Best-of list · Industry Guide
How do bars make money? We break down pour costs, labour ratios, revenue streams, and the economics behind the bars that stay profitable long-term.
The short answer
8 ranked rooms follow. How we picked is at the end of this guide.
How do bars make money is a question with a deceptively simple answer — they charge more for drinks than those drinks cost to make — and a much more complicated reality. We have been inside the operations of enough bars to know that the ones still open after ten years are the ones that understood their economics from day one, and the ones that closed too soon are almost always the ones that did not. Here is what the numbers actually look like.
Pour cost is the ratio of the cost of ingredients to the selling price of a drink. A cocktail that costs $3 to make and sells for $15 has a pour cost of 20 percent. Most well-run cocktail bars target a pour cost between 18 and 24 percent. Craft beer on draught runs between 20 and 30 percent. Wine typically runs between 25 and 35 percent, depending on how the list is built.
The pour cost target is set not in isolation but in relation to the bar's other costs. A bar with low rent and low labour intensity can run a slightly higher pour cost and still be profitable. A bar in a high-rent city with a large staff needs pour cost at the lower end of the range or better. This is why the same cocktail can cost $14 in Cleveland and $22 in Manhattan — the drink economics are calibrated to the operating environment, not just to ingredient cost.
How we picked
The bars we recommend on this site are chosen for the quality of the experience. The ones that last long enough to become institutions also get the economics right. These are not separate standards — the financial discipline that keeps a bar open is the same discipline that keeps the quality consistent. The bar that controls its pour cost tracks its labour hours and manages its inventory is also the bar that can afford to pay its bartenders well, source good ingredients, and invest in the things guests notice.
Next time you pay $18 for a cocktail and think about whether it is worth it, consider that roughly $3.50 of that went on the ingredients, $6 on the person who made it, $2.70 on the rent of the seat you are sitting in, and about $2 on keeping the lights on. The remaining $3.80 is profit, if the bar is doing well. Most are not always doing that well. The ones that last are the ones that learned to manage all those numbers together. For a deeper look at how cocktail bars specifically structure their costs, menus, and pricing, our breakdown of the economics of running a cocktail bar covers the full picture.
James has spent fifteen years drinking in bars across four continents and has strong opinions about all of them. He writes about bar culture, economics, and the industry for several publications.
Last reviewed 2026-03-15 · The editors recheck hours and closures against current local coverage.