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Subject: Re: Pricing Drinks
From: Gavin
Posted: Fri Sep 12. 2003, 01:10 UTC
Followup to: "Pricing Drinks"  by lulu  (Thu Sep 11. 2003, 22:58 UTC)
> My math skills are worse than horrible and could use some help 
> here.I'm pricing out a new Port Wine List and am trying to figure out 
> what to charge.
> Ex. If a 750 litr bottle of port costs 35 dollars and I am pouring 2 
> oz drinks and am working on a 25% liquor cost How much do I charge 
> per drink. I need this menu to go to print ASAP Thanks in advance. 
> Lorraine

75%GP is real easy to work out, other % may need some tweaking.
Basically multiply your Cost Price by 4. 

ALL FIGURES ARE ASSUMED NETT

CP = $35
2oz = approx 58 ml so 750 / 58 = 12.93 servings. Round down to 12 for spills 
etc.
$35 / 12 = CP per serving = $2.92 per serving
4 x 2.92 = $11.68. Now to work it back to check on the actual GP, we use this 
formula

 SP - CP / SP X 100

Selling Price - Cost Price = $Gross Profit (11.68 - 2.92 = 8.76)

$GP / SP X 100 = %Gross Profit. (8.76 / 11.68 X 100 = 75 %)

Works out exactly.

Bear in mind that doesn't include sales tax on the Selling Price, which you 
would obviously add to the total.
It's not usually possible to have all of your products work out to a set CP, 
because obviously you will actually want them to sell, so can't overprice some 
things, so the high end items you might take a hit on, say 30 CP, (especially 
on high end wine and champagne) while the low end stuff like post mix syrup 
will be something ridiculous like 5 CP, or 95 GP. You might have special 
offers on or happy hour deals where your GP is significantly reduced, so the 
other high GP items pick up the slack. As long as your bottom line liquor cost 
comes out to 25, all's well. 
Although I haven't gone into wastage/comps affecting liquor cost, that also 
has to be taken into account!
Now I'm pretty sure my formula is correct, it's been a while(!), but I'm sure 
if I've made a mistake someone else will point it out.

Anyway, I hope I haven't confused you even more.
G


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