Florist Pricing: 3 ways to cover your wholesale flower shipping costs
Florist pricing is key to a profitable business. How much you markup your flowers determines your profit margin.
The cost of shipping wholesale flowers can vary greatly, so it’s important to have a plan in place that covers those costs. Otherwise, you may not generate enough profit and may be out of business rather quickly.
An EveryStem member wrote to me recently with a question: “How do florists account for shipping costs associated with flower orders?”
Florist pricing is challenging and with price fluctuations it can get complicated. Even though times are tough, you can take action!
So, I am sharing 3 practical ways to cover your wholesale flower shipping costs. Let’s dig in!
Flower pricing can feel cumbersome, but it doesn’t have to be that way! Flower Math allows you to simplify your floral design prices and leave room for a healthy profit margin in your business.
You have two options when it comes to covering these variable costs. You can account for the costs of wholesale flower shipping per event or per stem.
My advice is to consider a few thing about your business first and then decide.
Do you frequently order flowers with high shipping costs or do you have the luxury of buying local?
Do you want to keep your pricing simple or do you prefer a more methodical process?
Do you have a system that helps you price and accurately order your wholesale flowers?
Once you’ve answered these questions, you can determine which of the 3 options for covering shipping costs works best for your business.
Here’s Florist Pricing Option #1: Use your markup to cover the costs of shipping
Include shipping costs in your retail markup for every floral design you sell.
Many florists markup their flowers 3, 4, or 5x. The markup takes the cost of the flowers and multiplies it up to the retail price. The difference between your cost and your retail price should include the cost of all your expenses, consumables like floral tape, and allow room for a healthy profit.
Florists with higher overall costs typically use higher markups to cover those costs and ensure a healthy profit.
For example. Let’s say you have a flower that is $2 a stem. If you use a 4x markup that flower at retail is $8 and a 5x markup is $10 for that same flower.
The cost of shipping, processing, tape, electricity, marketing, labor, working with the client, all your expenses may add up to around $2 or $3 for each flower. Then, the remainder of that retail price is your profit. So, the $2 cost, $3 expenses, plus $3 profit totals your $8 retail price for that flower using a 4x markup.
So with this in mind, you can adjust your markup for each event in EveryStem using the Event Details button. If you are ordering lots of local flowers and don’t need as much cost allocated to shipping you may want to use a 4x markup, but if you are ordering lots of flowers from multiple suppliers that will add up to high shipping costs, then a 5x markup maybe more appropriate.
This is the most common way that designers allocate for these costs, because you do not have to change the price of each flower based on the cost of shipping.
It’s simple, straightforward and it works. Your client benefits by receiving an invoice with all inclusive pricing and you can easily communicate that to them in your contract and marketing collateral.
Here’s Florist Pricing Option #2: Add a Line Item
Include shipping costs in a separate line item. You can do this in the EveryStem software program using the Fee Calculator.
Depending on how you invoice your clients you can add fees on top of the prices of your designs. This option works well for our EveryStem members who share only the top line price with their clients and those who share an itemized invoice. However, if you share an itemized invoice you can add a line item for this at the bottom or bundle it into a service fee line item.
In this case you may charge a 3x, 4x, or 5x markup, but then add the cost of the shipping and processing as a service fee.
Use a description in your line item called Labor Fee or Serivce Fee: Your flowers are carefully sourced and processed with love.
The underlined sentence is the piece I think that is relevant here. You can charge for shipping costs in a line item labor or service fee with a note like this. “all of your flowers are sourced and processed the week of your event” and you can choose to use a percentage of the total retail price of the order or a flat dollar amount.
This benefits your client because it’s transparent and you can communicate your floral design products and client services clearly by using line items. If you only share a top line price with your clients you can still communicate all the value, care, and costs that go into the creation of their designs, including shipping!
Here’s Florist Pricing Option #3: Raise Costs
The last option is different than the first two because it accounts for shipping costs per stem rather than per design or event.
You’ll average out the cost of shipping per stem and add that fee to the cost of each flower. If you are using EveryStem florist software the best time to do this step is when you create new flowers in your library.
Since most shipping costs aren’t calculated until right before the delivery, I suggest going with an average of your last 5 invoices and adding the same percentage shipping cost to each flower.
This method can get complicated and requires a close eye over shipping costs per stem even when you average them out.
I personally like option 1 and 2 more because they are easier to implement and can be adjusted per event or design, rather than per flower.
So, which florist pricing method do you like best to cover the shipping costs of your wholesale flower orders?
The EveryStem member who asked the original question that prompted this post said, “Thank you for the excellent ideas. I think that #1 sounds like the best fit. Bumping up my markup is perfect for my business at this stage. Thanks for the permission to not have to track these shipping costs granularly.”
You can bump up your markup too! It’s fair to you and to your clients because you need to make a healthy profit to stay in business!
Cheers to you running a profitable business. Until next time.
LuAnn