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40% vending fee - would you do it?

M

Marsha

Guest
Have any of you BBQ folks out there who do vending worked a venue where they ask for 40% of your take at the cash register as your vending fee? We are considering a new venue, but really need to crunch some numbers to see how profitable it might be.

We have vended at an event that took 30% and I thought that was pretty steep, but we did make money. The new venue is one that will have some very big crowds.

Lots to consider. Any ideas or suggestions?
 
That is steep. Any other costs involved like permits? Consider competition. Ask them for numbers for comparable vendors for the last three years. Consider what % you need to make for it to be worthwhile. If you didn't cook this event, would you be working at all during that time?
 
Marsha said:
Have any of you BBQ folks out there who do vending worked a venue where they ask for 40% of your take at the cash register as your vending fee? We are considering a new venue, but really need to crunch some numbers to see how profitable it might be.

We have vended at an event that took 30% and I thought that was pretty steep, but we did make money. The new venue is one that will have some very big crowds.

Lots to consider. Any ideas or suggestions?
Click to expand...

LB Grand Prix gets 32% less sales tax on top of your vendor fee - If this helps. Hard to make it back until the 3rd day's sales.
 
As said earlier Marsha, absolutely not. 40 % before expenses would be suicide IMO.
Given an overhead of 25% (low), out of $1000 sales you have $250 in overhead, they get $400 and that leaves you a profit of $350.
Not good business in my book.
Good luck on your decision and let us know what you decide. :biggrin:

What kind of event demands 40% of your cash sales?
 
How are they gonna know what your cash sales are for the day?
 
Back when I was shooting video for horse events, this started coming in vogue, and a few were asking for that much money. It doesn't make sense for a business to do this. I know they claim that they are giving you a market, but, it is still very difficult unless the market has no other choices. I would not do it, even if I had an exclusive, unless there was some safeguards in the agreements.
 
Thanks for the great replies. The venue is Infineon Raceway, north of San Francisco. They hold a NASCAR race once a year, motorcycle, NHRA, and Indy car races, etc. We were pleased that they approached us to vend there. But, now that I think about it, why does the venue need to go out looking for more food vendors? The best venues we work often have a waiting list of people wanting to vend there because they have a good reputation as being a well organized, profitable event. I have a list of questions for them when I talk to them after we read the information packet they are sending, and that list is getting longer all the time.
 
When I did catering on a very small scale for a couple years I wound never consider those type fees.
I did private partys, graduations ect., no vending.
That almost sounds like the mobsters demaning a very high price for your protection or even allow you to vend.
I hope im not out of line here with my comments but thats borderline insanity.
 
lazybonesmoke1 said:
How are they gonna know what your cash sales are for the day?
Click to expand...

Some places send a person out each day to watch you Z out your cash register and everyone initials the paper roll at that point then you turn it all in at the end of the day.
 
Plowboy said:
That is steep. Any other costs involved like permits? Consider competition. Ask them for numbers for comparable vendors for the last three years. Consider what % you need to make for it to be worthwhile. If you didn't cook this event, would you be working at all during that time?
Click to expand...
We would have to get a permit from the county HD up there. I will ask about previous vendors. Good idea.

C Rocke said:
LB Grand Prix gets 32% less sales tax on top of your vendor fee - If this helps. Hard to make it back until the 3rd day's sales.
Click to expand...
We have crunched numbers that show us many events are usually not profitable until the second day. We now rarely do 1-day events.

Bbq Bubba said:
As said earlier Marsha, absolutely not. 40 % before expenses would be suicide IMO.
Given an overhead of 25% (low), out of $1000 sales you have $250 in overhead, they get $400 and that leaves you a profit of $350.
Not good business in my book.
Good luck on your decision and let us know what you decide. :biggrin:

What kind of event demands 40% of your cash sales?
Click to expand...

Wow, those numbers do put things into persepctive. $350 profit on $1000, and that is looking generous... Hmmnnn...
 
