# Pricing strategy in retail florists

The business results are judged to be as follows:

The selling price of sold goods is equal to gross profit

All costs are paid with gross profits. If you find that your gross profit is not enough to reimburse the costs, you have two options or increase your gross profit by selling the sold goods or reducing the value of the goods sold or reducing your costs. Of course, this is far beyond simplification, and the art of business management is one of the hundreds of shades of the two options. For this article, let's say that we have carefully upgraded your costs and take care with your shopping habits. Therefore, consider the pricing end of the equation.

Determining your pricing can be one of the most important driving decisions made by the owner or manager of a retail florist. There is a huge amount of work on a florist's shop, it would be no shame that they will sell their products at a price and they will not be able to finish? On the other hand, it will begin to be disastrous before it comes out of pricing and leaving the market. Market conditions and competition largely determine your pricing. However, remember that depending on whether these items, without analyzing the actual costs of the products sold, can cause loose tees. Pricing strategy can be a complicated thing in a retail florist. This is because there are perishable items, and skilled labor must be taken into account along with the raw cost of the goods.

Consider these factors individually. Let's start with the cost of goods sold (COGS), because these are the three simplest. The cost of goods sold is the price paid for the goods sold and the total cost of buying and holding the product as long as it is sold. If you bought widgets and purchased a widget for $ 3, the COGS would be $ 3. In a florist you must add the cost of your fresh flower pot or any other product that you need to add to the flowers to be sold. In the case of an agreement, the price of the goods includes flowers, containers, preservatives and tapes or accessories.

Secondly, perishable items may cause a certain amount of shrinkage or loss of product. Take the time to analyze the amount of product released. You buy every single 100 dollar worth of fresh flowers, you will have to pay about 5% for the shipment and for normal damage. You also need to find a loss-making factor in your store. For example, suppose this example loses 10% of fresh flowers because they will not be disposed of before they become outdated or because they are wasted or broken in the store.

Now let's look at a fresh flower arrangement. We use some industry standards as a jumper for price determination.

Fresh Flowers: When flowers are $ 10 for wholesale, you need to add $ 1.50 for shrinkage, 0.1% for preservatives. Sprinkle twice to get the retail price of flowers: $ 23.20

Container: The vase will cost $ 2. Narrow two for the retail price: $ 4.00

Plays a bird, a bow, and a butterfly that costs $ 3.00, so the retail price for these products is $ 6.00. This provides a total retail price of $ 30.20. We're not done yet.

Third, consider the cost of skilled labor that was used to create the agreement. View your business plan and calculate labor costs as a percentage of total sales. Suppose your labor costs 12% of total sales. You must add this workforce to each item you want to sell. If you want to sell the items of gift items without having to work, you will probably need to do a little more analysis to take into account the design cost of labor than all the total sales. This figure is likely to be over 20% -25%. Let's go for this example by 25%.

Now math gets a bit more complicated. You have to find a sales price that reflects 25% labor costs. I remove the text of algebra and solve this equation:

Price + (PRICE + (PRICE = 25%)) = PRICE

OR

$ 30.20 + PRICE * .25 = Price

Do not panic!

The easiest way to do this math is to simply share the cost with the percentage you need to add to the labor factor to 100%.

$ 30.20 / .75 = $ 40.26

If your 10% work factor is math:

$ 30.20 / .80 = $ 37.75

Factor for market considerations and conduct your research on your race. Set your prices accordingly. Keep track of your ongoing analysis and adjust your workforce or formula multipliers as needed until you find the costs are covered. For example, you may find that you have to increase the cost to 2.5 or 3. A skilled workforce is actually a 30% factor or up to 10% factor.

Finally we did not receive delivery. This is the subject of another article, but do not forget to consider where the money comes from to cover shipping costs. If the delivery is included in the regular cost (you have to enter), you either need to add a delivery fee that actually only increases the retail selling price or if you have to use a larger multiplier closer to the two.

Summing up, you can analyze prices from dawn to darkness, in fact, many people are doing a career! I suggest you make a formula based on your best research. Make the formula simpler for your entire staff to follow. Most importantly, do not stop there. Be sure to check your figures in your income statement and modify the formula as often as necessary.

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