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Financials: Profit Margins

Drinks

80% to 90%.  Wonderful if you have the traffic. Low traffic locations can not survive on drink volume alone because the sales are only $1.50 to $3.50 per item.  You must have volume if you depend on drinks alone.  This is great stuff and stuff of fortunes.

Food

75% and volume sensitive.  Great margins, but you have to sell a lot of salads and sandwiches.  Also great stuff and the stuff of fortunes.  A good cafe will make your life easier.

Beans

By pound: 55%, by 1/2 pound 65%, by 1/4 pound 75%.

The toss up on beans is how small to go.  I always sold quarter pounds because the margins are good.  I would sell quarter pounds in the $3.99 range depending upon the flavor, origin and so on.  But the price per pound is $14 to $16 and your cost is in the $4 to $6 range depending upon the quality and volume you buy.  This is good business.

I have been in stores where the signs are up "1/2 Pound Minimum No Quarter Pounds".  I know they are in trouble.  Low volume, not worth taking their eyes off the good book they are reading behind the cash register that is broken.  Never say no.  Always do what your customer wants or needs.  And price it accordingly.

Giftware

Mugs and the like typically are "keystoned", meaning doubled.  We always used 2.2 as the basis of doubling (2.2 times the wholesale cost = retail selling price) because it accounted for the shipping and handling costs.






 
 
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