How much deposit should you take on a custom order?

A baker posts a three-tier wedding cake for pickup Saturday. The client cancels Thursday afternoon. The cake is already stacked, filled, and decorated in a color scheme nobody else will want. The 20% deposit barely covered the butter and chocolate.

That sinking feeling is exactly what a well-set deposit prevents. The number you pick—whether it’s 30%, half, or full payment—shouldn’t come from a forum poll. It should come from one question: what do I lose if the buyer disappears after I start?

Why a one-size-fits-all deposit fails

Drop into any maker forum and you’ll quickly see “50% upfront” repeated like a rule of nature. Homegrown’s custom-food guide calls 50% the best approach for custom food, and CakeCentral discussions are full of bakers who say they take half down to hold a date. But a blanket percentage ignores what actually drives your risk: how much of your own money you’ve already spent on materials, and how much labor you’ve burned before the balance is due.

A 50% deposit that over-recovers cost feels safe. A 50% deposit on a job where you’ve already ordered expensive specialty stones and cast a wax model may still leave you underwater if the client walks. Your deposit needs to follow your exposure, not a convention.

The cost-exposure rule (and how to calculate it)

Every custom order has a point of no return—the moment your out-of-pocket expenses and committed time can’t be rescued by selling the item to someone else. I’d suggest setting your minimum deposit to cover everything that’s non-recoverable on the day you start work.

What counts as non-recoverable:

• Materials you can’t return or reuse. Custom-printed fabric, stones cut to a specific design, lumber milled to an unusual dimension, cake toppers with a name on them.
• Labor you can’t redirect. The hours spent carving a wax ring you can’t reuse, frosting that’s already piped, joinery that’s already cut.
• Hard costs you’ve already paid. Rental fees for a delivery van, specialty packaging ordered for that batch, rush shipping on a component.

You don’t need a forensic spreadsheet. For a $600 custom jewelry piece where the materials (stone, metal, findings) cost you $180 and arrive in a week, a 30% deposit might be fine—you’re out $180 if the order collapses before the bench work really begins. For a wedding cake that’s 100% perishable and can’t be resold the morning after, the deposit should recover all the ingredients and the hours of mixing and baking. That’s why many cake makers land on 50% or more for anything custom.

The formula isn’t a fixed percentage; it’s:

Minimum deposit = non-recoverable costs on the day you begin production

If you can resell the finished piece (a standard-size wooden cutting board with a monogram may have a backup buyer), the calculation changes. The deposit can be lower because your worst-case loss is smaller.

Deposit percentages that match your risk

Once you’ve figured out your cost floor, you can map that to a deposit structure that fits how you sell.

Items under $100 or things nobody else will buy. A Reddit CraftFairs thread and the cake forums agree on one workaround: for tiny orders or completely non-resellable work, many sellers don’t split the payment at all—they require full payment upfront. A custom cookie order with a child’s photo printed on it or a pet portrait ring dish can’t go on the shelf. If you’re not comfortable refunding it, collect 100% when the order is placed.

The 50% starting point for truly custom work. When materials represent a big slice of the total and the item is made to a specific person’s measurements or taste, a half-down structure is the most common setup I see, and it’s what apparel manufacturers and jewelers often use. The first half covers materials and a chunk of labor; the second half is due before delivery or pickup. One woodworker on Woodweb described it plainly: half for small jobs, a third for bigger ones.

Tiered deposits for large or multi-batch orders. If you’re making 200 favor boxes or a run of apparel that ships in three drops, breaking the deposit into two chunks makes more sense. You might collect 30% to lock in the production slot, then another 30% when the first batch is proofed, with the remainder on completion. This mirrors the repeat-buyer terms Alibaba’s seller guide mentions, where 30%/70% or 40%/60% splits are used for large orders.

Deposit sizing cheat sheet

• Truly non-resellable, low-ticket ($100 or less): 100% upfront
• Custom work with high material cost, no reuse: 50% non-refundable deposit
• Custom work where you can resell the item if canceled: 30%–40% deposit
• Large orders with multiple checkpoints: tiered deposits (e.g., 30% to start, 50% by mid-point, balance on delivery)

Get the deposit conversation right (with templates)

Your deposit policy lives in how you talk about it. A vague “deposit required” makes buyers nervous. Frame it as the thing that secures their spot and pays for the raw materials you’re buying just for them.

In your order confirmation or custom inquiry reply:

“To reserve your date and order your materials, I’ll send an invoice for a 50% deposit. This deposit is non-refundable because I start sourcing everything right away. The remaining 50% is due before pickup (or before shipping). Once I receive the deposit, your order moves into the production queue.”

When you send the balance reminder:

“Your [item name] is almost ready. Here’s the invoice for the remaining $[amount], due by [date]. I’ll send you pickup details as soon as it’s complete.”

If you allow partial cancellation before production starts:

“I can refund 50% of your deposit if you cancel more than [number] days before your production date. After that date, the full deposit is non-refundable because materials have been ordered.”

Questions for your accountant before you lock it in

I’m not an accountant, and deposit rules vary by state and business structure. Bring these questions to yours:

• Does my state consider a deposit taxable income when I receive it, or when the job is complete?
• When do I need to remit sales tax—on the deposit, on the full amount, or on the balance?
• Does labeling a deposit “non-refundable” change how I should hold or report it?
• Are there any consumer protection rules in my locality that limit how much I can keep if a buyer cancels?

A decision that starts with your costs

Forget the magic 50% you overheard at a market. Write down the materials you order per project, the labor you commit before the final payment, and the likelihood that someone else would buy the finished piece. Let that number set your deposit. When a cancellation still makes your stomach drop, your policy isn’t doing its job yet—adjust it upward until the fall is one you can absorb without losing sleep.