Chapter 16
Purchasing your Inventory
In the beginning, don’t worry about lining up a distributor. Just go to Sam’s Club or Costco to buy your hot dogs, condiments, paper goods, and chips. The goal is to get out there, fire up the cart and get some experience. See what works, and what doesn’t. Make your mistakes on a small scale before you have a lot invested.
This enables you to try different brands and get feedback from your customers. Once you find the products and brands that work best in your location, then contact the manufacturer and ask them to tell you where to find a local distributor.
As a matter of fact, the only products I buy at a distributor are the hot dogs, relish, and sport peppers (I serve Chicago style dogs). The chips I get at Sam’s, and the tomatoes and onions come from my local grocery. I keep an eye out for sales on soda. You can always get it cheaper at the store than from a distributor because the stores use it as a loss leader to get you inside.
How much should you buy to start? It’s hard to estimate how much you’ll sell at first so just get enough for one or two days. Start with 250 dogs and buns, 10 cases of soda, and 150 bags of chips. This will get you going without breaking the bank. You can use the sales from this initial investment to purchase your next round of inventory. That’s what is known as working from your cash flow.
If you want to learn more about the business end of things, you should consult my other book, “Carts of Cash – Business Management Made Easy”. It covers everything you need to know, from setting up a business bank account to keeping your books and paying your taxes. If you want to learn how to keep more of what you earn, this book is a must read.
So let’s say you tried three or four different brands of hot dogs and found out which one your customers like best. Now you’re ready to buy in bulk from a distributor. When you call them up, you need to know the language of hot dog sizes. It’s simple. Hot dogs are sized according to weight. A quarter pound hot dogs comes four to a pound (obviously) so they are called “four to ones” in industry speak. “Four to ones” are twice as big as “eight to ones”. Six or eight to ones are what most people consider a normal size hot dog.
I serve all beef eight to ones. That’s a good size because customers don’t feel cheated like they would if they got a tiny ten to one, but they aren’t too big either – so a lot of people will order two.
Thanks I was wandering how much should I start out with. I really appreciate all your knowledge this course is well worth the investment. I can’t stop reading because its full of so much knowledge. Everyday I get off of work I cant wait to jump on line to continue reading your course.
Your starting inventory can be 100 hot dogs and buns, and an equal number of chips and assorted sodas. Glad you like the course!
The thought that the sodas are cheaper at the Grocery store is amazing. That is a good one to use for price. Thanks. Having had a restaurant, I had a fountain, and that was real cheap. about 8 cents per glass.
Hi Steve, have you heard of “Restaurant Depot? It is a distribution store for food businesses. I found that it is cheaper than Cisco, it’s cheaper than your local supermarket. It has everything that you could need for all of your food supplies and your paper goods. You will need to be a member, but the best thing it is free to become a member. The cost savings is fantastic.
Yes Bernie I have. I have never tried them because I live so far from a major city, but my students report good things. Thanks for bringing this up, it is valuable info for new slingers!
Hey Steve,
The closest Sams Club is an hour away and they don’t carry any of the Vienna products 🙁 Which is the only thing my husband wants to use.
Will we have to just order straight from Vienna? If so, do you have any suggestions on how we should start building a relationship with them?
Thanks!
Call Vienna and ask for sales. They can tell you if they have a distributor near you.
Steve,
where do you get your vienna beef hot dogs from?
Hi Frank,
Although I still like them, I no longer serve Vienna. I now get my hot dogs from a local meat processor. They are 100% Black Angus Beef. Delicious!
Convenience stores are a great place to get can soda. Every month they alternate sales between Pepsi and Coca Cola. Usually you can get 3-4 12pks for $10. That’s roughly an avg of $0.25 per can. Nice profit margin if you are selling at $1.00 per can. Bottled water is even a better profit margin. I get it from the grocery store, $2.88 for 36 bottles = $0.08 per bottle. Sell for $1.00 per bottle. Tip: Canned soda only has a viable shelf life of 30 days according to a Pepsi Rep, so don’t buy enough to fill your garage if you aren’t selling it all in a month.
Great tip. Thanks Terry!
So Im doing an event (which happens to be my first gig as well) that they anticipate 120 people for. Would it be wise for me to still plan on 100 hot dogs?
Yes, that would be a good idea. You can always take home the uncooked ones and refrigerate/freeze them if you don’t sell out. Good luck!!!