A can of soda you resell does not cost what you paid for it. On top of the purchase price come the electricity for the fridge that keeps it cold and the cans you lose to dents, leaks and expiry dates. With those in, a can you buy for $0.55 costs you $0.58, and sold at $2.00 it leaves $1.42. There is no correct margin for everyone: the price comes from your real cost, what your customers pay at the shop down the road, and how much you want each can to leave you.
The real cost of a resold drink
It has three parts:
- Purchase price per unit. The pack price divided by the units. A case of 24 cans for $13.20 at the cash and carry is $0.55 a can. If you are choosing between packs of 6, 12 or 24, the compare pack sizes per unit tool shows which is cheapest per can.
- Cooling. The drinks fridge uses power all day, whether you sell or not. Check how much your bill rose after it went in and divide by the cans and bottles you sell a month.
- Losses. Out-of-date stock, dented cans, the one that gets dropped. Count how many you lose per 100 and spread them over the ones you sell.
Real cost per can = purchase price ÷ (1 − loss rate) + power per can
If a supplier lends you the fridge, still count the power; the bill is yours. Glass bottles add breakage, and returnable bottles tie up deposit money until you hand the empties back. If you use them, count the breakage in your loss rate and the deposits as cash sitting on the shelf.
Worked example: cans and water at a burger shop
You run a burger shop and sell 330 ml cans of soda and 500 ml bottles of water. These are your numbers:
Purchases
- Soda: case of 24 for $13.20, so $0.55 a can
- Water: case of 24 for $6.00, so $0.25 a bottle
Fridge power
- Your bill rose by about $25 a month after the drinks fridge went in
- You sell 1,000 cans and 500 waters a month: 1,500 units
- Power per unit: 25 ÷ 1,500 = $0.0167, call it $0.02
Losses
- You lose 2 in every 100. Each unit sold carries 1 ÷ 0.98 of a unit bought.
| Soda can | Water | |
|---|---|---|
| Purchase with losses | 0.55 ÷ 0.98 = $0.56 | 0.25 ÷ 0.98 = $0.26 |
| Power | $0.02 | $0.02 |
| Real cost | $0.58 | $0.28 |
| Selling price | $2.00 | $1.50 |
| Contribution | $1.42 | $1.22 |
| Margin on price | 71.0% | 81.3% |
Card payments. If a customer pays by card and your provider charges, say, 3%, that is another $0.06 on a $2.00 can, so the contribution on that sale drops to $1.36. Use your real provider's rate; the guide to payment fees shows how to build them into the cost.
Per month. 1,000 cans × 1.42 = $1,420, plus 500 waters × 1.22 = $610. The fridge leaves you $2,030 a month in contribution, with its power already paid.
Prices here are before sales tax; check your local tax rules.
How to set the price
Do not copy a percentage. Put the price between two limits:
- The floor: your real cost plus the least you want each can to leave you. Below that, the fridge works for free.
- The ceiling: what customers will accept. They know the supermarket price, but with you the drink is cold, on the tray and needs no extra stop. That convenience is worth something, not anything.
Between the two, the markup and margin tool shows the margin each price gives you. The guide to wholesale versus retail pricing covers the same logic from the side of the business buying to resell.
The can next to the burger
A can leaves fewer dollars than a burger. If your burger leaves, say, $6.50 of contribution and the can $1.42, the burger wins. But the burger takes the grill, the cook and eight minutes; the can comes out of the fridge in five seconds. That is why contribution per kitchen hour matters: a resold drink uses no kitchen time, so almost everything it leaves is extra.
Three decisions where this counts:
- Meal deals. A burger and a can together raise the order value. Work out the contribution of the whole deal; if the discount comes only off the burger, you may be giving away part of your best earner. The guide to drinks, sides and extras covers building deals that keep your margin.
- Your own drinks. A house lemonade or iced tea can leave more per cup than a can, even with the work involved. Compare them on real costs; the guide to drink costs shows how to cost each one.
- Cash on the shelf. Ten cases in the storeroom are 240 cans × $0.55 = $132 that is not in your till. Buy what you sell in a week or two.
Do it with the calculator
In the food cost calculator, enter each drink with its purchase price per unit, a line for power per unit and your loss rate; it returns the real cost and the price for the margin you want.
Frequently asked questions
How much do I make on a can bought at $0.55 and sold at $2.00?
A little less than $1.45. Add the fridge's electricity and the cans you lose; in this guide's example the real cost is $0.58, which leaves $1.42, a 71% margin.
How do I work out fridge electricity per can?
See how much your power bill went up after the drinks fridge went in and divide it by the cans and bottles you sell each month. If it rose by $25 and you sell 1,500, that is about $0.02 each.
Can I charge more than the supermarket?
Yes, because you sell it cold, right now, next to the food. But customers know the supermarket price. Look at what each price leaves you in dollars before you decide.
Should I put a drink in a meal deal?
It can help if the deal raises the average order without cutting too much from the food's contribution. Work out the contribution of the whole deal and compare it with selling the food alone.