Take a random 10hr shift. Let’s say you get an 80% markup on your coffee, so while you charge $1.00 for it, you only paid .20c for actual coffee, and make .80c per cup. On a regular 10hr shift, you sell 200 cups of coffee which means you made $200 in revenue and $160 in profit. Well, not exactly. You pay your barista $11/hour, so now you actually made $49 in profit.

Now imagine you only mark it up 50% (.40c). You sell the same amount over the same shift. You’ve now made $80 in revenue and are already not making a profit because of payroll alone. And this isn’t including rent, utilities, supplies, etc you also have to pay. This is obviously extremely simplified but the point is that you have to make enough from the goods being sold to cover all expenses, not just enough to replace the goods. Coffee shops are not pulling 80% of revenue as profit; in reality, it’s probably more like 3-7% at best