When it comes to floral design - don't just make it pretty, make it profitable. In 'Pricing for Profits," Joyce Mason-Monheim AIFD, AAF, PFCI, AzMF offers tips on building a strong foundation for your floral business by pricing professionally.
There’s no ‘one size fits all’ rules for numbers, percentages, or price categories. This isn't ‘what to charge,' it’s how to ‘calculate’ what 'you need to charge’ for the success of your business.
- Fixed price or Calculated price structures for pricing your designs.
- How to calculate Markups, Yearly costs, and Cost of Goods Sold
- Ways to estimate the price of future weddings despite rising costs.
- Menu designs to save money on how you buy and sell your products.
- Calculate the number of flowers needed for large event designs.
Using these practical tips, you create the pricing flexibility that works best for creating profits in your floral business.
When it comes to floral design - don't just make it pretty, make it profitable. In 'Pricing for Profits," Joyce Mason-Monheim AIFD, AAF, PFCI, AzMF offers tips on building a strong foundation for your floral business by pricing professionally.
There’s no ‘one size fits all’ rules for numbers, percentages, or price categories. This isn't ‘what to charge,' it’s how to ‘calculate’ what 'you need to charge’ for the success of your business.
- Fixed price or Calculated price structures for pricing your designs.
- How to calculate Markups, Yearly costs, and Cost of Goods Sold
- Ways to estimate the price of future weddings despite rising costs.
- Menu designs to save money on how you buy and sell your products.
- Calculate the number of flowers needed for large event designs.
Using these practical tips, you create the pricing flexibility that works best for creating profits in your floral business.
Joyce Mason-Monheim (00:06):
As a designer, we always want to make our designs pretty, but we have to remember that the most important thing for the success of our business is to make sure that we're making them profitable.
Sharon McGukin (00:23):
Welcome to How We Bloom, a podcast offering an Oasis of flower ideas. I'm your host, Sharon McGukin, AIFD, AAF, PFCI and I believe that every great success story starts with one simple idea. That's why we interview those who dare to do things differently. People who plant seeds, grow ideas, and bloom to their full potential. We listen, learn. And that's How We Bloom.
Sharon McGukin (00:59):
In today's episode of How We Bloom, we'll take an in-depth look at pricing. I know, it's not as much fun as talking about design. But, in many ways - for the success of your daily business, it's even more important than design. Professional pricing is the cornerstone of maintaining a successful business that can weather the ups and downs of fluctuating retail markets. The hard truth is that you cannot service your customers for long. If you aren't maintaining profitability in your business.
To discuss this topic, I’ve asked my friend and floral colleague, Joyce Mason-Monheim AIFD, AAF, PFCI, AzMF to join me today. We'll offer practical tips for doing the flower math necessary to achieve financial balance in your flower shop. Yes, she used a lot of our alphabet soup for all those initials, but she's worth it. Floral instructor. International designer. From Midwest farm girl to award-winning floral artist, this floral industry leading-educator has never outgrown her love of flowers or her understanding of the flower math it takes to run a successful floral business. Through the years, Joyce and I have shared the numbers side of doing business in classes, stage presentations, handouts, PowerPoints. Now we want to share this valuable information with you via the Floral Hub Blog and How We Bloom podcast. If it resonates with you, please share it with your friends.
Thank you for joining us. Joyce,
Joyce Mason-Monheim (02:41):
Thank you for asking me.
Sharon McGukin (02:44):
I also have to ask the audience for your patience today. I have a cold and Joyce's WIFI signal keeps going in and out. So, we will struggle a little through that, but no worries. The important information that we want to share with you today remains the same.
Professionally 'pricing for profits' is always a challenge. It varies with the circumstance of each individual business. Sometimes your pricing method can be influenced by a variable as simple as what your market will bear. Buildings need a firm foundation for continued stability. A strong business is the same. It must be supported by a stable system that controls operating expenses and creates profits. Take your profits out first, then make the remaining Cost of Goods Sold numbers work for your business. In this post-pandemic marketplace, retailers are met with many new challenges. Supply chain issues, rising material costs, higher fuel costs, flower shortages, and labor shortages. Just to mention a few.
