Do You Have The Courage to Make More Money With Your Hot Dog Cart?
Price isn’t the only way to deliver value in your hot dog cart business. As a matter of fact it’s the very worst way.
It’s normal to be nervous during the start up phase, but it leaves you susceptible to self doubt. The temptation to lower your prices is very strong during this period because it makes you feel more confident.
You think it’s a competitive advantage, something you have control over. In reality this terrible strategy is based purely on your fear of failure.
Man up (you too ladies) and plan to charge a price that will return a decent profit.
Why you should charge more.
Let’s say you have been selling your dogs for $2.50. If you charge an extra fifty cents for your dogs here’s what happens:
If you sell 55 dogs a day, you’ll pocket an extra $5,321.25 per year (based on a 9 month selling season). That’s free money. A 16.5 percent raise which you didn’t have to work any harder to get.
That’s great, but check this out.
If you don’t charge that extra fifty cents, you would need to sell 16.5 percent more hot dogs (about nine) every day to make the same money, right?
Wrong.
You would need to sell 23.6 percent more. Thats TWELVE more hot dogs per day. How can that be?
When you charge that extra fifty cents, your costs have already been covered in your base price so you keep 100 percent of that extra fifty cents.
When you charge the base price, 30 percent of that price is eaten up by your costs. You only keep 70 percent of it. See the leverage you get by charging a premium price? It’s exponential.
Math is cool. Competing on price isn’t. You don’t have enough volume to make up the difference.
Don’t join in the race to bankruptcy just because you’re a little nervous at the moment.
Here are six better ways to deliver value:
1. Serve a kick ass product. Use top quality ingredients, super fresh condiments, ice cold drinks, and name brand chips. Watch those expiration dates – your customers do.
2. Be exclusive. Don’t try to compete with QT, Seven Eleven, and every other one-dollar-nasty-hot-dog-on-a-slimy-roller-grill-thingy operation out there. If all you offer is a green dried out no name dog with ketchup or mustard, you’ll get killed by the gas stations.
Do the regional dogs. Coneys. Mexicans. Slaw dogs. New York red onion sauce. One of your fellow readers Esteban Guzman (Stevie’s Red Hot Weenies) is killing it in Texas with his Chicago Style Dogs.
3. Be creative. The hottest trend in the country right now is “street food”, which usually refers to non traditional or gourmet offerings served from street carts. Jump on this trend by offering gourmet hot dogs. Try unusual toppings like avocado and sour cream, cilantro and tomato, crumbled bacon and chopped dates (try it – it’s good!).
Biker Jim’s Hot Dogs in Denver is becoming famous for his specialty sausages like Alaskan Reindeer Sausage, Elk Jalapeno Cheddar Brats, Southwest Buffalo, and Wild Boar Sausage. He even has a caulking gun loaded with cream cheese.
To see how creativity can get you a ton of attention, just google Biker Jim’s Hot Dogs. He owns the first 40 or so search results!
If your health department won’t allow you do do anything more than basic condiments, at least use a premium bun and “kettle” chips to brand your business as a premium operation. It works.
Better yet, get hooked up with a commissary so you can serve more creative options.
The exception is fairs and festivals where you have thousands of people just looking for a quick meal. There you can get away with a plain Jane product but still don’t sell it cheap.
4. Deliver an experience. Have some music playing (not too loud). Decorate your cart. Have a theme on certain days like “Hawaiian Fridays”. Run a little contest every now and then.
5. Be friendly. Don’t be the grumpy lady who sits in a lawn chair by her cart reading Lavyrle Spencer novels until someone rudely interrupts her to buy a hot dog. Chat up your customers. Most of them spend 50 hours a week in a cube farm under fluorescent lighting with no one to talk to. Be the highlight of their day.
6. Be findable. It’s a new decade. If you don’t know how to use Twitter, make it a priority. It’s free. It’s easy. All the major street food dudes are using it.
For those who don’t know, Twitter is a “micro blogging” service. It’s like texting but you only get 140 characters to say what you want to say, and it goes out to all your “followers” at once.
In the old days you had to be in the same place every day so your regulars knew where to find you.
When you start using Twitter, it sets you free from being tied to one location because you can “tweet” out your location each day. Your “followers”, better known as customers, always know where to find you.
If one location isn’t performing that day, just pack up and move to a different spot and tweet it out. It’s not unusual to have customers waiting when you pull up.
There you go. A half dozen ways to rise above the competition without cutting prices.
Have the courage to be the best. It pays.
What do you think about this concept? Any more ideas? Let’s hear you in the comments!
-Steve
Jeff
// Jan 11, 2010 at 12:23 am
Great read Steve,, Keep it up!
tod
// Jan 11, 2010 at 12:56 am
Steve, you are so right about pricing. I got a late start with my cart. I did my first event during the third weekend last September. I had only been out with my cart two other times that month, and sold 40 dogs each day for 3 bucks a piece. Chicago style dogs..Quality all the way too.
