Every supply run has a cost that never shows up on the receipt: the fuel, parking or fares, and the hours you spend getting there, shopping and getting back. To find it, add your round-trip transport to your hours multiplied by your hourly rate, then divide by what you bought or by the units you will make from it. In a small business that number can be a large share of your ingredient spend, and it can turn the cheap wholesaler into the more expensive option.
What goes into the cost of a trip
A shopping trip has two parts:
- Transport: fuel, parking, tolls, bus fares or a taxi home when the bags are too heavy. Always count the round trip.
- Time: from leaving your door to putting the last box away. That includes the queue at the checkout, hunting for the one brand of chocolate you use and unpacking at home.
Time is the part most people leave out. If two hours of your Monday go on a cash and carry run, those are two hours you did not spend baking or selling. Value them at the same rate you use to cost your own labour. If you do not, you are working those hours for free, and your prices will never pay you back for them.
Trip cost = round-trip transport + (trip hours × your hourly rate)
How to spread it over your costs
There are two ways. Pick one and stick to it.
As a surcharge on what you bought. Divide the trip cost by the purchase total. If the trip costs $48 and you spent $320, the surcharge is 48 ÷ 320 = 15%. Every dollar of ingredients from that trip really cost you $1.15. This is the best way to compare places to shop.
As a cost per unit produced. Add up every supply trip in the month and divide by the units you made. Four trips at $48 with 640 brownies produced is $192 ÷ 640 = $0.30 per brownie. This is the version that goes into your loaded cost and your price.
What you should not do is ignore it because "I have to go out anyway". If the trip exists for the business, it is a business cost.
Worked example: brownies and the cash and carry
You bake 160 brownies a week. Every Monday you drive to a cash and carry.
- Fuel and parking: $12
- Time: 2 hours at $18 an hour = $36
- Trip cost: $12 + $36 = $48
- Weekly purchase: $320 ($200 of dry goods such as flour, sugar, cocoa, trays and boxes, plus $120 of fresh items such as butter, eggs and cream)
Surcharge: 48 ÷ 320 = 15%. Per brownie: 48 ÷ 160 = $0.30. If a brownie has a loaded cost of $1.60 before the trip and sells for $3.50, the trip takes $0.30 out of the $1.90 you thought you made on each one.
Now compare three ways of buying the same goods. At the supermarket near your kitchen they cost about 15% more, but you walk there and it takes 45 minutes (0.75 hours × $18 = $13.50).
| Option | Two-week calculation | Total |
|---|---|---|
| A. Cash and carry every week | 2 × (320 + 48) | $736.00 |
| B. Local supermarket every week | 2 × (320 × 1.15 + 13.50) = 2 × (368 + 13.50) | $763.00 |
| C. Cash and carry every two weeks for dry goods, supermarket for fresh in week two | (400 + 120 + 48) + (120 × 1.15 + 13.50) = 568 + 151.50 | $719.50 |
In option C you buy two weeks of dry goods at the cash and carry (2 × $200 = $400) plus the first week's fresh items ($120), and pay for one trip. In week two you only buy fresh items at the supermarket: 120 × 1.15 = $138, plus $13.50 of your time.
The result: weekly trips to the wholesaler beat the local supermarket here, but the mixed plan beats both. Option C saves $736 − $719.50 = $16.50 every two weeks, about $33 a month, without changing a single ingredient.
Your numbers will differ. With a longer drive, or a smaller weekly order, the supermarket can come out ahead; with a bigger order, weekly wholesale trips can. That is why you run the numbers with your own trip.
How to lower the cost per trip
A trip costs about the same whether you spend $150 or $500. Anything that makes each trip carry more shopping brings the surcharge down:
- Group the dry goods. Flour, sugar, oil, jars, boxes and labels keep. Buy them every two or four weeks if you have the space and the cash. Before you stock up, check when buying in bulk saves money and when it does not.
- Buy fresh close to home. Eggs, dairy and fruit spoil. Buying them far away and in quantity adds waste on top of the trip.
- Plan before you leave. A second run for something you forgot costs as much as a full one. A list built from what you are going to make prevents it.
- Ask for delivery. If a supplier charges $10 to deliver and your trip costs $48, delivery wins even if the goods cost a little more. Run the same comparison as above with their prices and their fee.
When seasonal swings push fresh prices up, the comparison can flip, and a longer trip to a cheaper supplier may pay for itself for a few months. The guide on seasonal ingredient prices shows how to plan for that.
Record the trip with the purchase
To run this calculation you need to know what you spent on transport and how long the trip took. The easiest way is to write it down where you keep your purchases: date, place, purchase total, transport cost and hours. After a month of useful purchase records, you can compare places with your own numbers instead of a feeling that "the wholesaler is cheaper".
The same logic works in the other direction, when you take the product to the customer. The time and transport of each drop also get spread over what you sell, and the guide on the real cost of delivery walks through it. To see where the trip fits in the whole buying routine, read how to buy ingredients for a small food business.
Do it with the calculator
In the food cost calculator, divide the trip cost by the batches you make from that shopping and add it to "Gas, power and other per batch": a $48 trip that supplies 4 batches is $12 per batch. The cost per unit and the price for your margin then include the fuel and the hours you spend shopping.
Frequently asked questions
What hourly rate should I use for my shopping time?
Use the same rate you use to cost your kitchen time. If you have not set one yet, start with what a similar job would pay where you live and refine it later.
Should trip costs go into product cost or overhead?
Either works if you are consistent. The simplest method is to add up all supply trips in a month and divide by the units you produced that month.
Is supplier delivery worth paying for?
Compare the delivery charge with what your own trip costs, counting fuel, parking and hours. If delivery is cheaper than your trip and the product price is similar, pay for delivery.
Do I need to count a trip I would make anyway?
Count the extra part. If you stop at the wholesaler on your way home from somewhere else, only the detour and the time inside the store belong to the business.