Sharon McGukin (03:51):
Many businesses are trying to absorb much of the increased cost, but this practice cannot be sustained long-term without losing profit. Each successful business must calculate their true cost, establish their specific Cost of Goods Sold and develop a profit-and-loss sheet that acts as a guideline for balancing their business. Key to this process is the goal of professional 'pricing for profits.' Pricing differs according to how you service your customer. It's obvious that with the variety of ways a floral product can be delivered to the consumer, one set of one size fits all numbers, percentages, or price categories simply won't fit.
We're not here to tell you 'what to charge,' our job is to offer suggestions to you for how 'you' can calculate what 'you need to charge' based on your personalized retail experience. There are many ways a floral professional can sell to their customers as a traditional florist, studio florist, e-commerce florist, freelance designer, team design, or aspiring floral enthusiast. The way you deliver floral goods to your customer is one of the determining factors in your pricing structure. You create the pricing flexibility that works best for creating profits in your floral business.
Joyce Mason-Monheim (05:21):
Your pricing flexibility is also influenced by the overhead that you have for your business, the regional flower prices, and we all know that those are sky-high right now - along with your Costs of Goods Sold, even your local labor costs, employees, your team designs and the availability of materials and what you think your market will bear for your pricing. The Cost of Goods Sold includes a lot of things, and one of those is your overhead. That's like, your facility costs such as your mortgage or rent, taxes, utilities, repair, and marketing. There's also hardgoods - containers, floral foam, design accessories, mechanical aids, wire and adhesives, many different factors when it comes to hard goods. The fresh flowers and plants that you want to include in your designs, even like branches and mosses, and even labor - with staff wages, social security taxes, any benefits like insurance, gas or phone. All of that's included in your labor as far as cost of goods and then your profitability.
You have to make a profit. So, your profit needs to come out first and adjust the rest of the numbers to make it work within your budget, adapt your profits and the sheet statement to specify the cost of doing a good business, and evaluate. You have to evaluate that every month.
Sharon McGukin (06:43):
It's also important to take the time to evaluate your cost of doing business by each measure of time within your operation, calculate the yearly overhead costs for running your shop, then divide that number by twelve months, divide that number by four weeks. Now consider how many days per week do you operate your business? Seven days a week? Six? Some designers operate as few as two days a week from a studio. For example, divide the weekly average of cost. By the number of days you actively run your operation, then by the number of operating hours per each day, this allows you to understand the basic cost of running your business each year, month, week, day, or hour.
This bottom line information gives you a base number to work from when you're determining the number of designs, design staff, or other income streams needed to produce positive income in your floral business. How would you go about applying that, Joyce, to the numbers so that at the end of the day you know it requires this much design work to carry each hour of your business?
Joyce Mason-Monheim (08:01):
And we could do that by breaking down the productivity for each designer. And as a benchmark that we have for the industry, we say a designer can design one design for every fifteen minutes. So within an hour, we have four designs that are created. So basing that on your design price. And let's just say $75 is your average design that you sell. If you do four in an hour, that's $300. So, by the end of an eight-hour workday you should have productivity that is $2,400 worth of products created.
Sharon McGukin (08:38):
Running your numbers, and you have $4,800 worth of designs that need to be created each day. This tells you, you need to add another designer because you have the business to support that. As we discuss numbers, let me say - we're just using these as examples so that you can run the math, but you have to determine for yourself what the, the expense of your business is and how that plays into the averages that you use. That changes per shop. We're just using these numbers as a guidepost. So, you can do the math. But calculating the markups, Joyce, what do you recommend?
Joyce Mason-Monheim (09:19):
So, for the cost of goods and these markups your fresh flowers and your foliages should be anywhere from a three, even to a five-time markup on your cost. The original cost of the item, or your stem. Hard-goods should be anywhere from two to three-time markup. Plants, also a two to three-time markup. And with that, you must make sure that you include any of your handling fees that go with these flowers, like your delivery charges or your box charges or anything like that should also be included in your stem pricing.
Sharon McGukin (09:55):
Even simple things, like wrapping your flowers for seasonal weather, so they're protected. You can't just assume that's a part of the cost of the flowers, unless you've added that in specifically.
Joyce Mason-Monheim (10:11):
Another markup that you need to make sure that you add are your labor costs. And, labor costs again - all this is a variable depending upon your independent business. Which … labor costs usually run from 20 to 35% on a daily basis. If you're doing intense labor costs, then you may be looking at a 50% or even higher, depending upon what you're doing.
