If you’ve ever been to a Chinese buffet, you know that they can be pretty affordable. In most cases, the cost of admission is just a few dollars and yet the food is pretty tasty most of the time.
So how do Chinese buffets make money? How do they manage to square this circle and stay afloat? The answer may surprise you!
In this article, we will discuss how Chinese buffets make money and how they are able to keep their prices so low and still stay in business. Keep reading!
How Do Chinese Buffets Make Money?
So, how do Chinese buffets make money? You will see below that they do so using a combination of smart business tactics and efficient operations.
Here are the tactics that Chinese buffets (and other types of buffets as well) use to keep costs low and make money:
- Use ingredients that are cheap to source
- Make food in large batches to reduce wastage
- Use frozen ingredients than fresh foods
- Charge for drinks
- Use pricing strategies to maximize customer walk-ins
- Find a prime location for the buffet restaurant
- Employ small staff and rely heavily on automation
Now let’s take a closer look at each of these points.
#1. Use ingredients that are cheap to source
Many Chinese buffets use ingredients that are cheap to source. This includes items like rice, noodles, and vegetables and cheaper cuts of meat or cheaper types of meat like chicken.
Of course, using cheaper ingredients does not always mean that the food will be of lower quality. In fact, many Chinese buffet dishes are quite tasty otherwise they wouldn’t stay in business!
It’s just that the ingredients are not as expensive, so the overall cost of the dish is lower. And this helps to keep the price of the buffet low.
#2. Make food in large batches to reduce wastage
Since most Chinese buffets are all-you-can-eat buffets, Chinese restaurants make food in large batches. Interestingly, making food in large batches actually helps to reduce wastage.
This is because when food is made in small batches, there often more food ingredients go wasted because not all ingredients can be used up before they go bad.
But when food is made in large batches, all the ingredients can be used up and there is less likelihood of wastage.
#3. Use frozen ingredients than fresh foods
Another way that Chinese buffets keep costs down is by using frozen ingredients rather than fresh foods. This is because frozen foods are usually cheaper than fresh foods.
And while some people might think that frozen foods are not as good as fresh foods, this is not always the case. In fact, many frozen foods are just as good as fresh foods, if not better because they are often flash-frozen which locks in nutrients.
Also, using frozen food ingredients means less wastage as these ingredients can be stored for longer periods of time without going bad. Also, with frozen foods, the cooks can use only what they need and store the rest for later use.
So using frozen ingredients is a great way for Chinese buffets to keep costs down without sacrificing quality. This makes Chinese buffets, and many other types of restaurants, one of the largest markets for frozen food.
#4. Charge for drinks
One of the best ways for Chinese buffets to make money is by charging for drinks. This is because drinks are usually not included in the price of admission to the buffet and so customers have to pay extra for them.
And while some people might think that charging for drinks is a bit unfair, it’s actually a common practice in many restaurants. After all, drinks are not usually included in the price of a meal at a sit-down restaurant either.
And once people pay a fixed price, they usually don’t mind paying a bit more for drinks. So this is a great way for Chinese buffets to make some extra money.
#5. Use pricing strategies to maximize customer walk-ins
A hidden secret of how Chinese buffets make money is by using pricing strategies to maximize customer walk-ins. This means that they will offer a lower price for lunch than for dinner, for example.
Or they will offer a discount for customers who come during off-peak hours. By doing this, they can attract more customers and get more people through the door.
Also, you’ll notice that many Chinese buffets are priced just below $15. This is because research has shown that this is the sweet spot for buffet pricing.
People are willing to pay up to $15 for a buffet but any more than that and they start to think that it’s too expensive. So by pricing their buffets just below $15, Chinese buffets can attract more customers and make more money.
#6. Find a prime location for the buffet restaurant
Many people who go to buffet restaurants are walk-ins. This means that they just happen to be in the area and decide to stop by for a meal. Or they work nearby and come for lunch or dinner.
So one of the best ways for Chinese buffets to make money is by finding a prime location for the buffet restaurant. This could be a location with high foot traffic or a location near office buildings or hotels.
By being in a prime location where hundreds of people see it every day, a Chinese restaurant can avoid spending money on advertising and still attract a lot of customers.
#7. Employ small staff and rely heavily on automation
One interesting strategy that all successful buffet restaurants have is to employ a small staff and rely heavily on automation. This is because labor is one of the biggest expenses for any restaurant.
Automation can include using machines to cook food or using pre-made ingredients that just need to be heated up. It means having more self-service (which buffets already are) and having fewer staff members.
Even payment can be automated with some restaurants using a system where customers scan their own QR code to pay or pay directly with mobile apps.
Most Chinese buffets make money and are profitable by using some very smart strategies and tactics.
For starters, they will use ingredients that are cheap to source. This includes rice, vegetables and spices.
Next, they make food in large batches, thus reducing waste. This improves the utilization of everything from ingredients to energy.
Another way Chinese buffets reduce wastage is by using frozen food ingredients instead of fresh ones whenever they can. Frozen food lasts longer and can be bought in large quantities but used in small quantities as needed.
By excluding drinks from the price of the menu, Chinese buffets can earn extra from drinks ordered.
To maximize customer walk-ins, Chinese buffets use smart pricing strategies that entice people to try out the restaurant. Also, they are located at prime locations to get more visibility and require less advertising and promotion.
Finally, Chinese buffets employ small staff and rely heavily on automation to reduce labor costs and have higher profitability.