high then go low. Sell them to your friends and family and wait. Do they ask for more? No? Your recipe sucks or something is missing.

Follow up after 2-3 weeks and see what they think.

This is the research, development, and testing phase. If you can’t make this work don’t bother with the rest. Nothing is worse than doing tons of work to set up an eCommerce site, paying for the graphic design, paying for a bunch of Facebook and google ads, and just hearing crickets.

Make great food first that people are willing to pay for. Then take it up a notch. Once you have a recipe that your friends or family ON THEIR OWN ask to buy more of, then make a larger batch. Say 50 units. Try and sell 50 units using one of the following:

  • Sign up for your local farmer’s market and sell there.
  • Too much paperwork to sell at your farmer’s market? Make friends with an existing vendor and see if they will do consignment. The goal is to get it quickly in front of people who aren’t your friends and family.
  • Drive to local pet supply stores and do the same thing – try and sell through consignment. Or just give them to the store for $1 each and ask them to sell them for $20 (or whatever your gourmet price is).
  • Try to sell through your local vets, dog groomers, or dog training businesses in your area.

DO NOT make an eCommerce store, Amazon store, eBay store, Etsy store, or anything like that. That step comes later.

Make It Better

Keep iterating till you have a recipe that can easily sell in large batches through some local avenue. See examples above (e.g. farmer’s market, local pet stores, local dog trainers, etc.) Once you have that it’s time to build your brand.

Packaging and Labeling

Next up is to hire a designer and do a little work to make better-branded packaging. Of course, be sure to follow FDA requirements for your packaging. Use VISTA print or possibly a specific dog bakery supplier to make your packaging.

Pricing

Continue to experiment with pricing till you find the sweet spot. This is hard to do locally in the beginning. You’re nervous about making sales so you keep your prices low. Or you think you’re products are the best so you keep your prices too high. Plus moving things locally is slow and feedback is slower. It’s much easier to get this kind of information and run pricing tests when you sell online through your store or via an Amazon storefront.

Pet Bakery Supplies

We cover pet bakery supplies in depth in another article. You already know the basic bakery supplies you’ll need but do you know where to get higher production professional units cheaply? We cover that plus packaging, FDA requirements, and all the other supply-side information you need to know in that article.

Naming Your Business

We cover naming your business fully in this article. Plus we offer a business name generator tool that we use to help us come up with ideas.

Register Your Business

At the minimum, you’ll need to register your business with your state and possibly with your city. In addition, you may need to register each product or at least your kitchen with your state. For regulations state by state see our article here.

How To Handle Sales Tax

You’ll need to worry about sales tax if you sell either locally or online. The best place to figure out what to do about sales tax if you sell online is to learn from the specialists at Taxjar.com. They have tools you can add to your eCommerce site or your Amazon store to help you collect and pay sales tax. You’ll still need to get a sales tax license for each area you sell in. It’s one of the huge drawbacks of selling online.

Setting Up a Website

Before setting up a website consider a few things. First, you don’t need a website to have a successful local pet bakery. There’s a ton you can do through local businesses and farmer’s markets with just business cards and some basic branding. Setting up a website will require some tech skills and learning. Watch this video on building a pet business website and go down the rabbit hole a bit and watch some suggested videos after it.

Take it from us, it’s a lot of work to build and run a successful website. If you just have it for branding and as an online business card it’s not that bad. If you plan to add a shopping cart and sell through your website expect a learning curve. If you want to go that route we suggest you check in with how much technical learning you want to do. If you love tech stuff we recommend setting up your eCommerce site using a popular, free, open-source tool called OpenCart. If the tech aspects scare you then you can use a simpler tool via Shopify. Keep in mind you’ll pay a bit more and you’ll still have a lot of tech learning to do. With either e-commerce website option, we recommend you get good training on running your online store.

FAQ

What Regulations Are Involved?

Check to see if your city or county requires you to register for a manufacturing license and open a commercial kitchen if you plan on selling dog treats. You may have to request a formal health inspection and prove that your treats are being made in a facility that meets or exceeds cleanliness guidelines.