Sharon McGukin (10:35):
There's also the issue of times that you have a lot of overtime with employees, like holiday or funeral work. One thing I think that we should realize, is if it is just a holiday issue, then you may want to just raise the prices in that specific time period, as opposed to all year long. The other thing is to consider if you're having to pay overtime a lot, that may be a staffing issue. You may need to add a designer or re-evaluate how the responsibilities in the store are divided out. It may not be a pricing issue as much as it is an employee issue.
Sharon McGukin (11:23):
Are you wondering, who's partnering with me and bringing practical solutions to you. This podcast is brought to you by Smithers-Oasis North America (click for catalog). Why is Smithers-Oasis investing in your business? Helping you to meet challenge with change? Smithers-Oasis North America understands that you need fresh ideas to inspire new growth. Oasis carefully plants the seeds of your success by offering a balance of traditional and on-trend products that enhance your designs. Simply visit your wholesale supplier for your favorite Oasis products. Or, view the online selection of direct-delivered-to-you products and seasonal inspiration now available from oasisfloralproducts.com.While you're on the website, check out our blog. Scroll down to the featured post section and enjoy the collection of design tips and flower ideas for weddings, holidays, in-store, or online business, and lots more. After you enjoy each blog or podcast episode, please share them with your flower friends.
How do you actually calculate the pricing structure for labor?
Joyce Mason-Monheim (12:45):
To achieve your percentage of labor, let's use 35% labor charge. You want to calculate that by dividing the cost of by 0.65, which is the reciprocal of 35%. So, for an example, if we were to use $148.80 worth of product costs divided by 0.65, your actual retail selling price would be $228.90.
Sharon McGukin (13:15):
Can you go over with us the comparison of calculating price when you know how much the customer intends to spend, versus when you're adding up the materials to see what the aggregate cost is?
Joyce Mason-Monheim (13:28):
Oh, absolutely. So, this would be going by a fixed price to achieve your retail cost of a product at a fixed price. We'll use the example of $200. That's the selling price. So, if we had $200, we want to deduct the 35% labor charge. What you would do is multiply that $200 by 0.35, which equals $70. You deduct that from the $200 and the actual cost of product to use in your design is $130. That's the total fresh flowers and your hard goods included.
Sharon McGukin (14:08):
And that's very helpful when someone says to you, I want to spend $200 on this arrangement. By using the established fixed price method, you can subtract out to know how much is left for fresh and hard goods, correct?
Joyce Mason-Monheim (14:25):
Correct. And then from a design room standpoint, I would have that on a chart so that every design price that you sell already has the total amount of labor that you can deduct from that. And it just makes it easier for calculating on each and every design. So for a web design, then you probably have an established menu of each and everything that goes into that design. If there's any deviation from that menu, it needs to be documented so that we can keep a running tab of everything that's in that design. If it's a custom design, then you need to list all of those things, whether it's on the back of the order or on your order form in some way, so that you have every, everything that's listed, according to price and followed each and every time, it's important to make sure that you only put in what's required and not add any additional things to make it look pretty. Sometimes we like to do that and that doesn't work.
Sharon McGukin (15:27):
You also want to have that information available. So, if you get a customer complaint that perhaps the arrangement wasn't full value, you have the ability to pull that information and say,” Yes, this is the cost of the goods and this is full value.” The documentation helps you to resolve that customer service question.
Joyce Mason-Monheim (15:49):
When calculating price, the first way we talked about was using a fixed price pricing down from a set price, like the example of our customer, wanting to spend $200 and then deducting all of the cost of materials from the $200. The second way is pricing a design in what I call pricing up. Pricing up is where you start with all of your materials, your cost of goods, like fresh flowers, hard goods, all the things that are in the design and totaling up all those expenses. Then, adding a percentage of labor on the top to give you a total price. This way is done by using the reciprocal of your percentage of labor that you want to add. For example, if you want to add 35% labor to the cost of the materials in your design, you will use the reciprocal of 35%, which is 0.65. Then, you divide the total cost of all your materials. Divide it by 0.65 which then will give you the exact total price of the selling item.
