One hurdle new hot dog stand owners sometimes struggle with is knowing exactly how much to charge for a hot dog. While there aren’t really any 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 come down to a variety of factors, like 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 baseball stadium, you can charge the best price. If, on the other hand, you’re aligned with many other concession stands competing for business, then your pricing should be more realistic.
It is important that you get the price right. If you price too low, you will have a hard time making a profit and your business model will not be viable. If you price too high, you’ll lose sales, and that means your overall profit won’t be as high as it 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.
local competition
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’ve done a comprehensive assessment of prices in the wider area, you can look at the prices of the competition in the immediate area around your booth.
You should price your products in line with other local vendors or you should seek a higher price than theirs and offer more value in the form 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 Prices
When it comes to pricing, it helps if you have a good understanding of your costs in terms of ingredients per hot dog, as well as other overhead.
If you’ve paid a lot of money to get a vendor’s permit or to secure concession space at a major event, you’ll need to have strong prices that reflect these costs.
go by volume
In the fast food business, it’s generally better to price your products low and make a profit on sales volume if you can pull it off. This will ensure that you’re clearing out 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 decent sales volume, then this is generally better than doing lower volume and looking to make a higher amount of profit on each sale.
Value meals, add-ons and price points
Consider offering inexpensive or ‘combo’ meals on your menu that include a hot dog and other offerings, such as a drink and a bag of chips. This encourages customers to buy other products from you in addition to your hot dog.
Some stands offer a fixed price for a hot dog that includes a certain amount of sauces or toppings. Customers can then request additional coverages for a small additional fee.
Give some thought to price points and the psychology behind consumer buying decisions. In the fast food market, the price of $5 is still a common mental barrier for many people. If you offer meal combinations that stay slightly below this level, then you should be fine.
Discount to liquidate stocks
There’s no point in bringing inventory home at the end of the day if you can avoid it. You don’t necessarily want to be known as a regular discount dealer and have people show up at a certain time looking for a bargain. However, if you are working at a temporary location, you can also offer a discount towards the end of the day to clear out your stock.
price test
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 place or you’ll find that it annoys your regular customers.
