Every cent counts when it comes to maintaining your cost of goods (COG) and ultimately, your bottom line!
Reducing, reusing and avoiding packaging is a great way to improve your COG. We'll show you how.
COST OF GOODS CALCULATOR
Firstly, have a look at your current COG.
We've based this calculator on coffee, but you could adapt it to any F&B product you sell.
Use our calculator below to input your current costs and prices, and see it calculate profit outcomes.
See the effects of a reusable discount - this can help you decide whether to offer one.
Aim for a 20 - 25% COG, giving you at least a 75 - 80% profit margin.
Note: please wait for calculator to load.
IMPROVING YOUR COST OF GOODS
If you'd like to improve your COG (let's face it, who doesn't), you'll need to reduce costs, and/or increase prices.
Reducing costs
You can reduce any of your input costs (e.g., by shopping around, asking a better price for bulk purchase, COD discount), but reducing, reusing and avoiding packaging is one of the most effective and easiest ways.
Just try inputting '0' for cups and lids in the COG calculator and see the effect it has!
Be careful simply looking for a cheaper single-use cup - consider quality, customer demands, environmental costs and your business brand, responsibilities and reputation.
Ideas to consider:
Switching to a different product, e.g., from double wall to single wall cups.
Can you use less packaging? Ask the customer if they need a lid (a sign can work wonders).
Encourage customers to BYO cup or dine-in - no takeaway packaging required!
Implement a cup library or swap system.
Below, you can calculate the overall savings for every single-use cup and lid you remove.
See below for some ideas on boosting reusables.
Increasing prices
If you're considering increasing prices, know your customer and what they’re willing to pay.
Are they price or quality driven?
Are they loyal and feel like they’re part of your community?
Cafes that attract a loyal following are rewarded by increased sales and less price sensitivity.
Consider the following ideas to build loyalty (and boost reusables at the same time).
-Notes replace below with visual guide
Sell Branded BYO cups - Make $10 - $15 profit per cup.
Upsell at POS
Offer a free coffee with purchase.
Brand Loyalty - A branded cup reminds a customer of your business and promotes loyalty.
Building local loyalty via shared values and engagement
Promote BYO on social media - only take photos and videos of reusable packaging.
Promote your achievements and impacts
promote your environmental values
Promote BYO and dine in specials in store - signage and visual reminders.
Share pictures of customers with their BYO cups on social media
BYO Loyalty cards
We’ve all used a loyalty coffee card program before: Buy 10 coffees get 1 free. Try a BYO loyalty card instead: Buy 10 coffees in your BYO coffee cup and get 1 free. Encourage the card in conjunction with selling branded cups.
Dine in and BYO deals - get creative!
Morning muffin discount (ensure you choose an item with a high margin around 15% COG). Receive a discount on the morning muffin when you BYO cup.
Staff Training
Provide staff with POS conversation tips:
Have you brought your BYO cup today?
Great to see you’re using your BYO cup Jane!
Ask your plastic free places coordinator for staff training information.
Add prompts to your POS system via instructional modifiers. E.g., BYO cup. Dine In.
Run a special such as the morning muffin discount. Track staff sales and provide incentives/rewards to encourage staff to sell the special.
Record, measure and promote achievements.
Run a Reusable cup campaign with your Plastic Free Places state coordinator.
Promote how many cups you and your community have collectively saved.
Use the Keep Cup Impact Calculator to measure impact and promote it.
Take pride in your achievements and brag about them! Customers love a feel-good story that they can say they’re a part of.
-Notes to add: Find more detailed information on reuse options, including costs, time and resources required in our companion guide - Cost benefit of reusables.