Remember to factor in:
• National Insurance Contributions
• Employee wage • Holiday pay and cover whilst the employee is on leave
• Possibility of sick pay
• Rent and rates • Utilities
sell for £1.50 you make a 66% profit, not the more dangerous thinking of 300% profit many people tend to think. From the 66% percent you then deduct wages, rent, taxes etc, and you start to see that the margins are considerably slimmer automatically.” Ed also highlights the dangers
of variable prices: “The most progressive shops understand there must be a constant price all year round. A bit like McDonald’s do, at any shop in the country it’s the same price for a burger, fries and a drink all year round. This way you are providing consistency to your customers and can more likely bet on their return.” There is formula to maintain
margin even though the incoming prices change. If you are selling a lily at £2 during the summer and £4 in the winter, it stands to reason that one of your own customers asking for a lily bouquet will get two
What you said “When I hear about florists putting 300% or 400% mark-up on flowers it makes me realise why such a large proportion of the population think that flowers are an unaffordable luxury.”
94 F&wb Summer 2013
“You have to find what market is right for your area, and if your
customer won’t meet your prices then you are not selling the right goods”
different sized bouquets for the same money, you may lose the customer and your margins will be harder to keep track of, so as a rule, charge £3 all year round. “You have got to find what your
customers will be prepared to pay,” says West Malling’s Nikki Meader. She adds: “Our two shops
are very different, West Malling is a gift orientated market, so 90% of my customers are buying for somebody else, but in our other shop it is almost a reverse, because the majority of people there are buying flowers to have in their home. You have to find what market is right for your area, and if your customer won’t meet your prices then you are not selling the right goods.”
Knowing your market
A 100% mark up may not be giving you a significant return,
Sales per day
Overfilled by 50p per order
10 15
20 UK Average 25 30
Overfilled by £1 per order
10 15
20 UK Average 25 30
and prices may need to go up, but it is also important to recognise the damage of overcharging. We all know that competition from major retailers such as the supermarkets is fierce, and these establishments will continue to keep their prices low. We also know that customers are getting increasingly thrifty as the threat of a triple-dip recession continues to linger on. However, a very simple strategy
could help put a new pricing structure into motion. A rise from as little as 50p on particular lines could see margins rise. Going back to the simple analogy of selling 120 bouquets a day, adding 50p to each unit would result in an additional income of £60.Take this additional rise to £1, £2 and £2.50 and you have increased your margin by £120, £240 and £300. For every single product line,
retailers should ask, ‘how much will somebody pay for that?’ “If you know your customers
are not going to pay £5 for a calla
Loss per day
£5
£7.50 £10
£12.50 £15
£10 £15
£20 £25 £30
per week Loss
Annual loss
£30 £1,560 £45
£2,340
£60 £3,120 £75
£3,900 £90 £4,680
£60 £3,120 £90 £4,680
£120 £6,240 £150 £7,800 £180 £9,360
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