Cotton candy is spun sugar and air: an ounce of floss sugar makes a big cone, so the ingredient cost is pennies. What eats the margin at fairs is the fair's share, often a fifth of the price, and the staff on the machine. Shop tubs and parties keep more. Margin = (price − cost) ÷ price. In the example below, a fair cone costs $2.18 to make and sell, the fair's share included, and goes for $5.00, a 56.4% margin. A month of four ways of selling brings $10,400 of sales and about $6,350 of gross profit.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- Count your time as a cost, even if you don't pay yourself yet.
- A fair cone: $2.18 with the fair's share, $5.00, 56.4%.
- Floss sugar is pennies a cone; the fair's share is the big cost.
- Shop tubs keep more of the price.
- Parties are booked by the hour, with the machine.
- TaroStack keeps floss sugar, cones and tubs counted and costed. More below.
A cone, costed
Route 66 Cotton Candy Co., the made-up cotton candy maker in Tulsa, Oklahoma, I use in these examples, spins cones at fairs and fills tubs for shops:
| A cone at a fair | Cost |
|---|---|
| Floss sugar, an ounce | $0.18 |
| Cone and bag | $0.20 |
| Staff on the machine, and the fair's 20% share | $1.80 |
| Cost | $2.18 |
The business year is in cotton candy business plan, and the license in license to sell candy.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Cotton candy cone | Fairs | $5.00 | $2.18 | $2.82 | 56.4% |
| Cotton candy tub | Shops, wholesale | $3.50 | $0.90 | $2.60 | 74.3% |
| Party, two hours | Birthdays and events | $300.00 | $138.50 | $161.50 | 53.8% |
| Cotton candy tub | Online, shipped | $8.00 | $1.59 | $6.41 | 80.1% |
The fair cone gives up a fifth of its price to the fair; the shop tub keeps 74.3% with no fair to pay.
A month's numbers
A busy month for Route 66 Cotton Candy:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Cotton candy cone, fairs | 1,200 | $6,000 | $3,384 |
| Cotton candy tub, shops | 400 | $1,400 | $1,040 |
| Party, two hours, birthdays and events | 6 | $1,800 | $969 |
| Cotton candy tub, online | 150 | $1,200 | $962 |
| Month | $10,400 | $6,354 |
Fair cones bring the most gross profit, but the fair's share takes $1,200 of the month's sales. How candy margins compare is in candy business profit margin.
Get the calculator
Download the cotton candy 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 a cone. A humid fair day that wilts cones, and a fair that takes 25% instead of 20, change the month.
How TaroStack does it
TaroStack keeps floss sugar, cones and tubs counted, and costs every batch.
Supplies in their units. Floss sugar by the carton is used by the ounce, and tubs and cones by the case are counted by the each.
Designs as recipes. Each tub is a recipe of its supplies, so a batch takes them off stock and is costed from what they cost, and good and rejected pieces are recorded.
Reordering. Supplies come up on a reorder list in days of cover, worked out from how fast they're used.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| Supplies on hand | Count the shelf | Stock in its own units |
| What a batch cost | Prices you type | Costed from what you paid |
| Tubs that wilt | Not counted | Good and rejected on each batch |
| When to reorder | When it's low | Reorder list in days of cover |
Recipes, units, costing and reorder lists 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.