# Exploding Bar Profits abound around you. Read this now and increase bar profits tonight! Numbers don

Published: Thu Dec 01 2016

Step 1. Calculate Cost Per Ounce: Cost Per Ounce (CPO) determines how much an ounce of liquor costs. Calculating Cost Per Ounce requires dividing the wholesale liquor bottle cost by its total ounces. Our bar math is based on Liters (LTR) and Fifths (750ml).

 Liter = 33.8 ounces
 Liter Bottle Cost ÷ 33.8 oz. = Cost Per Ounce
 750ml = 25.4 ounces
 750ml Bottle Cost ÷ 25.4 oz. = Cost Per Ounce

Step 2. Calculate Portion Cost: Portion Cost (PC) is the foundation of pricing. Calculating Portion Cost requires establishing Cost Per Ounce (CPO) then multiplying by Serving Size (SS).

 Liter = 33.8 ounces
 Liter Bottle Cost ÷ 33.8 oz. = Cost Per Ounce
 Cost Per Ounce × Serving Size = Portion Cost
 750ml = 25.4 ounces
 750ml Bottle Cost ÷ 25.4 oz. = Cost Per Ounce
 Cost Per Ounce × Serving Size = Portion Cost

Step 3. Calculate Cost Percentage: Cost Percentage (CP) is the relationship between the cost of goods sold and profit margin. Cost Percentage is calculated by dividing Portion Cost (PC) by Sales Price (SP) then multiplying by 100 to convert into a percentage.

 Liter = 33.8 ounces
 Liter Bottle Cost ÷ 33.8 oz. = Cost Per Ounce
 Cost Per Ounce × Serving Size = Portion Cost
 Portion Cost ÷ Sales Price = Cost Percentage

For example,

\$26.23 Absolut ÷ 33.8 oz. = \$0.78 Cost Per Ounce
\$0.78 Cost Per Ounce × 1.25 Serving Size = \$0.97 Portion Cost
\$0.97 Portion Cost ÷ \$6.00 Sale Price = 16.17% Cost Percentage

As with Liters, 750ml Cost Percentage (CP) is the relationship between the cost of goods sold and profit margin. Cost Percentage is calculated by dividing Portion Cost (PC) by Sales Price (SP) then multiplying by 100 to convert into a percentage.

 750ml = 25.4 ounces
 750ml Bottle Cost ÷ 25.4 oz. = Cost Per Ounce
 Cost Per Ounce × Serving Size = Portion Cost
 Portion Cost ÷ Sales Price = Cost Percentage

For example,

\$15.47 Smirnoff ÷ 25.4 oz. = \$0.61 Cost Per Ounce
\$0.61 Cost Per Ounce × 1.25 Serving Size = \$0.76 Portion Cost
\$0.76 Portion Cost ÷ \$5.00 Sale Price = 15.23% Cost Percentage

Step 4. Calculate Gross Profit: Gross Profit (GP) is the difference between Portion Cost (PC) and Sales Price (SP). Gross Profit is calculated by subtracting Portion Cost from Sale Price.

 Liter = 33.8 ounces
 Liter Bottle Cost ÷ 33.8 oz. = Cost Per Ounce
 Cost Per Ounce × Serving Size = Portion Cost
 Sales Price - Portion Cost = Gross Profit

For example,
\$26.23 Absolut ÷ 33.8 oz. = \$0.78 Cost Per Ounce
\$0.78 Cost Per Ounce × 1.25 Serving Size = \$0.97 Portion Cost
\$6.00 Sale Price − \$0.97 Portion Cost = \$5.03 Gross Profit

As with Liters, 750ml Gross Profit (GP) is the difference between Portion Cost (PC) and Sale Price (SP). Gross Profit is calculated by subtracting Portion Cost from Sale Price.

 750ml = 25.4 ounces
 750ml Bottle Cost ÷ 25.4 oz. = Cost Per Ounce
 Cost Per Ounce × Serving Size = Portion Cost
 Sale Price - Portion Cost = Gross Profit

For example,

\$15.47 Smirnoff ÷ 25.4 oz. = \$0.61 Cost Per Ounce
\$0.61 Cost Per Ounce × 1.25 Serving Size = \$0.76 Portion Cost
\$5.00 Sale Price − \$0.76 Portion Cost = \$4.24 Gross Profit

Step 5. Calculate Gross Profit Margin: Gross Profit Margin (GPM) indicates the amount of profit achieved per sale expressed by percentage. It's calculated by dividing Gross Profit (GP) by Sale Price (SP) then multiplying by 100 to convert into percentages.

 Liter = 33.8 ounces
 Liter Bottle Cost ÷ 33.8 oz. = Cost Per Ounce
 Cost Per Ounce × Serving Size = Portion Cost
 Sale Price - Portion Cost = Gross Profit
 Gross Profit ÷ Sale Price = Gross Profit Margin

For example,

\$26.23 Absolut ÷ 33.8 oz. = \$0.78 Cost Per Ounce
\$0.78 Cost Per Ounce × 1.25 Serving Size = \$0.97 Portion Cost
\$6.00 Sale Price − \$0.97 Portion Cost = \$5.03 Gross Profit
\$5.03 Gross Profit ÷ \$6.00 Sale Price = 83.83% Gross Profit Margin

As with Liters, 750ml Gross Profit Margin (GPM) indicates the amount of profit achieved per sale expressed by percentage. It's calculated by dividing Gross Profit (GP) by Sale Price (SP) then multiplying by 100 to convert into percentages.

 750ml = 25.4 ounces
 750ml Bottle Cost ÷ 25.4 oz. = Cost Per Ounce
 Cost Per Ounce × Serving Size = Portion Cost
 Sale Price − Portion Cost = Gross Profit
 Gross Profit ÷ Sale Price = Gross Profit Margin

For example,

\$15.47 Smirnoff ÷ 25.4 oz. = \$0.61 Cost Per Ounce
\$0.61 Cost Per Ounce × 1.25 Serving Size = \$0.76 Portion Cost
\$5.00 Sale Price − \$0.76 Portion Cost = \$4.24 Gross Profit
\$4.24 Gross Profit ÷ \$5.00 Sale Price = 84.77% Gross Profit Margin

Calculating Explosive Bar Profits is simple. It's literally basic math applied to liquor bottles. Applied correctly, these 5 steps are your foundation for explosive bar profits. Profit is the byproduct of success and these 5 steps are you blueprint. Grab a notebook. Get a pen and begin. It's that simple.

I am Preston Rideout. I fix bars by writing bar manuals. I'm a bar operations specialist. I do two things. Perceive problems and provide solutions. Brick and mortar are the foundations for building a bar. I am the foundation for operating a bar. Visit http://www.BarManuals.com or call me 662.466.6045 for more information
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