The Half Million Dollar Wiener: Rent for Hotdog Stand in NYC? $53K/mo. | Hacker News Reader

The Half Million Dollar Wiener: Rent for Hotdog Stand in NYC? $53K/mo.

slate.com

23 pointscwan12 comments

Freakonomics also posted on it: http://freakonomics.blogs.nytimes.com/2009/08/17/hot-dog-ven... "If, on average, he sells only one hot dog and drink every minute the Met is open, with about 500 average daily opening minutes, that’s 500 servings per day. If he charges $3 for a dog and drink, his revenue of $1,500 leaves him $500 per day to cover variable costs. Seems possible, but I would expect that he’s not making economic profits."

From an economics perspective, what I also like about this is the comparison to the food vendor curb side permits that only cost $200 but are limited to 3100 permits resulting in shortage and a "thriving black market" while these specific spot permits are auctioned off. Almost like event marketing and scalping tickets.

"Last year's occupant paid $415,000 a year for the Met stands plus at least $25,000 for supplies and labor, and didn't go under—so we can assume he brought in significantly more than $440,000."

If we assume that hotdog vendor worked 365 days a year, that comes to $1,205 a day. If he works 8 hours a day, that's about $150 per hour.

If someone knows what a hotdog goes for in NYC, we can figure out how many hot dogs he'd have to sell per hour in an 8 hour workday.

Below is a link to an article with a bit more detail, that says he sells water for $2 a bottle, so a hotdog isn't going to be much more than that. If a hotdog costs $4, he'd have to sell 38 of them every hour, which is about 1 hotdog every 2 minutes, given an 8 hour workday, every day for 365 days a year.

Keep in mind all this is just to cover rent, cost of labor, and expenses. Making a profit would require selling even more hotdogs.

Also, I just looked at the Met's website, and it says they're closed Mondays, so that only leaves the hotdog vendor with 312 productive days per year. This alone will push the vendor to have to sell close to a hotdog every minute (0.73451 hotdogs per minute to be exact), just to break even.

I've been to the Met, and seen the vendors there, and they're just not that busy. Sometimes they'd get a family buying a bunch of sodas and maybe some icecream, but most of the time they're just standing around doing nothing, even on busy days. On ordinary days it's probably much worse. And in the off-season it's pretty dead (except on weekends).

So I have a difficult time believing they make that much money. But I suppose it's not completely out of the realm of possibility.

http://thebsreport.wordpress.com/2009/08/09/nyc-hot-dog-vend...

Don't quote me on this one, but I just asked a co-worker who told me they can go for 6 bucks in NY. That hotdog better come with some cheese and fries and a hotdamn drink.

Ok. That brings it back down to selling about 1 hotdog every 2 minutes, given 312 8-hour workdays per year. That's still quite a lot of hotdogs.

If you have a hotdog stand in that area paying other people to keep it open 14 hours a day 7 days a week is probably a good idea.

Assuming 312 * 8 vs 360 * 14, even 2 people at 80k still dropps the number of hot dogs per hour you need to sell.

And to reduce it even further -- there are two stands - not just 1. So it's 1 hotdog every 4 minutes for each stand.

That's only about 120 hotdogs a day per stand. That starts to sound kind-of reasonable - esp if you can make some extra profit selling a coke as well.

I've NEVER seen a street dog for six bucks. Some of the gourmet ones at Criff Dogs, maybe but definitely not from a street vendor.

Yay for Criff Dogs. The Good Morning ... :9

I loves me some Spicy Redneck, myself. I fear the Stoner Pack though. . .

In the article they say:

"vendors have long been willing to pay hundreds of thousands of dollars to push $2 dogs"

It's extremely unlikely that he makes money. From the article, the rent is set by auction. So, it's a common value auction with incomplete information, the perfect setting for the Winner's Curse:

http://en.wikipedia.org/wiki/Winner%27s_curse

If you won the rent auction, then you definitely overbid.

Which is probably why he wasn't paying the rent in the first place.

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