When you are in the process of opening your coffee shop, you should be thinking about how much profit your menu items will have. As a coffee shop, you will be selling many cups of coffee. Have you ever thought about how much profit is in a standard cup of coffee?
According to Small Business Chron, you can profit 24 cents per cup of coffee. We will find out answers to these questions.
How is the average profit of 24 cents per cup calculated?
How can I calculate the profit margin of other beverages such as espresso?
What are affordable wholesale companies for low-cost yet high-quality coffee cups and lids?
How can you reduce fixed costs to increase your profit per coffee cup?
How much should you charge for small, medium, and large coffee cups?
What should I do to calculate the profit in my coffee shop’s coffee cups?
This number is only an average profit. The specific profit of the cup of coffee at your coffee shop will depend on the following
1. How is the average profit of 24 cents per cup calculated?
The breakdown of a cup of coffee achieving 24 cents profit is as follows.
- The cup for the coffee is about 13 cents.
- The lid for the coffee is maybe 3 cents.
- The overall labor cost of making the coffee along with the cup and lid costs about $1.17.
- If you sell a cup of coffee for $1.99, you will make about 82 cents profit.
- Accounting for fixed costs, the overall profit will be about 24 cents per cup.
2. How can I calculate the profit margin of other beverages such as espresso or latte?
To calculate drink profit margins for espresso or lattes, visit the Kerry Food Service drink calculator. Follow these steps to complete the form.
- Select the cup size of the drink you want to sell.
- Choose whether you are selling the drink in a hot cup, cold cup, or reusable mug.
- For espresso, it will be a hot cup.
- For teas, it will be a cold cup.
- If customers want a reduction in their bill, they can use a reusable mug or coffee cup that equates to those ounces in the calculator.
- Add any flavoring that is in the drink.
- Indicate whether the drink is drip coffee or espresso.
- If you put milk in the drink, indicate this.
- Write the cost of miscellaneous liquids going into the drink.
- Put in the estimated cost of toppings or garnishments for the drink.
- Indicate the cost of the straw and lid used per cup of this drink.
- Set the price of your drink and the percent profit margin you are trying to achieve.
3. What are affordable wholesale companies for low-cost yet high-quality coffee cups and lids?
Here are some affordable wholesale companies that sell high-quality coffee cups and lids for a low cost. These cases equate to close to an average for the cost per cup that is needed to make a cup of coffee.
The WebstaurantStore offers a variety of different types of coffee cups and lids sold in cases of 500-1,000 units for an affordable wholesale price. EcoChoice is the main brand for cases that fit this range of supply units.
All of the below prices and costs per cup of coffee is for the EcoChoice compostable coffee cups and lids.
- A case of 500 coffee cups that are 8 ounces each cost $51.59. This equates to 10 cents per cup.
- 500 of the 12-ounce coffee cups cost $65.24. Each 12-ounce cup costs 13 cents per cup.
- A case of 500 of the 16-ounce coffee cups cost $79.99. Each 16-ounce cup is about 16 cents each.
- EcoChoice white coffee lids that fit 8 ounces to 24-ounce cups cost $27 per case of 500 units. This equates to 5 cents per lid.
If you are interested in purchasing wholesale coffee cup supplies from WebstaurantStore, visit this link.
Be mindful that if you want to go the extra step and customize paper coffee cup sleeves to fit on your wholesale coffee cups that this will be about 10 cents per sleeve. You can purchase 15,000 units of custom coffee cup sleeves with your coffee shop’s logo on them for $1,500 plus tax. This is the best deal on this link to get the lowest unit price per coffee cup sleeve.
It will be in your best interest to purchase sleeves so that your coffee shop does not face any lawsuits for giving clients hot cups of coffee without any protection on the cup. Purchasing this deal will give you a great start on your coffee shop’s coffee cup supply when you open the doors of your business.
Hot Cup Factory
Hot Cup Factory is a fairly new online coffee shop wholesaler that was established in 2011. The most popular brand of coffee cups that Hot Cup Factory sells is the UNIQ brand. Some black, white, plaid, red, and blue coffee cups of this brand are currently sold out on the website.
The case of 500 of the 12-ounce black UNIQ coffee cups is $74.64 per case which is about 15 cents per cup. A case of 500 of the 10-ounce black UNIQ coffee cups cost $64.69 which equals about 14 cents per cup.
Unlike the coffee lids from WebstaurantStore that have universal lids for cups ranging from 8 ounces to 24 ounces, you have to buy separate lids based on the coffee cup size if you are ordering from Hot Cup Factory. They have coffee lids for 4 ounces and 8-ounce cups. There is a universal lid for 10, 12, 16, and 20-ounce cups.
For a case of 1000 UNIQ brand universal coffee cup lids that fit 10, 12, 16, and 20-ounce coffee cups, it costs $59.64 which equals about 6 cents per lid.
Based on analysis of a couple of wholesale coffee cup supplies companies, a coffee cup ranges from 10 cents to 16 cents each based on size and the number of units per case in which you are purchasing.
As for coffee lids, the average price is about 5 cents per lid unless you can find a wholesale supplier that offers it for 2-3 cents per lid to fit the above example.
