Introduction

Selling baked goods from home in Michigan is an achievable ecommerce business if you pair legal compliance with practical online sales tactics. Michigan allows many home bakers to sell non-perishable, non-time/temperature control for safety (non-TCS) items, but rules, labeling, taxes, and delivery options shape what you can sell and how you price it.

This article walks through the process entrepreneurs need to sell baked goods online: what the law typically permits, step-by-step setup for digital storefronts and marketplaces, product pricing and packaging, shipping and local delivery strategies, and a 90-day timeline to launch. You will get specific platform recommendations with price ranges, sample cost and pricing calculations, label and insurance checklists, and common mistakes to avoid. The goal is a practical blueprint you can follow this month to move from idea to first sales while keeping the business legal and profitable.

Selling Baked Goods From Home in Michigan - Overview

This section explains the regulatory baseline, product scope, and when to involve local authorities. It also gives a one-paragraph checklist you can use today.

Regulatory Baseline

Michigan allows home-based sale of many baked products under rules commonly known as cottage food or home food operation rules. Typically permitted products include cookies, brownies, quick breads, dry mixes, granola, and certain fruit pies that do not require refrigeration. Items that require time/temperature control for safety (TCS) such as cream pies, custards, cheesecakes, meat-filled pastries, and most cream-filled products are generally not allowed unless you use a licensed commercial kitchen.

Labeling and Disclosure

Labels in Michigan generally require:

Product name
Ingredient list with common allergens (milk, eggs, wheat, soy, tree nuts, peanuts)
Net weight or quantity
Business name and contact information
A disclosure stating the product was made in a home kitchen not inspected by the state (wording varies; check MDARD or county guidance)

Registration, Inspections, and Limits

Requirements may differ by county. Some counties require a simple registration with the county health department; others have no registration but actively enforce allergen and labeling rules. You should contact the Michigan Department of Agriculture and Rural Development (MDARD) and your county health department within 7 days of planning to sell to confirm current rules.

Quick Checklist to Start Compliance Today

Confirm permitted product list with MDARD or county health.
Design a label including product name, ingredients, allergens, weight, business contact, and home-kitchen disclosure.
Plan to sell only non-TCS items until you get a licensed commercial kitchen or retail permit.
Register for Michigan sales tax collection (6% state rate) with Michigan Treasury if selling taxable goods.

Principles for Selling Baked Goods Online

This section covers the business principles that determine profitability and customer satisfaction: product selection, shelf life management, pricing strategy, and customer experience. Each principle includes concrete numbers or examples.

Choose the Right Product Mix

Focus on products that survive 2-7 days at room temperature to enable shipping and local delivery.

Drop cookies and bars: shelf life 3-7 days, low breakage risk.
Loaves and quick breads: 3-5 days, ship in sturdy boxes.
Biscotti and dry cookies: 2+ weeks when vacuum-sealed.
Dry mixes in jars: 6-12 months, excellent for shipping and margins.

Example product launch: start with 6 SKUs

2 cookie flavors (classic chocolate chip, oatmeal raisin)
2 loaves (banana bread, lemon pound)
1 seasonal item (pumpkin spice muffin mix)
1 long-shelf item (oatmeal granola)

This keeps production simple and inventory manageable.

Pricing Fundamentals with Numbers

Calculate price per unit using this formula: Total cost per unit = (ingredients per unit) + (labor per unit) + (packaging per unit) + (allocated overhead per unit)

Example: chocolate chip cookie sold as single cookie vs dozen

Batch makes 24 cookies.

Ingredients per batch: $6.00 -> $0.25 per cookie
Labor: 1 hour to mix/bake/pack batch, labor rate $20/hr -> $0.83 per cookie
Packaging: $3.00 for 24 -> $0.13 per cookie
Overhead allocation (utilities, kitchen supplies): $2.40 -> $0.10 per cookie
Total cost per cookie = $1.31

If you sell by the dozen:

Cost per dozen = $1.31 * 12 = $15.72
Typical retail markup 2.0x to 2.5x -> Price = $32-$39 per dozen

Target margin: aim for gross margin 50-65% after direct costs, higher if you want to invest in local marketing and packaging.

Shelf Life and Shipping Constraints

For shipping beyond 24-48 hours, choose items with stable shelf life or use priority shipping.

Local delivery or pickup: same-day or next-day, handled via Shopify Local Delivery or Square Delivery.
Regional shipping (under 48 hours): use USPS Priority Mail (1-3 days) or UPS Ground for nearby states.
National shipping: limit to non-perishable items or offer insulated packaging with dry ice for premium products (check carrier rules).

Steps to Set Up Your Ecommerce Operation

This section provides a step-by-step implementation plan with timelines, platform choices, pricing examples, and a 90-day timetable to first sales.

Phase 0:

Validate and plan (Days 0-7)

Test 5-10 recipes at home and give samples to 20 people for feedback.
Track ingredient costs and yield precisely to compute per-unit costs.
Decide on business structure: sole proprietorship, LLC. An LLC filing in Michigan typically costs $50-$60 for initial state filing plus optional registered agent fees around $50-$150/year.

