Popcorn has one of the highest gross margins in food: a pound of kernels, half a pound of sugar and some oil fill eight big bags. The margin moves with where it's sold: a fair bag earns the most, a fundraiser bag the least, and holiday tins earn well but carry the tin's cost. Margin = (price − cost) ÷ price, before the booth fee. In the example below, a large fair bag costs $1.15 to make and sell and goes for $6.00, a 80.8% margin. A month of four ways of selling brings $12,300 of sales and about $9,190 of gross profit, before booth fees.
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 large fair bag: $1.15, $6.00, 80.8%, before the booth fee.
- Booth fees are overhead; they come out of the gross profit.
- Fundraiser bags earn less a bag but come in big orders.
- Holiday tins carry the tin's cost.
- TaroStack costs each bag from what each batch used. More below.
A bag, costed
Prairie Pop Kettle Corn, the made-up kettle corn stand in Wichita, Kansas, pops a pound of kernels at a time into eight large bags:
| A large bag, at a fair | Cost |
|---|---|
| Kernels, sugar, coconut oil, salt | $0.30 |
| Bag | $0.25 |
| Labor: 10 minutes a batch of 8 at $20 an hour | $0.42 |
| Card fees, 3% of $6.00 | $0.18 |
| Cost | $1.15 |
How the bag's price was set is in how to price popcorn, and the business year in popcorn business plan.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Kettle corn, large bag | County fairs | $6.00 | $1.15 | $4.85 | 80.8% |
| Kettle corn, large bag | School fundraisers | $3.00 | $0.97 | $2.03 | 67.7% |
| Holiday tin, 1 gallon | Holiday markets | $25.00 | $11.15 | $13.85 | 55.4% |
| Caramel corn bag | Fairs and markets | $8.00 | $2.24 | $5.76 | 72% |
The fair bag earns 80.8% before the booth fee; the fundraiser bag 67.7%, with no booth fee to pay.
A month's numbers
A busy summer month for Prairie Pop:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Kettle corn, large bag, county fairs | 1,200 | $7,200 | $5,820 |
| Kettle corn, large bag, school fundraisers | 400 | $1,200 | $812 |
| Holiday tin, 1 gallon, holiday markets | 60 | $1,500 | $831 |
| Caramel corn bag, fairs and markets | 300 | $2,400 | $1,728 |
| Month | $12,300 | $9,191 |
The booth fees, $150 a fair, come out of that gross profit; four fairs a month take $600 of it. Tins for the holidays are bagged in heavier bags, in how to package popcorn for sale.
Get the calculator
Download the popcorn 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 bag. A rained-out fair, sugar bought at a new price, and bags popped and not sold change what the month really earned.
How TaroStack does it
TaroStack costs each bag from what each batch used, so margins sit on real cost.
True cost from the batch. Each batch takes kernels, sugar and oil 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 bag 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.