Estimating Cost of Goods Sold
Cost of goods sold (COGS) are determined by the amount of money you have invested in each cup of shaved ice sold. It includes anything that is sold to the customer including ice, syrup, cup, spoon, spoon straw and napkin.
COGS will vary based on the business. I have done a quick analysis to show you how I would figure my COGS. These numbers are based on current prices when this article was written. Prices are subject to change.
To avoid boring you with the math, I've gone ahead and calculated an estimated cost per each item below - just to give you an idea.
For purchasing sugar, you may want to check your local grocery store. Oftentimes, prices on sugar between your local grocery store and a warehouse club will not be that different. Granulated cane sugar will work great. We have not found a difference in the brand name sugar versus the generic brand of sugar.
Concentrates and preservatives are bought directly from us. We offer over ninety-five mouth-watering flavors for shaved ice and snow cones. Generally, for successful shaved ice or snow cone businesses, flavor concentrates are the best way to go. Your price per gallon is much cheaper and the shipping costs for concentrates are a fraction of what it costs to ship ready-to-use syrups. However, for smaller businesses or for less popular flavors, ready-to-use syrups are a great alternative.
COGS for Shaved Ice and Snow Cones
All costs are rounded to the nearest penny. The cost of ice is based on the price of $2.25 per 10 lb. bag of cube ice or block of ice. Your ice costs will be cheaper if you make your own ice. Flavored syrup costs are based on preserved syrup at 3.4 cents/ounce. Spoons, spoon straws, and napkins costs are based on case prices.