4. How can you reduce fixed costs to increase your profit per coffee cup?
According to Small Business Chron, fixed costs for a coffee shop include:
- Rent payments.
- Utility costs.
- Labor costs.
- Payroll taxes.
- Advertising expenses.
- Equipment repairs and maintenance costs.
To reduce your fixed costs to increase your profit per cup of coffee, you can:
- Move to a new coffee shop location that offers you lower rent.
- Negotiate with your landlord to see if you can get a reduced rent deal if you can pay the full year upfront. If rent is $1,000 per month, your landlord may allow you 1-2 months free if you can pay an entire year upfront to him or her.
- Hire only the staff you need to run the shop to reduce labor costs.
- Do more free social media advertising to reduce advertising expenses using other media avenues.
- Purchase only the highest quality equipment that will require less maintenance every so often.
Wonder how much you will make in profit your first year HERE.
5. How much should you charge for small, medium, and large coffee cups?
To make an optimal profit on your various sized coffee cups, take a look at fast-food menu coffee prices and other small business coffee shops’ prices to figure out a competitive price to charge for your standard hot coffee offerings.
According to Fast Food Menu Prices, the average prices for Dunkin Donuts coffee range from $1.59 for a small cup to $2.29 for an extra-large cup across the United States. Some states charge higher prices for cups of coffee more than others.
Base your prices on each size cup of coffee you are offering via:
- The cost you spend on coffee cups and lids per unit.
- The labor cost involved in brewing one cup of coffee.
- How your fixed costs decrease the overall profitability of each cup of coffee.
- The percentage of profit that you want to make per cup of coffee.
6. What should I do to calculate the profit in my coffee shop’s coffee cups?
Calculate your profit per cup of coffee by following these steps:
- Discover the cost of making the coffee.
- Find out the unit price per coffee cup, per coffee lid, and per coffee cup sleeve.
- Figure out the labor cost of making the coffee per ounce.
- The number of coffee beans needed to brew the coffee.
- Estimated electrical power cost needed to brew the coffee.
- Set a price for the specific size of coffee in question. Do this for each coffee cup size.
- Subtract the cost from the price to get your overall profit.
- Account for fixed costs to get an adjusted profit per coffee cup.
How do I calculate fixed costs into the profit per coffee cup?
Let’s do some math here. Say that your coffee cups cost 10 cents each, lids cost 5 cents, and coffee cup sleeves cost 10 cents each.
Brewing the coffee and preparing it costs $1. Adding the supply cost and labor cost of the coffee, you are spending $1.25 to make your 12-ounce coffee cups. You want to sell your 12-ounce coffees for $2.15 per cup. This means your overall profit is 90 cents.
Now you must account for fixed costs. Say that you spend $3,000 per month on all of your fixed costs and that you sell about 4,000 cups of 12-ounce coffee cups per month. If your overall profit is 90 cents per cup, that means you profited $3,600 before fixed costs.
With $3,000 in fixed costs spread over those 4,000 cups of 12-ounce coffee sold, that means that 75 cents are being reduced off of each cup. Hence, the final adjusted profit per coffee cup would be 15 cents per coffee cup.
Remember to try to reduce your fixed costs using the suggestions above, so that your adjusted profit per coffee cup can increase over time.
Frequently Asked Questions
Offer at least 3-5 coffee cup sizes at your coffee shop. You can offer size combinations such as:
Small, medium, and large.
X-small, small, medium, large, and X-large.
Small, medium, large, X-large.
Sell pastries, breakfast and lunch meals, brewed tea, bubble tea, iced tea, and more to create a menu variety for all clients that visit your coffee shop.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.
Hi! I’m Shawn Chun
My adventure in coffee began when I first launched my first coffee shop back in the early 2000s. I had to figure out so many things on my own and to make it worse within 2 years of opening two large corporate coffee chains moved in just blocks away from me!
As I saw smaller and even some larger coffee shops in the neighborhood slowly lose customers to these giant coffee chains and slowly close up shop, I knew that I had to start getting creative…or go out of business.
I (like you may be) knew the coffee industry well. I could make the best latte art around and the foam on my caps was the fluffiest you have ever seen. I even had the best state-of-the-art 2 group digital Nuova Simonelli machine money could buy. But I knew that these things alone would not be enough to lure customers away from the name brand established coffee shops.
Eventually, through lots of trial and error as well as perseverance and creativity I did find a way to not only survive but also thrive in the coffee/espresso industry even while those corporate coffee chains stayed put. During those years I learned to adapt and always faced new challenges. It was not always easy, however, in the end, I was the sole survivor independent coffee shop within a 10-mile radius of my location. Just two corporate coffee chains and I were left after that year. All told the corporate coffee chains took down over 15 small independent coffee shops and kiosks and I was the last one standing and thriving.
Along the years I meet others with the same passion for coffee and I quickly learned that it is not only “how good a barista is” that makes a coffee shop successful, but the business side of coffee as well.
Hence why I started this website you are on now. To provide the tools and resources for up and coming coffee shop owners to gain that vital insight and knowledge on how to start a coffee shop successfully.
Stick around, browse through my helpful blog and resources and enjoy your stay! With lots of LATTE LOVE!