Baking and selling cookies for profit can be a fun, low-cost business, but it needs to be a legal one. In many states, "cottage foods" baked at home are less tightly regulated than food from commercial kitchens, but you must comply with rules, including rules for where and how you sell your cookies.
TL;DR (Too Long; Didn't Read)
The first step to selling cookies online is to find out if its legal in your state. It's always legal to advertise your business and take cookie orders over the internet, but in many states, you have to deliver the cookies in person or have your customers pick them up from you. Even states that allow mail order, such as Ohio, may only allow it in the state.
What Are Cottage Food Laws?
Cottage food laws exist to make it easier to run a home baking or cooking business. If you're selling cookies for profit from your home — or jams, breads, pies and other qualifying foods — you get a free pass on many of the regulations that apply to commercial kitchens. However, you have to comply with your state's cottage food regulations or any other rules that apply.
- You can only make and sell foods that are unlikely to spoil. Meat and fish are a no-go, for example, but cookies and other baked goods are considered safe.
- If you're mixing fresh fruit into your cookie dough, it has to be thoroughly baked along with the dough. Topping the cookie with fruit after baking won't fly.
- You have to bake the cookies at your home rather than in a rented kitchen space.
- You need a supply of clean water to wash surfaces, equipment and utensils.
- The local health department may inspect your kitchen, although the inspection won't be at the level a professional bakery undergoes.
- All your cookie packaging must be labeled with your name and address, a list of ingredients, and a statement that your cookies are cottage food and not subject to food-safety inspection.
Your local health department can explain the rules for where you live. You also must meet any other local requirements, such as taking out a business or home-business license. If your state doesn't have a cottage food law, it probably regulates the sale of home-baked goods by other laws. Talk to local officials about the regulations you have to deal with.
Selling Cookies for Profit
Part of the cottage-food concept is that you're a small home business, not a massive cookie-creator like Keebler or Nabisco. Many states limit how much money you can make and still stay in the cottage foods category. $10,000 to $20,000 is a common limit, though it may be as little as $5,000.
States also set limits on where you can sell. Most states allow you to sell in person, but in others, you must sell through farmers markets or restaurants. Other states don't allow you to sell to restaurants, bakeries or other intermediaries.
Online sales — selling cookies on Etsy, for example — are a special case.
Can You Sell Online?
No matter where you live, marketing online is completely legal. You can set up a website to promote your business, ask food bloggers to review your cookies, and promote your business on social media. It's legal to take orders through your website or by email.
Making your kitchen the hub of a mail-order business may not be acceptable, however. Many states don't allow cottage food businesses to use mail order or to sell across state lines. You can take orders via the internet, but you have to close the deal in person.
If mail order is your preferred business model, find out whether your state allows it for cottage foods. If it's not acceptable, research alternative business models before going forward.
- Shop around for the best website hosting package. Always ship paid orders as soon as you can. Offer several shipping options for your customers. Offer promotions if possible--especially when you first open your online store.
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com