Wednesday, August 12, 2009

If You Think $5 for a Slice of Pizza is Bad, How About $50,000 for Hot Dogs?

Read this article:

Hot dog heartache has come to the Metropolitan Museum of Art, where the Parks Department on Friday evicted a weiner vendor who couldn't pay his $53,558 monthly rent.

Over $50,000 a month for the right to sell hot dogs in a prime spot, right in front of the Met. Wow. Of course this doesn't count any of the other expenses for the business, like the cart, the supplies, the labor...

The whole thing brings up so many questions. First of all, despite the populist outrage that the guy must be getting screwed by the government, the city didn't "charge" him that rent, the vendor BID that amount to win the contract. Did he just wildly overestimate the number of hot dogs he'd sell? He would have had to make $1785 a day just to cover his rent. I don't know how much a hot dog costs at this stand, but since there are few other food options near the Met, I'd assume the hot dogs are very expensive, say $4, which is double what many carts charge. That means he'd have to sell 446 hot dogs just to cover the rent. Maybe round that up to 500-600 hot dogs when you factor in all the other costs of the business. Say it takes 15 seconds at least for the transaction of buying a hot dog, plus an average of 15 seconds between customers-- that means it's 5 hours of steady hot dog sales in a day to make ends meet. Not impossible, perhaps, but certainly ambitious!

In any case, the article doesn't say how much the other bidders offered for the spot, or how much the previous vendor had been paying-- I'd love to know!


Kizz said...

I don't know how much he's charging for dogs but they do sell other things and I think they make their killing on water and soda and those types of things. STILL, can't imagine you could project over $50,000/month in sales.

Anonymous said...

$2 a dog. I think he was doomed from the start.


Unknown said...

That is not good business at all.Personal finance blog