I have not done baby quilts, but I made quilts for friends by having them select from pictures of quilts I had made. I gave each about 8 patterns I was comfortable making (I had only been quilting a year at the time). Once they selected the pattern, I did fabric selection three ways. With friends who live here in town, I went shopping with them. I gave each a picture of the quilt pattern they had selected, with arrows pointing to how much fabric each part needed....sort of a recipe for a quilt. They bought the fabric. With another friend, I did the same thing, but she lives four hours away. She bought the fabric she wanted and mailed it to me. Then with another friend, she selected the pattern but wanted me to buy the fabric here. (She lives all the way across country.) She told me she wanted 8 shades of green. I emailed her pictures of fabric in my stash, but the greens weren't right, so I took pictures at Hobby Lobby of fabric and emailed those. She easily knew which fabrics she preferred.
This way each friend got what she wanted and were involved in the process. Everyone was happy. Now, I admit, I did not charge any of these friends for making their quilts, so I can't help you with pricing...but then you didn't ask that.
By buying the fabric, my friends did realize that quilting is not a cheap thing.
Hope this helps some...
Dina