A bodega's shelves keep thin margins: a bottle of soda or a bag of chips leaves less than half its price, and beer leaves the least. What carries the store is the deli counter. A bacon, egg and cheese on a roll costs $2.47 in eggs, bacon, cheese, the roll, the wrap, the cook's time and the card fee, and sells for $5.50, a 55.2% margin; a cup of coffee keeps even more of its price. Margin = (price − cost) ÷ price. In the example below, a month of five lines brings $43,794 of sales and about $21,020 of gross profit, before rent and the rest of the wages.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- A bacon, egg and cheese: $2.47, sold for $5.50, 55.2%.
- Coffee keeps the most of its price.
- Packaged drinks and snacks keep less than half.
- Beer keeps the least.
- TaroStack costs each sandwich from what each batch used and keeps the shelves counted. More below.
A sandwich, costed
Kingsbridge Corner Deli, the made-up bodega in the Bronx, New York, I use in these examples, counts the grill cook's minutes in each sandwich, since the counter is staffed for it:
| A bacon, egg and cheese on a roll | Cost |
|---|---|
| Eggs, bacon, cheese and roll | $1.60 |
| Wrap and bag | $0.10 |
| Grill time | $0.60 |
| Card fees, 3% of $5.50 | $0.16 |
| Cost | $2.47 |
The store's year is in bodega business plan, and pricing the shelves in how to price convenience store items.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Bacon, egg and cheese | Deli counter | $5.50 | $2.47 | $3.03 | 55.2% |
| Coffee, 16 oz | Counter | $1.75 | $0.55 | $1.20 | 68.4% |
| Soda, 20 oz bottle | Cooler | $2.50 | $1.43 | $1.08 | 43% |
| Bag of chips | Shelf | $2.00 | $1.16 | $0.84 | 42% |
| Six-pack of beer | Cooler | $12.99 | $9.99 | $3.00 | 23.1% |
Coffee keeps 68.4%, on 35 cents of coffee and milk and a 15-cent cup; the beer keeps 23.1%.
A month's numbers
A month for Kingsbridge Corner Deli:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Bacon, egg and cheese, deli counter | 3,000 | $16,500 | $9,105 |
| Coffee, 16 oz, counter | 4,000 | $7,000 | $4,790 |
| Soda, 20 oz bottle, cooler | 3,000 | $7,500 | $3,225 |
| Bag of chips, shelf | 2,500 | $5,000 | $2,100 |
| Six-pack of beer, cooler | 600 | $7,794 | $1,800 |
| Month | $43,794 | $21,020 |
The sandwiches and coffee bring two-thirds of the gross profit on about half the sales. The beer sells $7,794 a month and keeps about $1,800 of it: worth carrying, because people who come in for beer buy chips too. Rent, power and the rest of the wages come out of the gross profit. How a bigger store's margins look is in convenience store profit margin.
Get the calculator
Download the bodega margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator holds one cost per item. Egg prices swing by the month, a grill cook makes a heavier sandwich, and the rolls left at night change what each sandwich really cost.
How TaroStack does it
TaroStack costs each sandwich from what each batch used, so margins sit on real cost.
True cost from the batch. Each batch takes eggs, bacon, cheese and rolls at the price of the deliveries they came from, so a price rise shows in the next batch's cost.
Labor on the batch. The minutes a batch took are recorded on it, so the hours behind each product are on record.
Margins by product. Margins are reported per product on that actual cost, and a price-creep report per supplier shows whose prices moved.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What a sandwich cost | One price from last season | Cost from the batch's deliveries |
| The hours behind a batch | Remembered | Labor minutes on the batch |
| An ingredient creeping up | Noticed late | A price-creep report |
| Margins by product | Re-worked by hand | Margins on real cost |
Recipes, batches, costing and margin reports are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.