I teamed up with a local bar owner at the event, and set my cart up next to his bear trailer.(Doing this got me in the event right away, and with no event fee). The event was held in an upper class small city. The bar owner was selling beer for two bucks, and said we would make a killing if I sold my Chicago dogs for two bucks, too. I sold 150 dogs the first day. Hundreds of people passed by and turned their noses up at my 2 dollar dog. I actually heard one guy say to his family,”that’s just a 2 dollar hot dog. Can’t be anything special about that.” That hurt, but I learned that a low priced hot dog can make it suspect. I raised my price to 3 bucks at the beginning of the next day, and sold over twice as many dogs with a smaller crowd. I sold 580 dogs in all, and I will never lower my price again. I’m glad I learned this lesson right out of the gate!
Paul A. Kaiser
// Jan 11, 2010 at 1:32 am
Great post Steve!
Now to raise my prices and send out more “Tweets”!
J. Gagion
// Jan 11, 2010 at 1:44 am
During the current recession, that is currently being dragged into the new year by Obamanomics, it is very important that we deliver value to our Customers(clients). Delivering value is not a survival tactic but one that lends growth to your Food Cart business. The good decisions you make in bad times will be great decisions in good times. Do not wait for the bad times to make good decisions.
Steve makes good sense to keep your products at their current price point. If you are using quality meat-let your customers(clients) know-if you are using quality buns-Let your customer(clients) know. Next to your product you are the best advertisement for your product. It is your job pass that information on to your customer(clients) Clients is in parenthesis because I believe the term Customer implies a one time transaction. We all know how important our clients are. These repeat Clientele can help you deliver the concept of value to future clients. Take care of them and they will return the favor.
david klinger
// Jan 11, 2010 at 2:17 am
IM SORRY ILL ONLY CHARGE1.75@HOT DOG 2.25 FOR SMOKED SAUSAGE 3.00 FOR KNOCKWORST 3.50 FOR RED HOTSAND 4.75 FOR GYROS ON PITA AND IM GOING TO MAKE A KILLING
steve
// Jan 11, 2010 at 6:10 am
Hey David,
If you’re already making a killing – congratulations! That’s awesome.
Would you consider raising your prices for one week just as a test? Maybe you’re leaving a lot of money on the table and don’t even know it.
BTW, I totally respect you for posting an opposing opinion.
-Steve
Don Freeman
// Jan 11, 2010 at 7:55 am
Steve, The story goes like this. A customer walked into a propane company and asked how much they charged for a furnace cleaning. Seeing that it was summer and they were slow they replied $20. The customer asked if they could do it now. They replied yes. Cutomer asked if he could ride with the service man to his house. When they arived the customer paid the service man the $20 and said, “Don’t wory about cleaning my furnace.” Service man asked why he did not want his furnace cleaned. Customer replied, ” Cab fare out here is $25.”
Rick Forness
// Jan 11, 2010 at 9:08 am
Steve,
Your article was great.I bought one of those silly hot dog hats last year and it turned out to be a great idea, i soon had to buy two more as my customers especialy at larger events wanted pictures with the hot dog guy wearing one of the hats.This led to a face book page with many pictures and comments. We have even attended meetings not relating to the cart in other towns, where the subject of the hot dog guy with the hat and great 1/4lb hot dogs came up. You can also list events and specials ect to all your fans.
russ ("Grateful Dawg")
// Jan 11, 2010 at 9:10 am
I started this gig in April with a plump polish on a bun for #2.50 and the chili/cheese for $3. I soon made the price for ANY dog $3, as I didn’t want to mess with change (tax is included). Few and far between is the fool who passes me up, complaining about my prices. A few weeks ago this man paused to read the menu, and said well gee, he could get a whole package of dogs at the local store for 50 cents (I doubt this). I cheerfully encouraged him to do just that. “Bon soir, cher! Au revoir!” A minute later, he returned, and got the chili/cheese dog (I have beau coup free fresh condiments, all the best Cajun sauces, peppers, and spices appropriate for a dog). This crotchety sucker has since become a regular.
When people walk by and ask is it a “Lucky Dog” (the carts in the French Quarter), A Coney, a Chicago style, I always say, in the local patois, “Mais, cher, dis is a C******s Dawg”, using a local loving word for “Cajun”…that is not cool to say unless you are one!
The Frito Pie sells briskly at $3. No, I do not need to feel like I hafta compete with the dollar dog at Walmart!!
Am the only dog/BBQ vendor doing the annual Boucherie down in beautiful St. Martinville. February 13th, if y’all down for Mardi Gras (will be along the parade route for that too!!) Not for the squeamish or those intimidated by happy, drunk, dancing Cajuns!!
famousray
// Jan 11, 2010 at 10:33 am
steve the price makes alotta sence now tell me about the up sell 2 dogs soda and chip $?
steve
// Jan 11, 2010 at 10:47 am
Hey Famousray,
As in all things – test, test, test. Try different price points until you meet some resistance, then back it off a notch.
That’s the only true way to determine how high a price your local market will bear.
-Steve
steve
// Jan 11, 2010 at 10:48 am
Don,
That’s FUNNY.
LOL!!! Love it!
