How do you get 20% COGS?

[dperry]

I'm trying to lower my COGS and I'm shooting for 20%.  I've found that it's very difficult to get down to that level for 25c vends.  The only ones I can seem to get for that are the Sticky Things small sticky mix at $12.95 a bag.  That equates to 20%.  So any product that is over $12.50/bag is going to be over 20%.  It breaks down to roughly this:

250 count bags/cases sold at 25c vends:

20%  $12.50

25%  $15.50

30%  $18.75

40%  $25.00

I am only bringing this up because I'm getting quite frustrated trying to sell toys at a low COGS.  I'm trying to upgrade my accounts to 50c vends, but that will go slowly and I'm afraid that I will loose sales.  I have one account where I upped my vends on 2in machines from 50c to $1 and the sales became non-existant.  So I'm reluctant to raise prices.

I recently purchased from A&A (the cheapest place around) some of the new Grow Animals that grow in water.  Those are $18.50 so they are at 30% COGS at 25c vends.  But this is about one of the cheapest products they have.  The jewelry is also the same COGS too.

I guess I'm just frustrated, and thinking about what I can do to bring down costs, yet keep some good product that kids want to buy.

[caserri]

Darryl,

For what its worth, I've never been to 20%. My magic number was always 30%. I have seen the number 20% being posted here recently but when you do a search, it rarely was mentioned as an attainable figure in the past.

This is an interesting subject. We all would like to have the lowest possible cost but I'm wondering why 20% now seems to be the "target" when 3 years ago it was 30%.

I'm not faulting you for wanting a lower GOGS, this is just an interesting observation.

[Big Mike]

The only way to get to 20% COG on toys is to be at .50 on 1" and .75/1.00 on 2". That is if you want to sell much of anything. Then again you can sell cheap sticky mix,27mm, & GB all day for .25 and hit 20%. Nothing wrong with that either. I want my COG to be as low as possible. I just use 20%. You have to have something to aim for. Thats just my #

Mike

[alyssamma]

My costs are between 29% and 33% - it varies a little over time. Sometimes it has been as high as 35% when PMM prices spike

[havending]

vend prices are hurt because the U.S Mint will not stop making the dollar bill.  If there were only dollar coins  then getting one dollar or even two would be easyer.  Look up north to out friends in canada. They easly get 1.00 for our .50 toy and 2.00 for our 1.00 toy.  The exchange rate is .997 to a us 1.00.  They are buying many of the same products we are but they are able to make more profit.

Dperry i can see why you are not wanting to go to .50 one one inch with your past experience with 1.00.  Kids can gather two quarters much easyer than four.  50 works well on one inch and all the major companies are doing it and i havent seen any of them switch back to .25 there is just no profit in it. 

Chose products wisely and order more product to hel keep cost and freight down.

[JEREMYTINA]

We are averaging 16% COGS at our gumball locations with our Skittles or Mike and Ikes at each location.  We go much higher on PMM or MM locations.