Selling cotton candy is profitable if marked up sufficiently.
A motivated entrepreneur can often turn a profit selling cotton candy at local events. There is almost always a demand for sweet treats at festivals and fairs, but starting a cotton candy vending business still requires some careful planning and preparation to perform to its fullest potential. The first task facing a would-be cotton candy seller is sourcing the machinery and raw materials necessary. In more isolated locations, this may require that the entrepreneur order supplies through mail order or online shopping.
Startup Costs
A cotton candy machine costs a fair amount of money at $600 and up for professional cotton candy machines as of April 2011; however, this expense can be somewhat mitigated by renting the device from a party supply store. There also are business licensing costs, which are generally handled by the municipal or county government depending on the location, the exact pricing of which varies significantly by region. There also is the one-time cost of building an attractive cart or kiosk. Do not skimp on the kiosk, since it is essentially the store front for the business and needs eye-catching signage as well as a clean look to attract the most customers.
Markup
Since cotton candy is basically just sugar and food coloring, there is room for considerable markup. Scout out the other event vendors and see what their prices are. A markup of 50 to 80 percent from material costs is a good starting point. Do not forget to factor in indirect expenses, such as the cost of travel, gas and labor -- if hired help is needed -- into the final markup. Record how many sales are made every day. Sales records from past events, when compared to attendance figures, can help build a ballpark estimate of future sales at similar events. Ballpark revenue projections help you adjust the markup percentage to keep the operation profitable.
Venues
Often the Arts and Entertainment section of local newspapers makes a good starting point for finding upcoming event. Sometimes, newspapers even advertise events months in advance, meaning that there should be vendor space available. After obtaining the name and location of the event, it is easy to look up the event host's website or place a phone call inquiring about a spot for the cotton candy cart or kiosk. Reading newspaper back issues at the library can help an entrepreneur identify local recurring events, such as regional traditional festivals that newcomers to the area might not otherwise know about.
Complementary Items
Sugary treats make people thirsty by drying out the palate, so cash in by selling cold refreshments. Try to have a range of beverages to suit multiple tastes: sodas for those looking for a bubbly bite, juice for the more health conscious, and water that costs less than the other drinks to draw the thrifty consumer. Having a few healthy snacks on hand like granola bars or fresh fruit may draw customers who would otherwise not be interested in the kiosk.
Payment
Taking cash is by far the simplest and least expensive way of taking payment; however, allowing customers to buy with credit and debit cards may attract sales that other vendors miss out on. Banks and other financial institutions often offer portable point of sale devices to their business clients who request them. Taking alternate forms of payment does cost money, so be sure to set the product markup to a level where the venture remains profitable.
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