Sharon McGukin (16:57):
Another thing we need to think about in terms of pricing is that a lot of times people, because they want it to be pretty, fail to stick to the menued designs, but that sets you up for failure later. Let's say that you do give extra stems because you do want it to be pretty, as people are going see it, and this is going to showcase your work well. That person doesn't realize you just gave them a lot of free flowers. So, the next time that they call to place an order and they fail to get the extras, they feel like they've been cheated. Instead of feeling like they got extra the first time, they feel like they’ve lost materials the second time. Also, if they quote the price to someone else and they call in an order and don't get the extra free flowers, they feel like they have been cheated of flowers too.
Sharon McGukin (17:49):
The truth of the matter is the first person was just given extra flowers. So, it's not only the profitability of that design, but it's the perception of your design. When you go into a jewelry store and you purchase a diamond bracelet, they don't hold that diamond bracelet up and say “it looks like.” They weigh the gold and the diamonds. They calculate the labor it takes the artisan to make the bracelet. They know what their overhead costs are, and they put a price on the bracelet. Then you want that product or you don't. We have to have that same concept in our flower shops. We can't give them flowers that they don't pay for just because we want to make it pretty.
Another major factor in profitability is controlling your cost of goods.
Joyce Mason-Monheim (18:39):
So, a good way to control your shrink or your cost of goods is to just pay attention to your product. So, your design room budget - you need to make sure that you don't order more than what you're actually using so you don't have any waste. You need to really pay attention to processing your flowers and making sure that your care and handling for them is done correctly. Using the proper tools and using the right professional products to make sure that your flowers are lasting long. You also need to pay attention to the rotation of that product. Use the older flowers first, so that they're not sitting in the cooler for a longer period of time and they've matured way beyond their use. Handling them with care and respect and writing it down the list of things that you do toss. That becomes part of your shrink control and your calculations so that you can use that towards actually figuring out what your shrink is. What percentage that is, and it should never ever be over 10%.
Sharon McGukin (19:44):
You know, when you mention rotating the product, Joyce, one of the things that I think is helpful here is dating the buckets. Just adding to the side of the buckets when the flowers came in so that you know, what the rotation should be. So, that you're using the flowers you've had longest. Or, if they're not fresh enough to use, simply moving them out of the cooler.
It's important to keep the wedding flowers separate from the everyday flowers. You cannot donate any flowers to the wedding flowers, but you also can't take from those wedding flowers. They've paid for that bulk amount of flowers, and those flowers need to be specifically for the wedding.
When it comes to everyday flowers - you know the cost of the individual flowers and what you can use. Another thing I think is very helpful. If you have a walk-in cooler where people come in and select flowers that they're going to design for themselves, I always think it's a good idea to put your color harmonies together in the buckets of flowers.
Sharon McGukin (20:45):
When they choose from each different collection, they're going to come out with a pretty arrangement every time. Because, you've put in filler flowers and form flowers, mass flowers and line flowers. You've mixed the color harmony so that it's going to be pleasing regardless of what arrangement they're making. Rotating those buckets so you know which is fresh and when they need to be taken from the cooler. Putting them into color collections, you can add to the value of your flowers.
Now speaking of shrink, at what point do you request a credit? You're marking down the materials that come in that are not as fresh, or will not last long enough, or perhaps they're broken heads. You're making a list of that product, so that you can turn in a shrinkage chart to your accountant to know what you paid for that you really haven't been able to sell. But, at what point do you ask for a credit from your supplier?
Joyce Mason-Monheim (21:43):
You're always going to have some type of breakage or damage when you're delivering and shipping product. If it's minimal, sometimes just incorporating a little bit of a percentage into your stem pricing to compensate for that is great. If there's major damage to the bunches that you're receiving, then that's when you need to talk to your supplier so that you can get a different product in your product mix.
Sharon McGukin (22:10):
I also think it's exceptionally important that you be really honest about this. When you do need a credit, you want that credit. So, you want to have the relationship with your salesperson that they know if you ask for a credit, it was really needed. If you continually lose money on products that aren't good and won't hold up, then maybe you need to change your supply house. You may need to look at a different means of purchasing your flowers. But, you should be so honest about the credits that if you call and ask for one there's no question. It's also very important for them to be able to say to you, “I know you asked for this product, but it's not really great. Let's choose another one.”
