Profit Talk: The Real Price of Popcorn
Recently, a customer called into our Seattle office requesting a breakdown
of the profit margins of popcorn sales. They were considering getting into
the popcorn selling business, and wanted to get an idea of how much popcorn
they would need to sell in order to pay for the machine they were
considering. Then, once the machine is paid off, how much profit they could
expect per bag.
Because there are so many variables involved (size of the serving, retail
price, machine choice, etc.) it is difficult to find a universal answer.
So, we provided our customer with a customized answer, based on the
parameters they supplied to us. After crunching the numbers, we were able
to supply them with a basic framework as to what kind of profits they could
expect. The answer was enlightening, and we are offering that same
breakdown here, so all of our customers can see what a profitable retail
product popcorn can be. Though, please keep in mind the below numbers are a
guide only. Depending on your personal variables, these numbers will change
somewhat. But, you will see the structure of how this sort of estimate is
done, so you can do it yourself. There is math involved. Hold onto your
hats.
Let's assume you are purchasing an 8 oz. Theater Pop machine without a cart.
And, you are also purchasing cases of 8 oz. Tri-Packs for your popcorn. Each
cooked kettle will produce eight 1 oz. servings of popcorn, which you will
serve in a 1 oz. bag. And, let's assume you are selling these servings at
$1 a bag. Here is your breakdown:
Machine Cost: $554
Cost per case of Tri-Pack portion packs (24/cs): $35
Case of bags (1000/cs): $39
This means the raw supplies (portion packs and bags) will eat up $0.22 for
each bag you sell, giving you a $0.78 profit per 1 oz. bag sold. If you
were to devote all of this profit to paying off the machine, you would need
to sell 711 one ounce servings of popcorn to pay off the machine. Which,
sounds like a lot until you realize that that is less than one case of bags!
To put that in perspective, many of our customers who sell popcorn order a
new case of bags, or more, every month! Yes, people love popcorn, and you will love the profit! Now, get out there and make some money!
