If you have recently started your own cotton candy vending business, one of the first things you will need to do is determine what price you will charge for your product. The research you will need to do to set a price for your cotton candy is the same research necessary for determining pricing in most other businesses. Paying special attention to this aspect of your business is key, as charging too high a premium can deter customers while too low a premium can decrease your potential profit.

Business Costs

You will need to determine the exact cost to you for all of your cotton candy supplies, such as special grade flossing sugar, artificial flavoring, coloring, plastic bags and paper cones. Also, consider the exact cost to you for maintaining your cotton candy machine. If you are financing your machine, include loan payments. Include rental rates if you are leasing the machine. Estimate the amount of money you will have to spend on general service and upkeep of the machine, such as cleaning and repairs. Determine the amount of all other business expenses; including travel expenses such as gas, drive time for employees and potential car repairs due to general business related wear and tear on the vehicle. Don't forget hourly employee rates.

Servings

Decide on an appropriate cotton candy serving size. Avoid a serving size that is larger than necessary, which will cost you more money and probably generate consumer waste if they throw out half of the cone. Avoid too small a serving size that will make customers feel they are not receiving a good value for their money. Consider a serving size that appears to be large enough to satisfy a customer without creating excess cotton candy waste. Make sure you scope out the price of competitors at each venue. If there will be multiple food vendors, adjust your price and serving size, if necessary, to offer an affordable rate that entices customers to purchase from you.

Pricing

Add up the total monthly cost of supplies, labor, travel expenses, venue fee, machine payments and machine maintenance. Divide this number by the amount of days you will be present at a venue (If your expenses are $5000 for the month and you are vending 12 days out of the month, divide $5000 by 10 for a total of $500. This is your daily expense). Take the daily expense number and divide it by the amount of hours working the venue (10 hours at the venue divided by $500 equals $50 per hour). Investigate the type of venue and determine the best way to make a high profit. If it is a large venue with large crowds, you can sell more cones for less money (100 cones per hour at $1 per cone is $100 per hour, multiplied by 10 hours is $1000, minus $50 daily expense equals $950 profit). If it is a smaller venue with less volume, consider charging a higher rate per cone (40 cones per hour at $2 per cone is $80 per hour, multiplied by 10 hours is $800, minus $50 daily expense is $750 profit).

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