1. Calculating the Wholesale Cost and Retail Price Estimate for Floral Design
Knowing the cost and charging the proper price ensures adequate profit for the business.

2. Background Discuss and Define the following terms Supplies Products
Added-Value
Consumer / Customer
Wholesale
Retail
Mark-Up
Profit
Costs of Production
Marketing / Advertising

3. Price Sheet
Using this price sheet will allow us to calculate the wholesale price that we paid to create the floral design.
Then we can add the mark-up value to charge the appropriate retail price to the customer, to ensure company profit.
To get started we need to gather our invoices that show what we paid for the items we included in the finished product.
We will also need our RECIPE that shows how much of each product that we used in the design.

4. Wholesale Cost
In order to know the correct retail price, we must first determine what the input costs were to create the finished product for sale.
What were the supply costs?
Flowers, foliage, filler, vase, accessories
What about labor costs? Delivery costs?
Think of this in a real world setting
Employees want to be paid!
Cost of vehicle, gas, insurance
The business costs: rent, electricity, etc.

5. Retail Price
Why do we mark-up the price of the floral materials and hard goods / supplies?
You have “Added-Value” to an agriculture product!
The value you added: skills in artistic design, making a finished product that is marketable and desirable to the consumer (your customer) You took the ingredients and made them worth MORE!
Would you rather buy flour, sugar, and eggs or a cake?
A business must make profit to pay the employees and provide an income to the owner.
An owner needs to have a home, a car, food, clothing, vacation activities, etc.

6. How much do we mark up fresh product?
Fresh products are marked up triple because there is more loss – some items are damaged upon arrival, don’t look just right, color can be wrong, stems can break, leftovers can’t be sold, etc.
Description of
Flowers & Foliage
# Stems Used
Price of
Bunch
Stems
per Bunch
per
Stem
Total Wholesale Cost of Stems
Retail Price
(after mark-up)
3 x price
Carnations 5
15.00 25
.60
3.00
9.00
Leather Leaf Fern 2 20

7. Total Wholesale Cost of Stems
Description of
Flowers & Foliage
# Stems Used
Stems
per Bunch
Price of
Bunch
per
Stem
Total Wholesale Cost of Stems
Retail Price
(after mark-up)
3 x price
Flower
Subtotal:
________
__________
Fresh Goods – flowers, foliage, filler, natural elements that can spoil fruit or vegetables for theme, plants, etc. These are items that have a short shelf life.

8. How much do we mark up hard goods?
We mark up hard goods double.
We still up-charge these items because we had to order them in bulk (large upfront cost) and we paid a delivery fee.
These are only marked up double (compared to triple for fresh) because if there are extra items, they can be used another time.
Some items are losses, if they are broken, or if they are for a holiday or theme that is no longer needed.
Description of
Hard Goods & Supplies
Quantity Used
Cost Per Case
Items Per Case
Cost per Item
Total Wholesale Cost of Items
Retail Price
(after mark-up)
2 x price
Bud vase 1
18.00 24
.75
1.50
Ribbon
1 yd.
5.00
50 yd.

9. Wholesale Cost – Hard Goods
Description of
Hard Goods & Supplies
Quantity Used
Items Per Case
Cost Per Case
Cost per Item
Total Wholesale Cost of Items
Retail Price
(after mark-up)
2 x price
Supply
Subtotal:
________
__________
Hard Goods – containers/vases, supplies, ribbon, foam, wood picks, preservative, candles, accessories, enclosure cards, wire, cardette, etc.

10. Other indirect costs…
Once you have calculated your subtotals (fresh product total and hard good total) then add those together to get your SUBTOTAL for the finished design.
Now – we add the other costs associated with the production process.
Taxes: charge state sales tax
Labor is calculated to cover the cost of paying an employee minimum wage.
In floral there are various options for this. One method calculate labor at $1 per minute for making the design. This is most effective with experienced designers, rather than new workers.

11. Now find the total prices!
Total Wholesale Costs
________
Total Retail Price
__________
Tax 7.25%
(Multiply Retail by .0725)
+_________
Labor Charge 25% (Multiply Retail by .25)
Delivery Charge 10%
(Multiply Retail by .10)
Grand Total:
(Sum of Retail, Labor, Tax, and Delivery)
$__________
Profit (retail – wholesale)
_________

12. You have now learned a skill!
Calculating wholesale and retail costs is a skill!
Learning the necessary processes of running a business is important for any job you have!
You should include this skill on your resume!
Include a work sample that demonstrates this business skill in your portfolio
Include a picture of a finished design, list the itemized wholesale cost, and create an invoice with the retail price

13. How can this apply to other agricultural businesses?
What are some costs for meat production?
Animal, feed, vet costs, kill fee, butchering, cut/wrap, housing, insurance, ???
How do we determine an appropriate price for the finished price?
What about a loaf of bread?
What about cheese?
What about plants from the greenhouse?
What about service products: your labor for landscaping, web design, journal / blog for a company????

14. Summary
Our class doesn’t charge accurate retail prices because we do not have accurate input costs.
As a public school, many of our costs are paid for through state or federal funding.
We do not have to pay our electricity, rent, insurance, etc. out of our class budget.
We have free labor! YOU!
We are not true professionals – we have not invested years or tuition for adequate advanced training
We are not trying to be a profitable business
We want to support our local businesses providing this service, not compete with them.