Phase 1:

Compliance and admin (Days 7-21)

Contact MDARD and county health to confirm allowed items and labeling requirements.
Obtain required permits or registration if needed; timelines vary by county but often under 2 weeks for paperwork.
Register for Michigan sales tax with Michigan Treasury; set up an EIN (Employer Identification Number) from the IRS for banking.

Phase 2:

Build selling channels (Days 14-45)

Choose platform(s) depending on audience and budget.

Marketplace plus website combo (recommended)

Etsy: low upfront cost for testing - $0.20 listing fee per item, 5% transaction fee, and payment processing typically around 3% + $0.25. Good for search visibility and craft-food buyers.
Shopify: full online store, ranges from $29/month (Basic) to $299/month (Advanced) depending on features. Use Shopify for subscriptions, local delivery, and better branding.
Square Online: free plan available; paid plans around $29/month for custom domain and more features. Good for farmers markets and local pickup.

Use a combination:

Launch core SKUs on Etsy and Shopify simultaneously. Use Etsy to acquire initial customers and Shopify to capture higher-margin repeat buyers and subscriptions.

Example costs to start:

Domain: $10-$15/year via Namecheap or Google Domains.
Shopify Basic: $29/month.
Shopify transaction fees: 2.9% + $0.30 per transaction unless you use Shopify Payments.
Etsy typical cost first month for 30 listings: $6 plus transaction fees on sales.
Label printing and packaging initial budget: $200-$400.
Insurance (general liability for food): $350-$600/year via companies like Next Insurance or Hiscox.

Phase 3:

Packaging, labeling, and logistics (Days 21-60)

Design label template and print 250-500 labels - cost $50-$150.
Packaging: kraft boxes, food-safe poly bags, heat-sealed bags for cookies; initial inventory $200-$500.
Local delivery: set up with Shopify Local Delivery or DoorDash Drive for local runs; estimate delivery cost per order $3-$10 depending on zone.
Shipping: negotiate rates via ShipStation, Pirate Ship, or directly with USPS; start with USPS Priority Mail for 1-3 day regional deliveries. Pirate Ship offers discounted USPS rates, often saving 10-20% on shipping labels.

Phase 4:

Launch and iterate (Days 60-90)

Launch with a soft opening: 50-100 orders targeted through email and social ads.
Track unit economics: cost per order, average order value, return rate.
Iterate product sizing, packaging, and copy based on customer feedback.
Enroll in local farmers markets (costs vary $15-$50 per market day) to increase brand awareness and reduce shipping.

Pricing Examples and Profitability Targets

Sample SKU pricing for online store (Michigan example)

Single cookie sold individually: Cost $1.31 -> Price $2.75 (margin ~52%)
Dozen chocolate chip: Cost $15.72 -> Price $35.00 (margin ~55%)
Banana bread loaf (cost $3.50 per loaf with packaging): Price $12.00-$16.00
Mason jar muffin mix (cost $2.00 jar): Price $9.00 (higher margin due to long shelf life)

Target economics per order

Average order value (AOV) target: $35-$50 to cover shipping discounts and ads.
Customer acquisition cost (CAC) target: under $8 for social ads on Facebook/Instagram for repeatable profit.
Shipping buffer: absorb $3-$8 with free local pickup, or charge actual shipping for national orders.

Best Practices for Ecommerce and Marketing

This section focuses on conversion tactics, repeat purchase strategies, and balancing marketplace vs direct sales with concrete examples.

High-Conversion Product Pages

Use 4-6 high-quality images per SKU, including package shot and close-up texture images. Hire a local photographer or use a phone tripod and natural light.
Include shelf-life and storage instructions clearly; e.g., “Keeps fresh 5 days at room temperature, freeze for up to 3 months.”
Provide serving suggestions, and a simple recipe card as a digital PDF to increase perceived value.

Promotions That Work for Food Ecommerce

Bundles: sell 3-cookie sampler for $8 or 12-cookie sampler for $28 to increase AOV.
Subscriptions: offer weekly or monthly cookie box at 10-15% discount using Shopify Subscriptions or ReCharge. Example: $30/month cookie box with a target CLV (customer lifetime value) $120 over 4 months.
First-order coupon: 10% off for email capture increases conversion and builds your list.

Local Discovery and Pickup

Enable local pickup and same-day delivery in Shopify and Square. Offer free pickup and $5 local delivery within 10 miles.
Sell at farmers markets and collect emails in person using Square or a QR code linking to your store.

Ask for an automatic review 7 days after delivery using apps like Judge.me (Shopify) or Etsy’s review prompts.
Incentivize reviews with a 10% coupon for the next order.

Tools and Resources

This section lists platforms, pricing approximations, and what each tool is best used for.

Ecommerce Platforms and Marketplaces

Shopify: $29/month Basic; 2.9% + $0.30 per transaction standard. Best for building brand, subscriptions, local delivery.
Etsy: $0.20 per listing, 5% transaction fee, payment processing ~3% + $0.25. Best for discovery and low upfront cost testing.
Square Online: free plan available, paid plans from $12-$29/month; integrated POS for markets. Best for in-person sales combined with a simple online store.
WooCommerce (WordPress): plugin is free, hosting $5-$30/month. Best if you want full control and lower monthly fees but more setup time.