Dog treat vendors are required to have a business license in every state. You’ll need to file a request for certain documents and potentially pay a processing fee before you’re able to open your business.

The FDA monitors claims placed on pet food labels, so you’ll need to check these regulations before your state any benefit from using your new company’s product. These guidelines are updated regularly, so you’ll want to monitor them for any future changes.

A non-profit trade association known as the Association of American Food Control Officials has provided a map that can help new business owners check what kind of regulations their states have on the books.

What About Packaging and Labeling Requirements?

Buy packaging materials in bulk if at all possible, to reduce costs. You can design simple labels with a standard piece of graphics software and print them out yourself.

Ink tends to be the most expensive consumable when it comes to printing out labels. Try designing something creative that doesn’t use a large amount of color ink so you can keep labeling costs reasonable without sacrificing too much in terms of image.

While dog treats don’t have to be FDA certified, the agency does keep a list of things you can’t claim without proof. Keep your labels simple and only use words like organic if your treats truly are.

FDA rules require the following on the label:

  • A clear explanation of the product
  • Amount inside
  • Name and address of the place making them
  • An ingredients list ordered by quantity

How Do I Handle Sales Tax?

You need to establish a presence in every tax locality that could potentially purchase from you. Try using a tool like TaxJar or Amazon’s built-in tools to help you figure out how much sales tax you’ve collected and to who it has to be paid.

Some localities won’t require you to collect taxes while others will make you report specific fees. Certain states, like Florida and Wisconsin, may not collect any form of sales tax on items they consider to be food.

County and local taxes might play into the equation, especially if you ever plan on selling in person at shows or craft fairs. Working with a tax professional is probably your best bet because sales taxes can get complicated.

Are Pet Bakeries Profitable?

Absolutely. Pet bakeries can be super profitable. We cover this topic in depth in another article but we can summarize it here as well. If you start small as a home-based business you can keep your costs of production low. If you target local markets and test recipes to perfection to ensure demand you can grow slowly and steadily.

If you keep your gross profit margin (Total Revenue minus Cost of Goods Sold) over 66% you can be sure you should take home a tidy 30% profit after staff costs, taxes, and marketing. So what does a 30% return look like? For every $20 bag of mixed gourmet treats, you keep $6. Say you can fit about 80 treats in your oven and bake them in 20 minutes.

Let’s say that the same batch takes about 10 minutes to mix and prep the batch then 20 minutes to add icing. That’s 40 minutes per 80 treats. 80 treats make 4 mixed bags. At $6 each that’s $24 per 40 minutes or $36 per hour. $36 per hour is about $72,000 per year using the standard 52-week year with a 2-week vacation.

Note this doesn’t include time spent at a farmer’s market or time spent shipping through your Etsy store or other marketing means. Plus you may be able to bake more or less than this depending on the size of your kitchen.

And clearly, you’ll be baking far more than one batch of 80 treats a day during production. This just gives you an idea of roughly how profitable a home-based pet bakery business can be.

Do You Need a License to Sell Pet Treats?

You need a business license to sell pet treats in your state, a Federal EIN for tax purposes, and to follow FDA regulations regarding labeling and food ingredients. You’ll need to check your state and local regulations for other licenses. We have a full article on each state’s licensing requirements.

Should I Sell Online or In a Local Store?

That depends on your risk tolerance and what you want to get out of this. Selling online goes well with home-based businesses but you’ll have greater competition. Anyone can sell their gourmet pet treats online through Amazon, eBay, or Etsy.

Plus setting up your online store will take some technical training. Still, for introverts who want to learn online marketing, selling online can be a path to super-fast growth. Just check out our full article on dog treat businesses for examples of online treat bakeries that make over seven figures.

Why Start a Pet Bakery Business

How to Start A Pet Bakery Business

How Much Money Can I Make Selling Dog Treats?

