Presenting

FloristsReview.com 59 E ffective pricing is essential for the success of your florist business. By understanding your costs, the market and your customer base, you can develop a pricing strategy that maximizes profitability while meeting customer needs. Pricing flowers for retail sale involves careful consideration of various factors to ensure that you not only cover your costs but also make a profit, all while remaining competitive in your market. Be confident in your products and services, though, and price them to make a profit you need and desire. e floral design industry is based on luxury, so jump into that mindset and price your work accordingly. Furthermore, accept that not everyone who inquiries about your products and services will become a customer. Here are some key considerations for pricing your products and services. First, calculate the total wholesale cost of all materials used in each arrangement, including flowers and foliage, container, ribbon and any other decorative elements—as well as floral foam, flower food, tape, wire, enclosure card and envelope, card holder, packaging materials and all other supply items that go into the finished product. Also factor in overhead costs, such as rent, utilities, insurance and employee wages. Your emphasis on calculating the total cost of these items is crucial; it ensures that every aspect of your business expenses is considered and leads to a profit-generating pricing structure. Second is markup. Commonly, florists mark up their fresh products anywhere from 3x to 5x the wholesale cost. e markup on hard goods is typically 2x or 2.5x the wholesale cost, and the design labor fee is typically calculated as a percentage of the retail price of all materials used, often starting at 20 percent and going up from there depending on the complexity, labor intensity and artistry of the design. Your specific markups required for profitability can be affected, in part, by the volume of business your shop does as well by the type of flower business you operate, your reputation and renown, the demographics of your clientele, your location, your artistry and other factors. A common rule-of-thumb in the floral industry is to mark up fresh product 3.5x and hard goods 2.5x, with a labor charge of 25 percent. For example, an arrangement with a wholesale cost of flowers and foliage of $20, a hard- goods cost of $10 and a 25 percent labor charge would result in a retail price of $118.75. PRICING PRICING PROFIT PROFIT for $ $ $ $ $ $ $ $ $ $ TIPS AND STRATEGIES FOR ESTABLISHING RETAIL PRICING STRUCTURES THAT WILL ENSURE YOUR BUSINESS'S PROFITABILITY AND FINANCIAL STABILITY By Nita Robertson, AIFD, CFD

• Cover