Say I want to be the beer vendor for our local farm club.
I go to the business manager and put in a bid.
My bid guarantees the club x percent of profits on X number of cases of beer per game, with additional cases sold if they make the playoffs.
Naturally the club accepts the highest bid, guaranteeing the best profit for the club.
If I'm the winning bidder, I have to price my beer so I can pay the guaranteed profit and make something for myself.
I have to remember I have only about 80 (?) home games that season to fulfill my contract. In those 80 days I have to pay for the product, the club, any insurance I'm required to carry, my employees and then myself.
That's the way it worked for a buddy of mine.
He lost a small amount on his concession business, but made enough business contacts that his vending business grew.
It's a cut throat business.
Oddly enough, concessions are usually a ball parks money maker.
Same way that theaters maybe break even on ticket sales but make money on concessions.
Plus it's a captive audience.
You can't take anything in so you have to buy from the vendors.