A combo makes you more money only if it brings in sales you would not otherwise get. Work out the contribution margin of the main item alone, the drink alone and the combo. Then count how many customers were already buying both separately: for them, the combo only lowers the price. The combo pays when the new drink buyers bring in more than the discount your regulars get. Add-ons are different and almost always help: they cost little, are charged on top and lower nobody's price.
First, the margin on each item
Before building a combo you need three numbers, each based on loaded cost (ingredients, packaging, gas, your time):
- Margin on the main alone: main price − main cost
- Margin on the drink alone: drink price − drink cost
- Margin on the combo: combo price − (main cost + drink cost)
The combo margin is always less than the two separate margins added together, because you cut the price. That is fine. What matters is who you cut it for. The guide to drinks, sides and extras shows where the margin usually sits in a restaurant; at a stall the logic is the same.
Everyone gets the discount
This is the most common mistake in the arithmetic. If 35 of your 120 customers already buy a soda with their hot dog, when you launch the combo those 35 will order it. They buy nothing new: they pay less for the same thing. That discount is a real cost. The guide to what a discount really costs you has the full calculation.
The combo only pays if it adds enough new customers who did not buy a drink before. The rule:
new buyers needed = (customers already buying both × discount) ÷ (combo margin − margin on the main alone)
Worked example: a hot dog stand
You run a hot dog stand at a weekend market. Your numbers:
| Item | Price | Loaded cost | Margin |
|---|---|---|---|
| Hot dog | $6.00 | $2.10 | $3.90 |
| Can of soda | $2.50 | $0.70 | $1.80 |
| Hot dog + soda combo | $7.50 | $2.80 | $4.70 |
Separately they would cost 6.00 + 2.50 = $8.50. The combo gives $1.00 off.
Before the combo. On a market day you sell 120 hot dogs, and 35 of those customers also buy a soda.
- Hot dogs: 120 × 3.90 = $468.00
- Sodas: 35 × 1.80 = $63.00
- Total: 468.00 + 63.00 = $531.00
With the combo. You sell the same 120 hot dogs. Now 60 customers take the combo: the 35 regulars and 25 new ones. The other 60 buy just the hot dog.
- Combos: 60 × 4.70 = $282.00
- Hot dogs alone: 60 × 3.90 = $234.00
- Total: 282.00 + 234.00 = $516.00
The difference: 516.00 − 531.00 = −$15.00. The combo loses you $15 a day. Check it the other way: the 35 regulars each leave you $1.00 less (−$35.00); the 25 new buyers each leave you 4.70 − 3.90 = $0.80 more (+$20.00). 20.00 − 35.00 = −$15.00.
New buyers needed to break even: (35 × 1.00) ÷ 0.80 = 43.75, so 44 new soda buyers a day. You got 25. Busy stand or not, this combo is a giveaway.
A version that works: add chips instead of a discount. Keep the combo at $8.50, the same as buying both separately, and include a bag of chips that costs you $0.60. Combo margin: 8.50 − 2.80 − 0.60 = $5.10.
- Regulars: they used to leave 3.90 + 1.80 = $5.70; now $5.10, so 35 × 0.60 = −$21.00
- New buyers, say the same 25: each leaves 5.10 − 3.90 = $1.20 more, so 25 × 1.20 = +$30.00
- Net: 30.00 − 21.00 = +$9.00 a day
Same stand, same customers, and the combo moves from −$15 to +$9 because the giveaway costs you $0.60 instead of $1.00.
Add-ons earn without a discount
An add-on is a different animal: the customer pays more for something on top, and nobody pays less.
Back at the stand: you offer chili or melted cheese for $1.00 extra. It costs you $0.30 from a pot already on the stand. Margin: 1.00 − 0.30 = $0.70 per add-on.
If 40 customers a day take one: 40 × 0.70 = $28.00. That beats both versions of the combo, without cutting anyone's price.
For an add-on to work at a stall:
- It comes from something already hot or ready. An add-on that needs another pan slows the line.
- Customers can see it. A pot of chili on the counter sells better than a sign.
- It has a round price. $1.00 is quick to take; $0.85 means hunting for coins.
Combos that do not give margin away
If you want to keep a combo, there are ways to make it cheaper for you:
- Add something cheap instead of discounting, as in the chips version above.
- Run the combo only in slow hours: if the stand is empty at 3pm, a combo then brings people in without handing a discount to the lunchtime crowd.
- Use a round price: a combo at $8.00 or $9.00 is paid with a note or a single tap and speeds up the line. The guide to pricing street food covers how to round without losing margin.
To check the margin on any combo or add-on quickly, use the markup and margin calculator. The street food and market stall guide has all of the stall's numbers in one place.
Do it with the calculator
In the food cost calculator, enter the recipe for the hot dog, the drink and each add-on to get their loaded costs; with those costs and your prices you get the margin on each combo and the number of new buyers it needs.
Frequently asked questions
Does a combo always increase sales?
Not necessarily. Many combo buyers were already buying the drink separately, and for them the combo is just a discount. It pays only if it brings in enough new drink buyers to cover that discount.
How big should the combo discount be?
As big as the new buyers you expect can pay for. Work out how many new buyers you need to cover the discount your regulars get; if that number looks hard to reach, make the discount smaller.
Which add-ons work best at a stall?
Ones that cost you little, are quick to serve and that customers can see are worth it: cheese or chili from a pot already on the stand, an extra sausage, a second sauce. Work out the margin of each one the way you would for a menu item.
Should I bundle chips into the combo instead of discounting?
It often costs you less. A cheap item you add has a real cost, but usually smaller than a cash discount, and the customer still sees more value. Run both through the numbers before choosing.