Shipping and Fulfillment

USPS Priority Mail: 1-3 days regionally, often best cost/benefit for 1-3 day shipments.
Pirate Ship: free account, discounted USPS rates; good for startups.
ShipStation: multi-carrier label platform; plans from about $9-$29/month depending on labels and users.
UPS and FedEx: better for heavy or regional ground shipments; negotiate rates after volume increases.

Payments and Accounting

Stripe: 2.9% + $0.30 per transaction; integrates with many platforms.
PayPal: similar fees, consumer trust high.
QuickBooks Online: $15-$40/month for bookkeeping and simple inventory tracking.
Wave Accounting: free for basic accounting needs.

Labels, Packaging, and Supplies

Uline, Paper Mart, WebstaurantStore for food-safe packaging and boxes. Initial spend $200-$500.
Label printers: Dymo LabelWriter 450 for small runs ~$80, or thermal label printers like Rollo ~$200 with shipping label capability.

Insurance and Legal

General liability insurance for food businesses via Next Insurance or Hiscox: $350-$600/year typical.
Product liability add-on recommended once shipping or wholesale begins.
Consult an attorney for branding and terms of service; expect $200-$500 for a simple contract template.

Common Mistakes and How to Avoid Them

This section highlights 4 common pitfalls with concrete avoidance strategies.

Ignoring local and state rules

Many sellers assume cottage food rules are the same everywhere. Always confirm with MDARD and your county health department. Keep a copy of any registration and labeling guidance on file and review annually.

Underpricing products

Undervaluing labor and overhead is common. Track labor time per batch and use the pricing formula in this article. Do not price below cost; expect to raise prices after accounting for ads and returns.

Shipping perishable items without proper controls

Shipping cream-filled or refrigerated goods leads to spoilage claims. Limit national shipping to shelf-stable items or use expedited carriers and insulated packaging with gel packs if permitted. Clearly state expected delivery times at checkout.

Weak product photography and descriptions

Bad photos reduce conversion. Invest $150-$300 in a photographer or use a simple home setup: white foam board, natural window light, and a phone camera. Use consistent descriptions with storage and allergens up front.

FAQ

Do I Need a License to Sell Baked Goods From My Michigan Home?

You must confirm with the Michigan Department of Agriculture and Rural Development (MDARD) and your county health department. Many home bakers can sell non-TCS items under cottage food rules, but registration and labeling requirements vary by county.

Can I Ship My Baked Goods Across State Lines?

Shipping across state lines is allowed for shelf-stable items, but laws vary by destination state and carrier rules. Avoid shipping perishable or TCS items interstate without a licensed commercial kitchen and proper permits.

Do I Have to Collect Sales Tax on Delivered Baked Goods in Michigan?

Yes. Michigan has a state sales tax currently at 6%, and you must register to collect sales tax for taxable tangible goods. Use your ecommerce platform to collect and remit taxes, and consult Michigan Treasury for exact rules and local tax rates.

What Packaging Keeps Cookies Fresh During Shipping?

Use sealable food-grade bags or vacuum-seal for individual cookies, then place in a padded box. For 1-3 day shipping, add a small cardboard divider to prevent crushing and a desiccant packet for moisture control if needed.

How Much Should I Invest to Launch a Home Baking Ecommerce Store?

A minimal viable launch can cost $700-$1,500 covering website setup, labels, packaging, initial supplies, and a small ad budget. A more polished launch with professional photos and inventory may range $2,000-$5,000.

Is Product Liability Insurance Necessary for a Home Baker?

Yes. General liability and product liability insurance protect against claims from allergic reactions or foodborne illness. Expect $350-$600/year for basic coverage; add product liability as sales and shipping increase.

Next Steps

Confirm regulatory requirements: Call MDARD and your county health department this week and get written guidance on allowed products and labeling.
Calculate unit economics: Test one recipe, record ingredient and labor times for a single batch, and compute cost per unit using the pricing example in this article.
Set up your online presence: Create an Etsy shop and a basic Shopify store (trial for Shopify is typically available) and list your initial 4-6 SKUs with professional photos and clear labels.
Run a 30-day soft launch: Promote via Instagram and a $100 Facebook/Instagram ad test, sell to friends, farmers markets, and local pickup. Track acquisition cost, AOV, and customer feedback, then iterate product and pricing.

Checklist to Print and Use

Confirm MDARD and county health rules and retain written guidance.
Create label template and print 250 labels.
Register for Michigan sales tax and obtain EIN.
Purchase domain and choose primary ecommerce platform (Etsy + Shopify recommended).
Buy initial packaging and supplies ($200-$500).
Secure general liability insurance.
Plan soft launch promotions and local pickup logistics.

This guide gives you the legal framework, ecommerce choices, and practical steps to start selling baked goods from home in Michigan with clarity and measurable targets. Follow the 90-day timeline, keep strict cost tracking, and focus on shelf-stable SKUs for scalable shipping and healthy margins.