Sharon McGukin (22:54):
We've talked about pricing for everyday work, but we now have a challenge that we haven't had to deal with as strongly in the past. That is - how do you price for a wedding today that is next year, in the face of escalating prices, flower shortages, and the difficulty of procuring exactly what you want for your wedding flowers. A florist asked me “What do I say to my brides?” I said, you say to them “Let's just be thankful we can have a wedding this year. Because, we couldn't have it last year. And let's just be flexible with the flowers. I promise you fresh flowers, that are beautifully arranged, that complement the color harmony of your wedding. But, that's about as much as I can promise. I can't promise specific flowers. I can't promise specific colors. And, I certainly can't promise specific prices this far out.”
Joyce Mason-Monheim (23:53):
I think also suggesting seasonal flowers really keeps it in the palettes that you're looking for in that particular event. So, if it's a fall wedding, then you can suggest doing the seasonal flowers for fall, which are usually fall colors.
Sharon McGukin (24:08):
And usually the dresses for the wedding are in seasonal colors. So, when you use seasonal flowers, it just mixes perfectly. One big trend for this year - because individuality and personalized traditions are very important to the post pandemic wedding couple, one of the looks is to have different bouquets for the bridesmaid. We've done this in the past and we're back to that again. That can be very helpful. If you use a collection of flowers for the wedding itself, then the bouquets could be a mass of each one of one type of flower. One of the techniques a lot of florists are relying on now that they're having to project pricing into an unknown for the coming year, is using a general pricing structure. Agreeing to a price range very much like the color harmony is a range of colors. The price is a range of prices. Offer the highest price and the lowest price you think possible. Agree within that range of an estimate and then accept the deposit to hold the day.
Sharon McGukin (25:16):
Based on that fluctuating price range, set the date for your ‘confirm details and pay balance’ consultation. One to three months in advance, whichever you're most comfortable with. When they meet with you, agree specifically on the flowers, on the fluctuating price, and they pay for the wedding. So for example, let's say it was a $5,000 wedding, but flowers are projected to possibly go up another 30%. There could be an additional $150. This gives them the price range they're comfortable with, but it allows you to go back to the $5,000, if that works and move forward to the $5150, if needed.
Joyce Mason-Monheim (26:02):
I think something else that we have to keep in mind too, is that if the bride or the, the wedding party specifically will wants a certain type of flower, there may be an additional charge. So, keeping in mind what's even available number one, but also that it may be at a higher price too. That's where that flexibility in pricing will help with that adjustment. The biggest key is communication with your or bride in groom and making sure that any changes that you have - any price increase or even deductions that you have, then you need to talk to them about it and let them know what is happening.
Sharon McGukin (26:41):
I think when you're working with a wedding couple, there are options that you can suggest. If the flowers are at a higher price, they've been well informed and they're prepared. But, if it's at a lower price, we either can lower to that amount that we have agreed upon or ask “Would you like to add more flowers into the designs in high profile spots? Would you like to upgrade primary items like bouquets or altar arrangements?”
This gives me the flexibility to get the most valuable flowers I can, as close to what we would like to have as possible, but make substitutions in the flower mix, if needed. If I need to meet a specific price, I can use a lesser number of flowers resulting in smaller arrangements.” They have the opportunity to say “Yes, we'll have more flowers if the price is low, but we will have less flowers if the price is high” or “The price is not the breaking factor here, this is what I want, and just charge me professionally. When the flowers arrive, it all comes down to creativity. How can you fulfill the request they've given you?
Sharon McGukin (27:41):
At Smithers-Oasis North America, we like to share practical solutions that can help your business bloom. In each podcast, we give a ‘Sharon’s Shout-out’ to someone who has recently shared something useful today. I want to give a shout-out to Leanne Kessler AIFD, PFCI of Floral Design Institute in Portland, Oregon. After editing this Pricing for Profits podcast, I noticed online that Leanne had shared a list of pricing information on Florists of Facebook.
As Joyce and I stated in our podcast, there are numerous ways to accomplish professional pricing tailored to meet your floral business needs. We want to offer you as many options as possible. So I gave lean a quick call and ask if I can include her list of suggestions in the show notes of this episode, always ready to help a fellow Florist, Leanne agreed. Thanks Leanne! If you have a shout-out you would recommend or a guest you would like to hear on our podcast, please DM Sharon McGukin. That's M-c-G-u-k-i-n. Or, send me an email at sharonmcgukin@gmail.com.
