1. Pricing Strategies in floral design

2. Intro The objective of any retail floral shop is to make money
Determining the right price is difficult
Prices too high = customer loss
Prices to low = no profit

3. STEP ONE: Determining the unit cost of goods
It is necessary to determine the cost of every item used
Almost all hard goods are sold in bulk amounts
Florists use these by the piece or unit
The total coast of these goods needs to be broken
This is easily done by dividing the total cost by the number of units enclosed
ALWAYS round up any fraction of a number

4. EXAMPLES: Corsage Ribbon $4.00 per 100 yard roll
Cost/# of yards per roll = price per yard
$4.00/100 yards = $.04 per yard
Unit price x amount needed = wholesale cost
$.04 x 2 yards needed = $0.08 whole sale cost
YOU TRY
Floral Container $22.50 per box (24 pieces/box)
Cost/# of pieces = price per piece
WHAT IS THE UNIT PRICE?
What is the whole sale cost if you need 2?
Leatherleaf Fern $1.69 per bundle (25 stems/bundle)
Cost/# of stems = price per stem
What is the wholesale cost if you need 5 stems?

5. STEP TWO: Standard Ratio Markup Pricing
This method is frequently used by retail floral shops
Easiest method of pricing
Flexible system which operates by determining the wholesale cost of an item and then multiplying it, or marking up, that cost by a number from 2 – 4 or more to cover costs
Non perishable items (x2)
Perishable (x4)
Basic Arrangement (x3)

6. Examples
You are making an arrangement for a customer! Here is a list of everything you will need to make this arrangement!
Floral Foam $32.00/case (48 blocks)
Container $18.00/case (12 containers)
Carnations $6.25/bunch (25 stems)
Leatherleaf Fern $1.69/bunch (25 stems)
Enclosure Card $.75/pack (50 cards)
Using the sample wholesale price list given below, calculate the whole sale cost of materials

7. Examples
Now that we have the unit price we can determine the wholesale cost depending on the amount of each needed
ITEM UNIT PRICE WHOLESALE COST
1/3 Floral Foam $.67/block 1 Container $1.50/container
9 Carnations $.25/stem
12 Leatherleaf Fern $.07/stem
1 Enclosure Card $.02/card

8. Examples
Now that we have the wholesale cost of each item in the needed amount determine the total wholesale cost
ITEM UNIT PRICE WHOLESALE COST
1/3 Floral Foam $.67/block $ Container $1.50/container $1.50
9 Carnations $.25/stem $2.25
12 Leatherleaf $.07/stem $.84
1 Enclosure Card $.02/card $.02
TOTAL:

9. Examples
Now that we have the wholesale cost of each item in the needed amount determine the total wholesale cost
ITEM UNIT PRICE WHOLESALE COST
1/3 Floral Foam $.67/block $ Container $1.50/container $1.50
9 Carnations $.25/stem $2.25
12 Leatherleaf $.07/stem $.84
1 Enclosure Card $.02/card $.02
TOTAL: $4.84

10. Examples
Now that we have the total wholesale cost we can use the Standard Ratio Markup method to price our product!
It is considered a basic arrangement so we will markup x3
Cost of basic arrangement x markup # = retail price
$4.84 x = $14.52

11. STEP THREE: Retail cost of goods plus labor
You not only charge the customer for the cost of goods, but you must also charge them for the labor
This is the last step in determining your product’s price
The retail cost of goods + labor involves calculating the retail value of each part of the arrangement using the ratio markup method then adding a percentage for labor

12. STEP THREE: Retail cost of goods plus labor
A range of percentages may be used depending on amount of labor and/or expertise required to make the design
Higher % wedding bouquet
Lower %  bud vase
A figure of 30% labor is commonly used by florists

13. EXAMPLE STEP 2: Determining retail price using Markup Ratio
Using the same example order as before…
REVIEW THE ORDER AND STEPS 1&2
STEP 1: Determining wholesale cost
ITEM UNIT PRICE WHOLESALE COST
1/3 Floral Foam $.67/block $ Container $1.50/container $1.50
9 Carnations $.25/stem $2.25
12 Leatherleaf $.07/stem $.84
1 Enclosure Card $.02/card $.02
TOTAL: $4.84
STEP 2: Determining retail price using Markup Ratio
Cost of basic arrangement x markup # = retail price
$4.84 x = $14.52

14. EXAMPLE
Now complete the last step (step 3), adding the cost of labor to determine the price for this order!
Use a 30% labor fee
Cost of basic arrangement x markup # = retail price
$4.84 x = $14.52 retail price
This is a 2 part process… part one is determining the labor fee using the percentage! Use the equation below to determine the fee
Retail price x labor percentage = labor fee
__________ x ______________ = ________

15. EXAMPLE
Now complete the last step (step 3), adding the cost of labor to determine the price for this order!
Use a 30% labor fee
Cost of basic arrangement x markup # = retail price
$4.84 x = $14.52 retail price
This is a 2 part process… part one is determining the labor fee using the percentage! Use the equation below to determine the fee
Retail price x labor percentage = labor fee
x = $4.36

16. EXAMPLE
Now complete the last step (step 3), adding the cost of labor to determine the price for this order!
Use a 30% labor fee
Cost of basic arrangement x markup # = retail price
$4.84 x = $14.52 retail price
This is a 2 part process… part two is adding the determined fee to the retail price to determine the final price you will charge for this order
Retail price + labor fee = price charged
__________ + ____________ = _________________

17. EXAMPLE
Now complete the last step (step 3), adding the cost of labor to determine the price for this order!
Use a 30% labor fee
Cost of basic arrangement x markup # = retail price
$4.84 x = $14.52 retail price
This is a 2 part process… part two is adding the determined fee to the retail price to determine the final price you will charge for this order
Retail price + labor fee = price charged
$ $ = $18.88, or $19.00