Is Selling Tortillas Profitable? The Margins, Worked Out

Yes, at a market, and thinly elsewhere. Flour, fat and salt are cheap; pressing and griddling by the dozen is the cost. A pack sold at a market keeps more than half its price; to a grocer or a restaurant it keeps about a third, made up in volume. The torn and misshapen seconds become chips, which keep the most of all. Margin = (price − cost) ÷ price. In the example below, a pack of ten flour tortillas costs $3.49 to make and sell at a market and goes for $8.00, a 56.4% margin. A month of four ways of selling brings $10,200 of sales and about $4,600 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 market pack of ten: $3.49, $8.00, 56.4%.
• Pressing and griddling time is the biggest cost.
• Grocers and restaurants keep about a third: volume makes it up.
• Seconds become chips, the best margin of all.
• TaroStack costs each pack from what each batch used. More below.

A pack, costed

Saguaro Salsa Co., the made-up salsa and tortilla maker in Tucson, Arizona, I use in these examples, makes flour tortillas for markets, a grocer and restaurants:

The year is in tortilla business plan, and markup worked from the same numbers in markup percentage formula.

Margins by channel

The grocer's pack keeps 38.1% and the restaurant dozen 35%; the chips keep 67%, from tortillas that would otherwise be thrown out.

A month's numbers

A month for Saguaro Salsa Co.'s tortillas:

The grocer brings the most gross profit through volume, made on the same press runs as the market packs. The chips turn the seconds, about one tortilla in twelve, into the best margin on the table. Gross margin itself is in gross margin formula.

Get the calculator

Download the tortilla 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 flour price and one seconds rate. A new press that tears fewer, flour that jumps in price, and a restaurant that doubles its order change the month.

How TaroStack does it

TaroStack costs each pack from what each batch used, so margins sit on real cost.

True cost from the batch. Each batch takes flour and fat 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.

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.

Questions people also ask

Is selling tortillas profitable?

It can be: in the example, the main product keeps 56.4% after its full cost, and a month of $10,200 in sales leaves about $4,600 of gross profit before fixed costs and the owner's pay.

What is a good profit margin on tortillas?

In the example, 56.4% on the main product sold direct; wholesale and fundraiser prices keep less, so the mix matters.

How much does it cost to make a dozen tortillas?

In the example, about $3.90 for a restaurant dozen: flour, fat and salt, the wrap and the pressing time.

Is selling tortillas to restaurants worth it?

In the example, a restaurant dozen keeps 35%, about a third of the price, for steady weekly orders.