What “Direct to Consumer” Actually Means

Most cottage food laws allow sales “direct to consumer.” Here is what that means in practice — and what it does not include.

What Is Usually Allowed

• Home pickup / delivery: A customer orders from you and picks up directly from your home, or you deliver to them personally. This is direct to consumer in its clearest form.
• Farmers markets: You set up a table, the consumer buys from you in person. Direct-to-consumer. Most states explicitly include farmers markets in their cottage food law.
• Pop-up events and local food fairs: Same principle as farmers markets. Check your state for any event-specific requirements.
• Online orders with local pickup: Many states allow customers to place orders online if they pick up in person from you. This counts as direct-to-consumer.

What Is Often Not Allowed

• Wholesale to restaurants or stores: Selling to a business that then resells to customers is wholesale — not direct-to-consumer. Wholesale typically requires a licensed commercial kitchen and a separate food processing facility license.
• Consignment in shops: Same issue as wholesale. The shop is the reseller, not the consumer.
• Shipping within your state: Some states allow it, many don’t. Check your state specifically — this varies significantly.
• Shipping across state lines: Once you ship across state lines, federal jurisdiction applies. Very few cottage food laws cover this. If you want to ship nationally, you typically need a commercial kitchen.

Sales Tax and Online Orders

If your state allows online orders with local pickup and your state requires you to collect sales tax on baked goods, that tax obligation applies to online orders too. Keep this in mind as you set up your order system.

Platform-Specific Considerations

Some bakers use platforms like Goldbelly, Etsy, or their own website to take orders. Before selling on any platform, confirm:

• Whether your state’s cottage food law permits online sales
• Whether the platform allows cottage food businesses (some have their own restrictions)
• Whether you’re required to disclose that your products are made in a home kitchen on the platform