One hurdle that new hot dog stand owners sometimes struggle with is knowing exactly how much to charge for a hot dog. While there are no easy pricing guidelines you can follow, you can find the ideal price points for your business by using your intuition and doing a little research.
Hot dogs in the US currently sell for between $ 1.50 and $ 6 and have probably sold for much more than that. How much a customer is willing to pay will depend on a variety of factors, such as how hungry they are, how good their hot dogs look, and what other options they have for getting a meal or snack nearby.
If you have a captive audience like you would in a ballpark, then you can charge a lot of money. If, on the other hand, you are faced with many other concession positions competing for business, your prices should be more realistic.
It is important that you set the correct price. If your price is too low, you will have a hard time making a profit and your business model will not be viable. If your price is too high, you will lose sales and that will mean that your overall profits will not be as high as they could be.
Here are some pricing tips and some of the factors you can consider to help you determine how much to charge for your hot dogs and other menu offerings.
It helps if you can get an idea of average hot dog prices by studying other vendors in your local market. This will give you an idea of what people in your city or area are used to paying for their hot dogs.
After you have done a comprehensive price assessment in the wider area, you can look at the competitor’s prices in the immediate area around your booth.
You should be looking to price your products online with other local vendors or you should seek higher prices than them and offer more value in terms of service or product quality. Whatever you do, don’t try to undermine other local businesses, as there is no point in starting a price war and damaging the industry.
Hot dog stand costs affect price
When it comes to determining prices, it helps to have a good understanding of costs in terms of ingredients per hot dog and other overhead.
If you have paid a lot of money to obtain a seller’s permit or to secure concession space at a major event, then you will need to have solid prices that reflect these costs.
Go by volume
In the fast food business, it is generally best to price your products cheaply and make a profit on sales volume, if you can do so. This will ensure that you are cleaning your stock regularly, that you can get discounts for bulk purchases, and that your hot dog stand looks busy and popular. If your location can maintain a decent volume of sales, then this is generally better than doing a lower volume and looking to make a greater amount of profit on each sale.
Value meals, add-ons, and price points
Consider offering value or ‘combo’ meals on your menu that include a hot dog and other offerings like a drink and a bag of chips. This encourages customers to buy other products from you in addition to your hot dog.
Some stalls offer a fixed price for a hot dog that includes a certain amount of sauces or toppings. Customers can request additional coverages for a small additional charge.
Give some thought to pricing and the psychology behind consumer purchasing decisions. In the fast food market, the $ 5 price tag is still a common mental barrier for many people. If you offer meal combinations that stay slightly below this level, you should be right.
Discounts to liquidate stock
There is no point doing home inventory at the end of the day if you can avoid it. You don’t have to be known as a regular discount salesperson and people show up at a certain time looking for a bargain. However, if you are working in a temporary location, you can also offer a discount towards the end of the day to clear your stock.
Be sure to test prices over time to find out which price points produce the most profit for your business. Just don’t change your prices too often if you’re in the same location or you’ll find it annoying your regular customers.