COGS

[CoffeeQban]

I'm currently doing weekly inventories and I am running about 22% COGS, that includes paper products.

Is this average? Can you tell me what some of you guys are running?

Thanks,

Dave

 

[John P]

If your COGS are consistent [+/- 3%] through the first year, then that would be excellent. It would serve you better to understand what your ideals are for each area (coffee, milk,food, paper supplies, etc.) so you can easily see if any area is out of whack. Just make certain your control on your COGS is due to efficiency, good training, and sourcing great products. High quality products at high prices is good, low quality products at high prices are not so good.

 

[nemoscoffee]

We have been open for just over 3 months and our cost of goods % averages about 30%, not including overhead (rent, labor, utilities, etc). That number takes into account product, cups, lids, straws, cream, sugars, etc.

Our worst items for cost vs price are Italian Sodas/Ital Cream Sodas and Breve Lattes. Breve's run about 75% and Ital Sodas run about 65%, so there is little profit in those items.

We use organic, high quality milk from a local dairy, Insulair cups, and coffee from an out of state roaster who roasts on demand (never shelved). We intentionally set our prices lower than Sbux to start with, even though we have higher quality ingredients in our products.
Our intention is to gain a following by having superior products at a price lower than all the other shops in town, including franchises and locally owned shops. Once we have a well established clientelle, we will adjust our prices over time to be more in line with other shops in town.

JD