How to Start a Class B Cottage Food Business in South Carolina

Most cottage food producers in South Carolina start with Class A permits, limiting them to direct sales at farmers markets and craft fairs. But if you're ready to scale up and sell to restaurants, grocery stores, or online customers across the state, South Carolina's Class B cottage food registration opens significantly more doors.

Unlike many states that cap cottage food sales at $30,000 or $50,000 annually, South Carolina places no dollar limit on Class B operations. This makes it one of the most business-friendly cottage food states in the country—if you know how to navigate the requirements.

Who This Guide Is For

This step-by-step guide is designed for South Carolina residents who want to:

• Sell cottage foods wholesale to restaurants, cafes, or retail stores
• Expand beyond farmers markets into online sales
• Operate a more substantial home-based food business
• Understand the legal requirements before investing time and money

You'll learn exactly what paperwork to file, which foods you can make, where you can sell, and how to stay compliant with state regulations.

Understanding Class B vs Class A Permits

South Carolina offers two cottage food pathways, and the differences matter for your business model:

Class A allows direct-to-consumer sales only—farmers markets, craft fairs, roadside stands, and your home. No wholesale allowed.

Class B includes everything Class A allows, plus wholesale sales to retail establishments and restaurants within South Carolina, plus online sales with intrastate shipping.

The registration process is identical for both classes. The key difference is operational: Class B gives you permission to sell wholesale, but you'll need to meet additional requirements when you actually start those wholesale relationships.

Step 1: Verify Your Eligible Foods

Not all homemade foods qualify for cottage food status. South Carolina allows a generous list, but the restrictions exist for food safety reasons.

Allowed foods include:

• Baked goods (breads, cookies, cakes, pies, pastries)
• Candies and confections (fudge, brittle, chocolate-dipped items)
• Jams, jellies, and preserves (high-acid fruits only)
• Dried fruits and vegetables
• Granola, trail mix, and similar dry goods
• Popcorn and roasted nuts
• Honey (if you're the beekeeper)

Prohibited items:

• Fresh fruits and vegetables
• Meat or poultry products
• Dairy-based items (cheesecakes, cream pies, fresh cream frostings)
• Canned vegetables or low-acid foods
• Beverages other than honey-based drinks
• Items requiring refrigeration for safety

When in doubt, contact the South Carolina Department of Agriculture at 803-737-9690. They're surprisingly helpful and would rather clarify upfront than deal with compliance issues later.

Step 2: Complete the Registration Application

South Carolina requires registration, not a license—meaning less paperwork and faster approval than many states.

Required information:

• Your legal name and home address (this becomes your business address)
• List of products you plan to make and sell
• Estimated annual gross sales
• Signature acknowledging you've read cottage food regulations

Application fee: $150, payable by check or money order to "South Carolina Department of Agriculture"

Processing time: Typically 2-3 weeks, though it can stretch to 30 days during busy seasons

Download the application at scda.sc.gov or call 803-737-9690 to request a mailed copy. Hand-delivering to the Columbia office can speed processing if you're nearby.

Step 3: Set Up Your Home Kitchen

Your existing home kitchen likely already meets most requirements, but you'll need to verify a few specifics:

Kitchen requirements:

• Located in your primary residence (no separate buildings)
• Standard residential appliances (no commercial equipment required)
• Adequate refrigeration for ingredients
• Clean, sanitary workspace separate from family cooking areas during production

No inspection required for Class B registration, unlike some states. However, if you start selling wholesale, individual buyers may request to see your setup or require third-party food safety certifications.

Storage considerations: You'll need space for ingredient storage, finished product storage, and packaging supplies. Many successful cottage food producers convert a basement room, spare bedroom, or garage space into dedicated storage.

Step 4: Plan Your Sales Channels

Class B registration allows multiple sales avenues, each with different practical requirements:

Direct sales (farmers markets, craft fairs, your home):

• No additional permits needed beyond cottage food registration
• Cash, check, or mobile payment systems work fine
• Bring plenty of business cards and product information

Online sales within South Carolina:

• Build a website or use platforms like Facebook, Instagram, or Etsy
• Clearly state "South Carolina delivery only"
• Factor shipping costs into pricing—perishable baked goods often require expedited shipping
• Consider pickup options to reduce shipping complexity

Wholesale to restaurants and stores:

• Start with smaller, independent establishments—they're more flexible than chains
• Prepare professional product sheets with ingredients, pricing, and availability
• Many wholesale buyers expect 30-day payment terms and consistent supply
• Consider liability insurance even though it's not legally required

Step 5: Handle Labeling and Record-Keeping

Proper labeling protects both you and your customers, and South Carolina has specific requirements.

Required label information:

• Product name
• Your name and home address
• Ingredient list in descending order by weight
• Statement: "Made in a home kitchen that is not subject to routine government food safety inspections"
• Net weight or count
• Allergen warnings (contains nuts, wheat, eggs, etc.)

Record-keeping requirements:

• Gross sales records (no dollar limit, but you still need to track)
• Ingredient sources and suppliers
• Production logs with dates and quantities
• Customer contact information for wholesale accounts

Keep records for at least three years. Simple spreadsheets work fine, but consider food business software like QuickBooks or FreshBooks as you scale.

Step 6: Price Your Products Strategically

Cottage food businesses often underprice their products, especially when moving into wholesale. Your pricing needs to cover ingredients, labor, overhead, and profit—while remaining competitive.

Cost calculation framework:

• Calculate ingredient cost per unit
• Add packaging and labeling costs
• Factor in your time at a reasonable hourly rate ($15-25 is typical for skilled food production)
• Include overhead: utilities, equipment depreciation, registration fees
• Add profit margin (20-40% is reasonable for cottage food)

Wholesale vs retail pricing:

Wholesale typically runs 40-60% of retail price. If your chocolate chip cookies retail for $12 per dozen, expect wholesale buyers to pay $5-7 per dozen.

Understanding Your Limitations

Class B registration is generous, but you still operate under cottage food restrictions:

Geographic limits: Sales only within South Carolina. You cannot ship to other states or sell to out-of-state wholesale buyers.

Venue restrictions: No sales at temporary events outside South Carolina, even if you're a South Carolina resident.

Production limits: Only in your registered home kitchen. You cannot use commercial kitchens, churches, or community centers, even temporarily.

Employee restrictions: Only household members can help with production. You cannot hire non-family employees.

Next Steps: Growing Your Cottage Food Business

South Carolina's unlimited sales cap means you can build a substantial cottage food business before needing to transition to commercial food production. Many successful operators generate $75,000-150,000 annually within cottage food rules.

Ready to get started? Koti connects cottage food producers with local customers who want fresh, homemade products. Our platform handles online ordering, payment processing, and customer communication, letting you focus on what you do best—creating delicious food.

Whether you're just starting your Class B registration or ready to expand your existing cottage food business, explore how Koti can help you reach more customers at koti.market/sell.

The cottage food opportunity in South Carolina is substantial. With proper registration, smart planning, and the right sales channels, your home kitchen can become the foundation of a thriving food business.