Part 12. The price is right
When you are first starting out, it can be very intimidating to think of how to start, and when you finally make something that naturally leads to a query of "is that for sale?" it can be very tempting to give them a price that is considered "emotional". It feels something like: "I think they will reject the true price, which I am not really sure of and surely can't be much, so I will give them a price I assume they will take".
The reality is, this is not pricing for sustainability or profit.
Therefore, pricing your flowers comes down to a few simple things. Bear in mind, these are my takes on how to price, and it is your job to take what works from this advice and toss what doesn't.
For a direct retail client of a product:
- How much did you pay for your materials? Never buy retail, this is pointless. Wholesale purchases for value added goods belong in your Cost of Goods Sold category, a business expense. Florists can't just buy 5 peonies, 2 daffodils, etc., they have to buy the bunch for the project. This applies to your paper. Is it one fold, ten folds? Each project gets fresh supplies.
- How much did you pay for your hard goods? Hard goods are things like the vase you put it in. I purchase high-end hard goods wholesale, and the industry standard is to mark up the wholesale price by 2x, 3x or 4x, depending on your location. Manhattan is not Dixfield. Know your market.
- How much is shipping and handling? Handling has a cost. It is the time it takes to pack that object up properly and with the correct materials.
- How much time do you need to do the job? I no longer think in hours. I think in half days and whole days, and I know my 2020 rate is $50 an hour after years of working as a professional. I also have an art degree. So, a half day minimum quote of just my time is $250. This allows me to actually work. At minimum, your rate should be based on the minimum wage where you live, with your experience and education adding to that.
For a wholesale client:
- All of the above! If they would like 15 peonies for sale in their gift shop, price accordingly. This is not the same as a commission of a sale. This is they own the products outright, up front, with a check made out to your business. I find this model hard to sustain, because I am not a flower factory, however I did sell wholesale to a high-end giftshop when I first began.
For Etsy or online sales:
- Above plus add the cost of listing fees or website fees.
For formal courses:
- My trick here is to use the above formula and apply to the intended outcome for retail cost. As an example, my Festiva Maxima peony course is $45 and the stem alone should retail for that.
For sales with commission:
- Galleries and artisan stores take a commission. Once this is established, factor it in the the price of the item. Also, the item needs to be absolutely as archival as possible, which can require more expensive materials.
For in-person teaching hosted by another business or brand:
- I charge $75 an hour inclusive (no mileage or meals) within an hour radius, and require additional support (mileage, meals, lodging) if the venue is far away. I can charge this rate because of my education, my experience, and my low desire to teach in-person due to the energy and time involved.
- In order to effectively charge for teaching, you have to know the cost of supplies, the time it takes to prepare the supplies, the time it takes the prepare the curriculum, set up, clean up, venue rental, and so on.
- When a venue is really amazing and I want to work with them, I certainly wiggle on my fees, however this is my choice, not theirs.
- If you can't make money teaching in person, say no.
- If you don't know if you can make money teaching in person, say no.
- Take the time to design a workshop and price it out to see if you can actually do it with a profit margin. Calculate each and every cost. At the end of the day you need money in the bank for it to work.
For events or workshops hosted by your own brand:
- You must carefully calculate each logistical piece of a workshop or event. This includes time to prepare the educational materials, supplies, marketing materials, plus the marketing expenses, editing expenses for reviewing advertising and text-based ancillaries, plus venue rental, plus refreshments, plus clean up and the follow up feedback loop and the time it takes to synthesize that data. Add 20% to this and then figure out the cost per person, understanding that teaching a small group maxes out at about 18 and after that you need more support, like an assistant. Once you have this cost figured out (it depends on how many people you can fit in the group), now you have an idea of a potential profit margin depending on your pricing.
- You can ask for corporate sponsors for these types of events, provided you can give them some expected outcomes from their participation.
As you can see, emotionally pricing anything is a huge pitfall. You truly must take the time to calculate every cost. Then and only then can you price your product or service. At the end of the day, profit is earned through due diligence, and paying very close attention to every detail, cost, and emotional toll that is paid for the work you are doing.
Don't guess, develop the feel for it! Look at other people's work and how it is priced, look at their location and aesthetic, look at everyone's work. This is called a market survey. It gives you a snapshot of what is out there, and you do the rest.
Now it is time to make your business cards. (It’s never the first step.) I have a referral link for Moo that gives you twenty percent off your first order. Go for the square cards, they are so fun!
However we aren't done!