According to Mint Notion, some dog treat sellers can earn more than $1000 each week. There are many different ways in which you can sell dog treats to make a profit. If you find a way to use each option available to you, you have a better chance of increasing your profits. Making dog treats is rewarding because you know what ingredients you are feeding your dog. It becomes even more rewarding when you realize people are willing to pay money for those treats you are making. On this page, we’re going to discuss how much money you could make selling dog treats and everything else you wanted to know. 

How Much Can You Earn Selling Homemade Dog Treats?

Every dog treat seller is bound to have a different experience selling dog treats. How much money you make will depend on how many customers you have and how you are selling them.  Sellers who have looked into finding more ways to get their product out there, such as farmer’s markets and craft fairs, have had more success with profits. There is potential to earn over $1,000 weekly selling homemade dog treats.

Is There a Demand for Homemade Dog Treats?

If you live in an area where there are a lot of dog owners you may see a demand for dog treats, especially when you meet the right customers. The demand for dog treats will all depend on where you live, as some areas have a high demand and others have very few customers. One of the reasons independent dog treat suppliers are seeing a growth in business is because more pet owners are taking interest in what ingredients are in their dog’s food. For this reason, they are more likely to purchase treats from a business that makes homemade treats.

How Much Should I Charge For Homemade Dog Treats?

According to The Family Pickers, most homemade dog treats sell for an average price range of $15 to $20. However, you should make your prices according to what you spend to make them and how much you want to earn. To figure out an appropriate price range, always consider what you spent on ingredients, packaging, and other fees associated with making the treats. Most sellers will add a 30 percent profit margin to this amount when figuring out how much to charge for the treats. 

Is Making Dog Treats a Profitable Business?

If you approach your business strategy the right way, you could find making dog treats to be a profitable business. To do this, you should use all accessible resources to sell your dog treats and gain more customers.  This means using online and in-person resources to get your treats noticed and sold. Once you have a steady and growing customer base, the profits can be very enticing. 

Can You Sell Dog Treats Online?

You can legally sell dog treats online, but there are rules you need to follow. To begin with, you will need to have a business license or permit to sell dog treats in the state you live in. On top of that, you will also need to have a license to sell dog treats in each state that you sell to online. This may prevent you from selling to every state in the US.

What is the Most Affordable Way To Package Dog Treats For Sale?

One of the most affordable, practical, and attractive ways to package your dog treats for sale is to use paper bags. You will be able to neatly package all items to hand out to customers. When you use a paper bag, it’s also easier to write down your business details or place a sticker on them. This way, if your customers’ dogs are happy with the treats, they will know how to contact you to order more. 

Are You Allowed To Sell Dog Treats on Etsy?

It is possible to sell dog treats on Etsy, but you will need to have a licensed kitchen. Many states prohibit users from selling dog treats online that have not been made in a licensed kitchen. Etsy is a great site to use for selling homemade dog treats because the customer base is specifically looking for handmade items. 

Is Social Media a Good Place to Sell Dog Treats?

The great thing about social media is you can use the right searches to find pages and groups that your potential customer base is already following. This is an excellent place to get the word out about what you are selling and let dog owners know why they should consider your treats. Specifically, look for groups on Facebook for dog lovers that are in your area or where you sell. You should also create social media pages for your business to keep your customers in the loop about what the company is doing.

Does It Cost A Lot To Start a Dog Treat Business?

The start-up costs for a dog treat business are relatively low and you may even be able to begin right from your own home. One of the good things about dog treats is that sellers can connect with the majority of their customer base online, so there is no need to rent an expensive space for selling. The price of a business license will vary depending on what state you are in. Some states will allow you to have one for free, while other states could charge a fee, which could be as high as $5,000.

Do You Have To Register Your Business To Sell Dog Treats?

To legally sell dog treats, you will need to register your business. This is a very important step when getting your business started.  You should also make note of which state you would like to sell to online, and seek out the steps to register your business in those states as well. This will allow you to market your product to more customers.