Make Your Own Ice Cream or Buy 3 Gallon Containers from a Distributor?
What’s the better option, making your own ice cream or buying and reselling 3-gallon tubs of a recognized brand? Truthfully, there is no right answer. Both could be great options. This post will simply to outline reasons why you would go in one direction vs. the other depending on your specific situation and your specific goals.
This question is frequently debated and asked by almost everyone planning to enter the ice cream store business. In my opinion, it depends on many factors. I encourage those of you who make your own or buy a national brand in 3-gallon cans to post what led you to your specific strategy. I’ll start with the benefits of buying a national or strong regional ice cream brand that is pre-packaged in 3 or 2.5 gallon round tubs:
- People like to buy what they are familiar with
- The initial investment is lower – you only have to buy dipping cabinets and storage cabinets vs. a batch freezer, hardening cabinet, dipping cabinets, etc.
- Less machinery means fewer utilities expense
- Product consistency – making your own can also be consistent if you are the only one doing it, but once you have employees start making ice cream too, it can get tricky to maintain that consistency
- Simplicity – no manufacturing labor – you buy 3-gallon tubs from an ice cream distributor, you drop them in the dipping cabinet and scoop away
Ok, now we move on to why making your own ice cream might be the best choice:
- Cost – normal markup on ice cream you purchase from a distributor allows you to make around 70% gross profit when charging what the market will bear. In other words, if you charge $2 for a scoop, your cost is about $.60 for that scoop. When you make your own, the materials cost is much lower. That $2 scoop should cost you more like $.30-$.40. If you make Italian Ices, your cost is even less
- Exclusivity – Only YOU can sell your ice cream. Customers can buy national brands in many parlors and can also pick them up at the local grocery store
- Variety – With an Emery-Thompson Batch Freezer, you can make not only ice cream, but you can also make your own Italian Ice and Gelato.
- Homemade – People love homemade ice cream. Customers like the idea that the ice cream is made fresh and with a local twist to it. Customers like to see and know the owner of the business
- Creativity – You can invent new flavors. You can make changes to the product suit your region’s tastes. You can hold contests for new flavors using social media tools. The options are limitless
As you can see, the decision to make your own or purchase a pre-made product depends on many factors. You can make good money with both options. For those who are on a tighter budget, the best option might be to start with a pre-packaged product. For those of you who are creative and have the necessary start-up financing, you might want to consider making your own.Look forward to hearing the comments and stories of those who have made the decision one way or another.
Still have questions about starting or expanding your Ice Cream, Frozen Yogurt, or Italian Ice Business? CLICK here to Download
our FREE ebooks which will help you with:
- Location/Site Selection Analysis: Traffic patterns, area demographics, etc.
- Lease Rates – How much is too much? How much rent should you be paying as a % of forecasted sales? How you can negotiate this important aspect of a start-up.
- Little known strategies that will help you get the most out of your ice cream suppliers. Can they do better? We will let you know if the volume you are/will be purchasing warrants a better price. Tricks to help increase traffic, build repeat business.
- When to promote.
- Help with your customized business plan
- Flavor placement: YES, it matters where you put certain flavors – here’s why. 4 secrets you NEED TO KNOW before you buying a used soft serve machine. New ones are expensive and many times it makes sense to go used, but you need to know what to “look out” for.
- Menu Development Pricing strategies that will add to your bottom line, Basics of employee training and Proper scooping techniques. This is one of the most important aspects of the business which most people seem to miss.
- Keep your customers coming back.
- Hand Packing Pints, Quarts for take-home. Is this a good the idea or is it better to sell the pre-packed product?
- Should you have novelties (stick bars, etc.) in your store, or will this cannibalize sales of the more profitable scoop product? Should you sell by the scoop or by weight? How many scoops do you REALLY get out of a 3-gallon tub?
- Can you expect your supplier to pay if your ice cream melts down because of a freezer problem or power outages? Deals that seem great on the surface but really aren’t. What you can expect a supplier to help you with before you open and a ton more.
Thanks for reading this post!
Neil Williams – President of TurnKeyParlor