Sharon McGukin (29:12):
Let's talk about the contract. Do we need to add a clause in the contract to allow for variability? Look at the things that could change that perhaps you need to add into the written contract - fuel charge, flowers, hard goods, labors, rising costs? I think the most important thing you just said, Joyce is making sure that you have communicated with them the possibilities and together create a plan for how you'll answer those questions.
Now, a question I get very, very often is how do you estimate flowers needed for a large design installation? I can't tell you how many times I have been asked that question. I find the best way to do it is calculate the number of square feet in the design. Determine the variety of flowers to be used in that design. Calculate the number of each flower needed for a square foot of that design, multiply the sum of each flower by the number of square feet.
Sharon McGukin (30:10):
For example, if it's all roses, how many roses will fit in that one square foot? And then, how many square feet will be in the overall installation. But let's say it’s some mix of flowers, hydrangea, carnations, and roses. Then, you've got to calculate in that square foot. I have three roses. I have five carnations. I have one hydrangea. So how many hydrangea? One per the total number of square feet. How many roses? Three per the overall number of square feet. Simply using the mix of flowers and doing the math.
If it's an upscale budget, add flowers to it. If it's a lesser budget, use less flowers and more cost effective foliage. That doesn't mean the high profile foliages we love to work with, but a cost effective one. If it's a tight budget, you may even let some of your wire form show for an industrial effect, determine what product you'll use. What does it take to take up a lot of space? Hydrangea, a mass of carnations? Mums? You know, Joyce, one of our ‘go-tos’ for all of our years has been mums. You fill in with mums for cost effectiveness. Now what's happened there?
Joyce Mason-Monheim (31:25):
Not as cost effective as they used to be.
Sharon McGukin (31:28):
Or, even as available.
Joyce Mason-Monheim (31:30):
That's true. So, you have to kind-of do with what's available.
Sharon McGukin (31:32):
You also have to think about what the environment for the flowers will be. Hydrangea are beautiful. They fill up space, but they can be pretty quick to go down in heat. So, you want to look at what's going to last based on the environment the design will be placed in. And is there a water source? What holds up well, if there's not.
Joyce Mason-Monheim (31:55):
I think knowing the performance of the product is very important. So know ahead of time, what you're working with and how it is going to perform whether in water or out of water so that you can have an effective design at the end.
Sharon McGukin (32:08):
One of the things I've seen people do successfully through the flower shortages this year, is mixing dried flowers, fresh foliage, or realistic silks as a base. This also keeps the design from being so heavy. Then, coming atop the design with a mix of materials that can be added at the wedding site. With the flowers in a water source like a floral cage that's been attached to the installation piece or trays or something of that nature. Or, mixing the materials with painted foliages or painted drieds or different materials that can come together to meet the price that you're actually looking for. And, are easy to manage so that the weight of the design is not so intense. Diminishing the possibility that the fresh flowers will go down.
Something that I see people doing that really has me questioning the wisdom of it, is using fresh flowers but just sticking them into an installation. And, they're not in water. Then when the consumer sees that that the design doesn't hold up, they're not saying, oh, this designer’s flowers don't hold up because they didn't use a water source. They're saying - flowers, don't hold up. And, I think that's bad for the industry. I think that leaves a bad impression for the flower buyer.
Joyce Mason-Monheim (33:27):
I agree with you. I think it's important that flowers are given a water source so they can thrive and survive through the whole event.
Sharon McGukin (33:36):
It might be a water source, like a floral mechanic that is attached to the form. Different sizes for different purposes. A raquette in a certain place, cable-tied to an arbor for example. It may be the perfect size and can achieve that flower hydration we talked about. But, you've got to go back and factor the cost of that product and the cost of the labor. The more labor intensive it is, the more it eats into your profit. So, quick and easy water-source mechanics can help save time and money.
If you have not accommodated that, sometimes it can be a little intimidating when you start looking at the numbers. But in reality, if we are creative, there are things that we can do. We've covered a lot of material in terms of how to calculate price and how to keep track of what's happening in your business.
With the supply chain issues that we have this year, we're really having to meet challenge with change. And, that gives us new opportunities. What are some things that you think we can do, Joyce, to keep the prices down for our customer?
