Funnel cake prices vary on the venue (place offered) and is also determined by your market or demographics. No one wants to leave money on the table but at the same time you don’t want to be overpriced and lose sales.
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PRICING YOUR FUNNEL CAKES
When pricing any food item there are several things you should take into account. Your funnel cake prices will be determined by the following:
- COGS – Cost Of Goods Sold
Let me explain each briefly and you’ll be a pro at pricing and know exactly when and where to raise prices without hurting sales volume.
DEMOGRAPHICS And Funnel Cake Prices
I once decided to offer Vienna all beef hot dogs. These hot dogs were considered “premium” and I was excited about offering something more expensive with more profit to my menu.
However, in my area, my neck of the woods – at the time… a $3.50 hot dog was out of the question.
The customers I served were used to going into the gas station and getting 2 for .99¢. I was already at $2.00 for one hot dog, which was doing great, but $3.50… I was going outside the demographics for my area.
Jason Brown is a good friend and fellow vendor. He is in a very small town but the median income is much higher. He can sell a $9.00 exotic hot dog without anyone blinking an eye. His demographics are far different than mine.
Demographics is based on the population and factors such as age, race, and sex.
Demographic data refers to socio-economic information expressed statistically, also including employment, education, income, marriage rates, birth and death rates and more factors.
If you live in the coal mining region of West Virginia, your demographics would require you to offer items at lower prices. But… if you live in Seattle, WA – your demographics would allow for much higher prices.
In the food industry, especially street food and catering, we all want to be about 3 times (3x) the costs. If my funnel cake costs for a medium sized are .50¢ then I’d want to be at least $1.50.
Fortunately, funnel cakes command more money and vendors are making 4 and 5 times their costs.
Cost of goods sold are the total of the costs to buy, produce, make and hand to a customer – any product.
VENUE And Funnel Cake Prices
Have you ever been to an event, fair or festival? Of course you have. One thing you can always expect.. are much higher prices. That bag of popcorn anywhere else would be $2.00 but at the movie theatre, it’s $8.00.
Depending on how captive your audience is, (think movie theatre or fair grounds) the food is always much higher priced. Sometimes it’s a necessary evil though.
Many event organizers charge the vendors exorbitant fees and to offset those fees and maintain a profit, they must raise the prices of their foods.
In front of the local parts store – a funnel cake may cost a customer $5 but at a festival, it could be $10.
Prices can be controlled by the competition a bit and this is also considered the “market” which goes back to the demographics we discussed above.
Don’t let your competition determine your pricing by much (if any).
Let the other vendors compete. Make yourself stand out. Nothing wrong with being the highest price and highest value.
I was the highest priced hot dogs in the county but it didn’t hurt me any as I expanded in 12 months to over 20 hot dog carts.
Remember, you can be 1/2 the price of a competitor but now must do 2 times the sales to make what they make.
TIPS, TRICKS AND MORE INFO?
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