Question 1

What is a good profit margin for zoo and aquarium concessions?

Accepted Answer

Concessions, particularly beverages, can have very high margins. A well-run operation should aim for a blended gross profit margin of 65-75%. Fountain drinks can exceed 90% margin, while pre-packaged snacks might be closer to 50%. The overall goal is to have a profitable mix.

Question 2

What is included in the 'Cost of Goods Sold' (COGS)?

Accepted Answer

COGS includes only the direct costs of the products you sold. For a hot dog, it's the cost of the bun, the hot dog itself, and the condiments. For a soda, it's the cost of the syrup, the cup, lid, and straw. It does not include labor costs to prepare or sell the item, or any other overhead like electricity or rent.

Question 3

How can we increase our concession profit margin?

Accepted Answer

There are three main levers: Increase Prices: The most direct method. Small, strategic price increases on popular items can significantly lift your overall margin.Decrease COGS: Negotiate better prices with your suppliers, buy in bulk, or switch to more cost-effective products where it won't impact quality.Change Sales Mix: Actively promote and upsell your highest-margin items. Use menu design and staff training to push items like fountain drinks over bottled beverages.

Question 4

How is this different from Net Profit Margin?

Accepted Answer

Gross Profit Margin only subtracts the direct cost of the goods sold. Net Profit Margin is calculated after all expenses have been deducted from revenue, including COGS, labor, marketing, utilities, rent, and administrative costs. Gross margin tells you about your pricing and product cost efficiency, while net margin tells you about the overall profitability of the entire operation.

Question 5

Should I calculate this for each concession stand or for the whole operation?

Accepted Answer

Both. Calculating the profit margin for your entire concessions department gives you a high-level health check. Calculating it for each individual stand or even each product category (e.g., drinks, snacks, meals) will reveal which areas are most profitable and which may need attention, allowing for much more targeted management.

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Understanding Concessions Profit Margin

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