Floral designers: Avoid these 10 profit pitfalls — EveryStem (2024)

I promise you.

Floral design pricing strategy is not as complicated as it seems.

Being a creative person, you may not love the math involved in running your floral design business. I understand that completely. However, if you want to become a more profitable floral designer, you must make implementing flower math pricing a priority every day. Then you can take it to the next level by avoiding the top 10 floral design profit pitfalls I'll discuss below.

The fundamental structure of floral design pricing is a cost based model. Why use it? It’s simple and it works! You’ll calculate the total costs it takes to make your product and then add a percentage margin to determine your final retail price.

Your goal is a 70% profit margin on your flowers and hard-goods.

The mark-up on your flowers is typically 3 to 4x your wholesale cost. The mark-up on your hard-goods is usually 2 to 2.5x your cost. The design fee is calculated as a percentage and needs to be in the range of 30 to 50% depending on the complexity of the design. And what about the other costs of running your business? Rent, phone, internet, etc.? We’ll call that overhead and it’s covered by your profit margin.

Of course, these are guidelines and as a small business owner, you must decide what formulas work best for you. Don’t undercut yourself. Be sure to keep these suggested numbers as your starting point.

Alison Ellis of Real Flower Business has you covered wtih her #FlowerMath Course online.

If you need more help or want to clarify your pricing strategy check out the best Flower Math course available online. Alison Ellis has it down to a science over at Real Flower Business.

And, if you need a florist software to speed-up and simplify your flower pricing and ordering process. EveryStem is the best! Alison uses it for all of her flower pricing and attributes the fact that she achieved a 70% profit margin on every wedding she’s designed this season to this affordable software.

Now that we’ve covered the basics, I want to tell you about some profit pitfalls I see when it comes to floral design. They each cut away at the profits of the designers that make them. So, you’ll want to examine each one in the context of your business. Do you find yourself participating in any of these profit sucking behaviors?

10 profit pitfalls to avoid in your floral design business

1. Not budgeting flower orders and having too much waste

There are a lot of ways to create waste in the floral business. The biggest one is over ordering flowers. You need to budget your flower orders based on the flower math I mentioned above. Please leave a little wiggle room for breakage, but don’t order more than you need just because you don’t want to sit down and do the math.

2. Not evaluating perceived value

A cost based pricing model is a great way to ensure you are making a profit on every order. But it does not directly address perceived value. So when an arrangement doesn’t live up to the client’s idea of perceived value, it could land you in trouble. Your customer may complain because they think it doesn’t live up to the price they were charged. This will end up costing you more in the long run. You’ll make it right by refunding or replacing the floral arrangement. The key here is confidence in your math. That confidence will translate clearly when you educate your customer. You can let them know that it is filled to value and you stand behind it. You’ll want to make sure you are managing the customer’s expectations upfront to avoid these situations as well. We’ll delve deeper into that concept in a future post!

3. Not including all your costs in your pricing calculations

That tape you used on the bridal bouquet last weekend? You need to make sure that is included in your hard-goods costs. Too many small items being left out of the costs in your floral pricing can add up over time. Do a double check frequently and ask yourself and your employees if everything is being included in the math!

4. Not educating your team

As an employee, working off a recipe is great, but it makes more sense when you understand the math behind it. First, take the time to master your floral design pricing strategy and formulas. Then teach them to your employees too. It’s very easy for small additions to an arrangement or wedding design to eat into your profits. An employee taking the liberty to add a few flowers into each design can significantly change your profit margins over the course of a year. As the leader of your team it’s imperative that you stay on top of your profit margins and keep an eye on your flower costs.

5. Not checking your wholesale prices

I see so many floral designers that do not check wholesale prices often enough. It’s their job to provide that information to you. So, don’t be shy. Ask for it! You must use accurate grower or wholesale pricing. Why go through this process if your prices aren’t up to date? Flower prices fluctuate frequently. So, make sure you are basing your math off the most accurate costs possible. Many wholesalers can send weekly emails with updated pricing. Make sure you’re on their email list and call them for specifics.

6. Not negotiating

When you buy 6 hydrangeas, you will pay full price. That’s okay with me. However, when you buy 600 hydrangeas you’ve got to ask for a reduced price or you’re just leaving money on the table. Compare a few quality wholesalers and go with the best combination of quality and price. I’ve negotiated deals with my main wholesaler for years. So, it’s a win for both. They get more business and I get to consolidate my orders with my favorite locally owned wholesale company.

The concept of negotiating also applies to other facets of your business. So, look around and ask yourself where else can I save on costs by comparison shopping or negotiating a better price? For example, your business cards and printing needs, rent or hard-goods and supplies. Start researching now.

7. Not comparison shopping the competition

Cost-based pricing is a great strategy used by most floral designers, but not all. As a business owner, it’s important to comparison shop your competitors. You may have a competitor that works off a lower profit margin than you do. How does their quality and service compare to yours? Part of bringing value to your customers is being knowledgeable about your competitors. That way you can educate the customer about the added value you bring to their experience.

8. Not rounding up

$5 here and $3 there adds up quickly! If you are taking your pricing very literally, consider rounding up. As an example, I would sell a Bridal Bouquet for $350 when the math added up to $338. Rounding up offers a little wiggle room to play with especially on higher budget designs.

9. Not auditing your profit margin

You’ve taken the time to check prices from your wholesaler (see #5), now you need to make sure they charged you correctly. Wholesale invoice mistakes can eat into your profit margin. So, keep an eye on that. I also recommend checking your wholesale flower costs against your total sales every month. If the costs are out of proportion to your revenue, you’ll want to investigate and adjust quickly.

10. Not promoting less labor-intensive designs

Complicated floral designs can be exciting for you as a designer, but often they are not the most profitable options. Calculating the time it takes to create a design can be difficult and many floral designers underestimate the amount of time and labor a design may require. This often results in less than ideal profit margins.

When it comes to wedding proposals, giving your client multiple options is a great way to promote your most profitable designs. I’ll give you an example. I created a proposal for a client a few years ago. Initially, she showed me two different bridal bouquet concepts. The first concept was an intricate mixed bouquet of about 7 different varieties of white flowers and accents of trailing greenery. The second concept was a large and luscious rounded bouquet of about 50 blush peonies. We agreed I would quote both on her proposal.

Are you on the edge of your seat waiting to find out what happened next?

Well, the bride chose the peony bouquet! The complex white and green bouquet would without question be more complicated to make. Although it was smaller it required more preparation, wiring some flowers, and more design time. The all peony bouquet was going to take less effort to make because it was a straightforward hand-tied rounded bouquet. Think about this. Less design time equals more profit! Along with that because the peonies are a more expensive flower I made more profit overall. I spent a wonderfully short amount of time making it. She loved it and everyone lived happily ever after!

Now that we’ve reveiwed all 10 floral design profit pitfalls...

Can you identify which one is impacting your business the most?

Start with that and then work through each of the others with your team. Measure the effects of your floral design profit pitfall changes and let me know which one increases your profitability the most over the coming months!

To sum up profitability can be affected by so many factors. Once you and your team are up to date on floral design pricing strategy, you can concentrate on the profit pitfalls I listed above. My hope is that after reading this post you’ll be able to search out and find your own problem behaviors. I encourage you to take the time to discuss why profitability is important with your team. It will give them a better, more in-depth understanding of how your business generates revenue. Which will in turn make everyone on your team more able to focus on what they can do to streamline your processes and increase profits!

Until next time,

LuAnn