Joyce Mason-Monheim (34:39):
Well, with any of the increase in prices, I think it's really important that we have to buy volume. So buying in bulk, as much as you possibly can, of course, will lower the prices for you knowing what you need in advance. So for example, needing things for next spring - if you know you they're available right now and you have the storage area, then buy it now in store it so that you’ll have it for like Valentine’s Day or for next spring, when you have events for that.
Another thing that you need to pay attention to from an everyday retail standpoint is sell from the cooler, sell what you have. As long as you don't have to buy something else in order to cover your orders or sell exact things - be less specific and more generic when it comes to seasonal products. Use creativity in using all these different things instead of being specific with a certain design. Selling color collections, just like the events in the weddings that we do. This can be minimized and used on an everyday basis. So that you have just selected materials that are available to you right now, and fresh flowers that are also available to you right now that are non-specific
Sharon McGukin (35:51):
The most important factor is that you be creative. And, that's something that comes naturally to us in the flower business. We are creative, but we need to apply that creativity to our numbers, as well as our processes. Now, one thing that I like to suggest to flower shops when they're trying to get a handle on their costs is to menu their designs. Let's say that you do a different collection each season. 80% of your sales comes from 20% of your customers. That 20% gives gifts to 20% of the people they know. So, it really comes down to a small turnaround in terms of orders and who they're delivered to. Keep them interested by giving them something different each season. I think it's a good idea to plan for the year, how you will menu the designs based on seasonality. Let's just say that for the spring, we want to do glass containers. We want to leave some of our tulips, daffodils and such in their bulbs.
Sharon McGukin (36:52):
We add bulb blooms in with our cut arrangements. We want to set a different diversity of price from a less expensive to more expensive, so we cover each wallet. We want to use glass vases. It gives us that feeling of spring. This plan allows us to photograph those designs in advance, menu our prices, know specifically what goes into each arrangement, and gives us marketing materials to use on social media for our glass faces. Then, we move into summer. Let's decide that we want to use more green plants mixed in with our cut flowers. And, perhaps for summer, we want to use baskets. And so now we have a totally different look from our glass vase collection of spring. We're move forward into fall. Let's say we want to use pottery or ceramic types of containers to give us look of fall. And we want to pull in more branches, leaves, berries and things of that nature.
Sharon McGukin (37:52):
Then, let's move on to Christmas. Suppose we want to use tin containers or metal containers. Things that give us a Christmas appeal and pull in the colors of the season. Now for the year, we've offered four different collections. A person can in fact give a gift of flowers to the same person four times, and they got a different product each time. This helps us to buy in bulk the containers know in advance we’ll need. How to prepare for social media with photographs that we've taken of our collection. As we are creating the collection we can formulate our pricing and such. We can use seasonal materials that are available from our wholesalers and operate off best-cost product. And, we're providing a diversity of looks. I think that if you're not ‘menuing’ designs right now and working with seasonal flowers, that could be your first step.
Sharon McGukin (38:48):
Speaking of taking first steps, let's recap some ideas Joyce shared with us. Working through flower shortages and price increases, buying bulk to get volume pricing, calculating what you will need for upcoming events and future high sales periods - such as Valentine's day, spring holidays, or wedding season. If you have the space to buy and store those materials, buy them now, sell from the cooler with an emphasis on seasonal flowers. They're often more readily available and better priced than specialty flowers or imports that are in high demand. Menu your designs for cost effectiveness. Don't just make it pretty, make it profitable!
I think that's fantastic, Joyce. Thank you so much for helping us to understand the basics of pricing for profits. When we price professionally, we've build a great foundation for our business. I appreciate your input.
Joyce Mason-Monheim (39:54):
I hope I provided a lot of information for those needing help. Remember, when you hear something, you often forget it. When you see something, you may remember it. But it's not until you do something that you will understand it. We all want to succeed in our businesses and profitability is the number one key to achieve that.
Sharon McGukin (40:15):
In closing, Smithers-Oasis North America and I want to thank Joyce Mason-Monheim and you for joining us today. If you've enjoyed this episode, please share it with a friend and be sure to hit subscribe. You don't want to miss the inspired solutions our upcoming guests will share with you for your business growth.
Until next time, I'm Sharon McGukin, reminding you that like the unfurling petals of a flower, we grow by changing form. Soaking up inspiration like raindrops. Absorbing energy from others, like warmth from the sun. This growth opens us up to new ideas and that's How We Bloom.