How to Set Your Concession Stand Prices
One of the questions that often mystify those who are first starting out a concession stand, as well as those already in the business, is pricing. It can be difficult to know what prices are fair and what prices will ensure that you make money in the early days of running a stand. With the following tips, you can get a better idea of what you should consider when you are trying to find the perfect pricing.
There is No Single Answer
First, you have to realize there is no easy answer on pricing. Different types of food and different locations around the country will demand certain prices. If you sell high-end pork sandwiches, your costs will be higher than if you just sell hot dogs. You need to charge accordingly. Don’t worry; it’s not as hard as you might think, as you will see.
Give Your Customers Value, but Make a Profit
A good rule of thumb is to charge approximately two to four times what you paid for the product. This will give you a nice profit, but you will still be charging a fair price to your customers. If you can buy candy for fifty cents per bar, you can easily sell it for a dollar. With items that are a bit more complicated, such as sandwiches, hot dogs, and the like, you have to consider the total cost of the item – bun, condiments and toppings – and then double that to get a fair price. If you do not consider the cost of the incidentals, it will eat into your profits.
What is the Competition Charging?
Businesses of all types look at their competition to see what they are doing, and you will want to do the same. You do not want to charge more than your competitors unless you are confident that the quality of your products is good enough to warrant it. Even then, charging a high price can be enough to turn away many customers, sending them right to your competitor’s stand. Try to keep your prices in line with what the competition is charging to keep the playing field even.
Consider Value Combos
Another way to give more value to your customer, while making more money for yourself, is to create value combos, just as they do at fast food establishments. By offering customers the ability to buy items separately, or as a combo, you are giving them a choice and allowing them to save some money. For example, if you would normally sell a hot dog for $1.50, a soda for $1, and chips for $1, you could offer a combo special for $3 instead of the $3.50 it would normally cost the customer. You are still making a good profit and they get the feeling that they are saving money, which they are.
Make Sure the Pricing is Clear and Consistent
It is important to be clear and transparent about the prices, however high or low they might be. Make sure you display the prices clearly on the menu, and keep the pricing the same from one event to another. If you don’t, then word will get out about your price changes. You should not charge more simply because of the event location or the type of people attending.
Once you have been in the business a bit longer, pricing will become much easier. Even though consistency is important, you can change the prices if you find you are losing money on a product, or if you want to have a product move faster. Just be clear about those changes on the menu.