What does average cost price mean?

Average cost price is the amount a restaurant or café has paid on average to buy in an item – for example ingredients such as coffee, cheese or soft drinks. It is a key figure that gives you an accurate picture of what your goods really cost to keep in stock and use in daily operations.

When you buy the same item several times at different prices – for example because of offers, price changes or varying delivery costs – the average cost price gives you a single overall average. In other words, it takes into account both the price and the quantity of previous purchases.

An example:

You run a café and buy 10 kg of cheese at €6/kg. The following week you buy 20 kg at €4.50/kg.

The total purchase is 10 kg + 20 kg = 30 kg at a total price of (10×6) + (20×4.50) = 60 + 90 = €150.

The average cost price is €150 / 30 kg = €5/kg.

The average cost price changes continuously every time you make a new purchase and record it correctly in your product catalogue.

Why is it important?

When you set the price of a menu or a drink, you need to know what the item cost you. Without an overview of the cost price you risk selling items without profit – or at worst at a loss.

If you know your average cost price, you can:

– Ensure correct pricing

– Gain better control of your contribution margins

– Spot when purchase prices affect your bottom line

– Assess campaigns and offers based on real costs

It also makes it easier to analyse which items actually contribute to the business's profit, and which may need adjusting or replacing.

How the Flexybox POS system uses average cost price

In the Flexybox POS system the average cost price is calculated automatically when you record purchases via your item number. The system uses this information to help you evaluate your pricing strategy and make sure your profit is optimised.

With up-to-date cost prices on all items in stock management, Flexybox gives you the overview you need to make better decisions about prices and product range.

Frequently asked questions

The cost price is what you pay to buy in the item. The selling price is what you charge for the item when you sell it to a guest. The profit is the difference between the two.

You need to record all purchases correctly with quantity and price – ideally through a POS system like Flexybox. The system will then update the average cost price automatically.

It is recommended to check your cost prices regularly – especially if you buy in goods often or your supplier prices vary a lot.

Yes, in Flexybox you can easily see the cost price of your items, both in the product catalogue and when analysing your contribution margins.