Last edited by a moderator:
Also remember that you will pay California State Board of Equalization 8.25 % of sales. This means that if you raise your prices to cover the 40% being charged to you----you will also be paying the state 8.25 % .

Events like this collect cash register tapes every hour and question any No Sale ring ups. They also put a sign on your vending booth to tell customers where to report you if they do not get a receipt from you.

You will have a captive audience that can afford an eleven dollar tri tip sandwich.
 
Marsha would be very interested in seeing a list of questions that you are asking them. There have been a few events that have asked us for 20% and I would love to have some back -up via important questions to ask.

BTW at 40% I would walk away if vending over there. Here things haven't gotten advanced enough to need a cash register or receipts.
 
Chuckwagonbbqco said:
Also remember that you will pay California State Board of Equalization 8.25 % of sales. This means that if you raise your prices to cover the 40% being charged to you----you will also be paying the state 8.25 % .

Events like this collect cash register tapes every hour and question any No Sale ring ups. They also put a sign on your vending booth to tell customers where to report you if they do not get a receipt from you.

You will have a captive audience that can afford an eleven dollar tri tip sandwich.
Click to expand...

Business Friendly environment over there in Cali!! :cool:
 
Chuckwagonbbqco said:
Also remember that you will pay California State Board of Equalization 8.25 % of sales. This means that if you raise your prices to cover the 40% being charged to you----you will also be paying the state 8.25 % .

Events like this collect cash register tapes every hour and question any No Sale ring ups. They also put a sign on your vending booth to tell customers where to report you if they do not get a receipt from you.

You will have a captive audience that can afford an eleven dollar tri tip sandwich.
Click to expand...

$11 tri-tip sandwich. Wow! We charge $9 at the Laguna Seca races, but that includes potato salad. And that seems like a pretty high price, but the venue does support it.


Dr_KY said:
Marsha would be very interested in seeing a list of questions that you are asking them. There have been a few events that have asked us for 20% and I would love to have some back -up via important questions to ask.

BTW at 40% I would walk away if vending over there. Here things haven't gotten advanced enough to need a cash register or receipts.
Click to expand...

I will PM you the list later. I am still adding to it, too. :)

Spydermike72 said:
Business Friendly environment over there in Cali!! :cool:
Click to expand...
You'd think they would want to make it easy for small business to do business. We end up buying permits and licenses for everything imaginable out here.
 
That's high and you'll probably have a vendor's fee, too. Also, all it takes is one day of really crappy weather and all bets are off.

The "Ribfest" is like that here:
1. You gotta blow somebody to get on the "list"
2. You gotta pony up $1000 vendor's fee
3. Pay local licensing
4. Split the profits
5. Hope the weather stays good - what I usually would want is the DRINK concession!

On the other hand, you can potentially "make" about $10K on a Ribfest weekend but since it's ribs the food cost is significant.

Infinion would be a very cool venue (yeah, I admit it, I watch a LOT of NASCAR racing, bikes too!)
 
Marsha said:
$11 tri-tip sandwich. Wow! We charge $9 at the Laguna Seca races, but that includes potato salad. And that seems like a pretty high price, but the venue does support it.
Click to expand...

Michigan International has a BBQ vendor inside the gates that serves a 4" PP sammie for $7 all day long and its crock pot pork.

Is this for the whole season or just Nascar?

Nascar is usually sold out so guaranteed money. Where on the track would you be? High profile area or one of them off distance turns? That could be a VERY lucrative contract, even with the high percentage!
 
The fellow we talked to said the whole season. BUT, as we have learned from the Laguna Seca racetrack, not every race draws a huge crowd. We lost money the first time we vended the 'Festival of Speed' because we over-estimated how many customers we would serve. Dumb move on our part not to research it more. So, at Laguna Seca we always vend at the biggest race of the season, the Red Bull US Grand Prix. The others, not unless we have nothing else going on.

Location is one of the big questions on my list!
 
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