-Steve
Michael
// Jan 11, 2010 at 12:21 pm
Well, I guess I need to go up because I get $3.00 for a hotdog, chip and 12 oz coke all name brand and $4.00 for a all beef sausage dog, chip and 12 oz coke, expect when I go to a fesival where everything goes up $1.00. I have been real happy with my profits at this point but I guess you need to understand I have no cost to spot my cart, no city fees and just health department and Serve Safe fees to pay. Maybe I will go up in the summer. Duggs Doggs “Good!! Good!!
Hot Dog City
// Jan 11, 2010 at 1:05 pm
You also need to take in consideration what part of the country you are selling in. We are in a small city in the south. We cannot sell our products at the same price that you might sell for in NY City or Chicago. You can get cheap hot dogs around our area @ 2 for $1.50 at any of the Quick Stops. So we sell our basic dog at $1.50 each ($2 at special events) but we use top end products. We can buy these top end products locally at very reasonable prices. But if we where selling in a large city, we would have to charge more.
Esteban Guzman
// Jan 11, 2010 at 8:12 pm
If you check out my webpage, you will see what I have my items priced at. I feel like I’m on the low end, but for now I can live with that. However, as soon as I start getting supplied with Vienna all beef franks, I’ll have to raise the price of the Chicago dog simply because I’ll be using a premium frank for my staple. As far as the other prices, I will keep them at where they are. No one has complained about my prices yet, in fact, I had someone comment that they would have expected to pay at least $5.oo for a chicago style hot dog, and thats with the franks I get from Sam’s Club! I’m excited about the future and what it holds in store for me and my hot dog business. I’ve already have folks trying to hire me for the 4th of July parties!
Thanks Steve, for mentioning me in the story, that was totally awesome reading it earlier today. Keep up all the good work, and lets all sell lots of hot dogs!
Esteban
tenacity
// Jan 12, 2010 at 7:45 am
Thanks Steve and all for the great article!! I am almost done with The Rte 66 Little Red Wagon!! Will be opening soon!! What do you think about a Southwest dog? (roasted corn, tomatoes, and green chilis?????) Can’t wait for the Big Foot movie to come out, you had better believe I’ll be taking advantage of that!!!
Jim Lester
// Jan 12, 2010 at 7:52 am
After figuring all the costs including meat, The bun,condiments propane, insurance. we sell our dawgs 2.50 sausages 3.00 and work on a 78% markup don’t see any reason to go up we are in a small town and sell between 55 and 100 dawgs a day during the winter and double or more when the tourists show at the diamond mine.
Jim and Kay ” The Great American Dawg wagon’
Jim and Kay “
Mark
// Jan 12, 2010 at 10:37 pm
Thanks Steve! Just what I needed!
RON
// Jan 13, 2010 at 10:42 pm
i like the storys every body had the prices an there location .hope to get started soon .thank steve i getting ready to build one of your carts .cant waite ron
tony tysinger
// Jan 14, 2010 at 6:19 pm
steve i think you are doing it right could toy send me a photo when you are finish with it and how you put it together thanks alot if i need to pay you auy thing please le me know thanks tony
John
// Jan 16, 2010 at 11:45 pm
As a semi-comparison look at what the burger, sub, and other fast foods are giving you for $5 or more, some dont even include a drink or side for that. Surely a fresh cooked quality beef dog with the trimmings, name brand drink and chips is worth $5 dont you think?
Esteban Guzman
// Jan 20, 2010 at 10:33 pm
John, absolutely, especially if you offer top end hot dogs and fresh toppings, 5 dollars is very reasonable! I’ve changed up my prices a bit because I’m now offering Vienna beef franks for my chicago style hot dogs but its worth it. I still have the Bakers and Chefs franks for my other offerings, but I wanted Vienna for my chicago dogs to be truly authentic. I can tell you what, people down here in Central Texas who have never tried a chicago dog are truly raving about my hot dogs and I’m excited! I’ve also added more items to my menu without actually adding to my overhead. I’ve already had the food, I just decided to be a little more creative on how I serve it. Good luck to everyone, hope its a great year for everyone!
Esteban Guzman
Stevie’s Red Hot Wienies
Boner Billy’s
// Nov 30, 2010 at 8:42 pm
Great read, thanks so much. As we continue to develop the best Hot Dog possible at Boner Billy’s Famous Hot Dogs we are always looking for great ideas to market, and provide the best for our customers. Thanks so much.
Donnie Ward
// May 4, 2011 at 7:59 pm
I started selling dogs .25 cents more than my competition a block away. He was outselling me for the first three months. Eventually the word spread that my dogs were much better, now he complains to me that I am running him out of town. I also heard he complains to customers if they use too much ketchup. Be friendly, sell a good product, and make your money on quantity. I also have more condiments than anyone in town. Chili, Cheese, Sauerkraut, Stewed Onions, Raw onions, Relish, Hot sauce, ketchup, Mustard, Honey Mustard, and Spicy Brown Mustard. Oh yeah, i also have a styrofoam container for customers that want it to go. Costs more, but they keep coming back day after day. Happy Dogging