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On The Level With Neville: June/July 2011
What Should I Charge? |
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Written by Neville MacKay
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These days it’s important to watch every cent that comes into and goes out of our stores. It’s also crucial that you find the right balance. You can’t be too cautious and cheap with your pricing and spending or you’ll get known as a penny-pinching tightwad who would charge for the dust on the shelf if he could. This approach can backfire and cost you customers if they feel they’re being nickel-and-dimed to death.
We all have read the formulas and pricing strategies there are for arrangements, so for me to get into all that may bore you as much as it would me. I will say though, use your eye as well as your calculator when pricing your products and arrangements. It’s not always black and white when pricing, especially when it comes to labour, so use those formulas as guidelines and not hard-and-fast rules.
I know there are charges for everything – fuel surcharges, service charges, fees for this and fees for that – so sometimes a regular markup of 3.25 times isn’t going to cover your costs. Watch freight charges and be sure to add those in. I once nearly put myself in hospital after looking at an invoice and seeing a 50 per cent freight charge on a shipment! So much for getting a good deal . . . groan.
Here’s a news flash: greens cost money! It’s remarkable really that greenery is so undervalued in our industry. We at our shop include greenery in our markup, and price the accent/focal greens on their own (aspidistra, monstera, etc.). I had to have a little chat one day with a co-worker once when she thought she’d use two bunches of beargrass with three gerberas as it looked “cool,” and was surprised to hear that beargrass wasn’t in fact “free”! I’ve even had folks come in asking for greenery to use with their at-home flowers for free!! My gayness, it took all my charisma not to give them a little more than greenery, if you know what I mean.
Don’t forget to charge for what you know. We have learned a lot over the years and this knowledge has a value. When charging for your work, take into consideration the design, the skill needed to create the piece, the time it takes to make it and the impact it will have. There are pieces that we have created here that took forever to assemble, while others that were really a “wow!” took just moments. This is where you have to be careful to determine what your skill is worth. I know how important it is to be competitive, but Starbucks can sell a coffee for a bundle because they are Starbucks, can’t they? I have some talented folks working with me here, and when I see the work Danielle does, for example, I can easily bump up the price to reflect its quality.
You should never, ever apologize for your prices. One time an old crow flew into our store on her broom and went on like she had a disorder about how terribly high our prices were! I was so out of my mind angry that I tossed her a toonie and told her she had gotten off the wrong bus. We have to charge what we have to charge, and that’s that. Here’s what to do to get people to pay what we need them to: offer them a range of prices, but not with the “our prices start at . . .” line. Try to offer three prices as a beginning point for an arrangement, and most times people will go for at least the second price (no one wants to look cheap!) Once a price is determined, then you have the opportunity to “upgrade” what you’re selling and, for goodness sake, tell your customers that of course there will be tax and delivery charges added on. I heard someone actually ask a customer once if they’d like the tax and delivery included in their price! I nearly fainted. Also, by finding out first who and what occasion the flowers are for and where they are going, you can better offer a budget to work around. (I find checking out what the customer is wearing helps too!)
Every insertion costs money. At least, that’s what a lady at a show said years ago, and I never forgot it. Labour charges are important and by not charging for the work it takes to make an arrangement, you’re not only giving flowers away but also losing a lot of money. A standard of 20 per cent is a guideline to work with, but is just that. A lot of places that have recipe-based designs have their labour well looked after, which works for some, while others will have an automatic charge they add to an arrangement depending on the price range, which is posted for the designers to see. Also, I’ve seen shops hide some of the labour they charge in the price of the containers they use. Whatever works for you is fine, so long as you charge for your work.
Well, now I have to go rent a car for the low price of $29.95 a day, plus tax, insurance, fuel charge, soft seat charge, brakes that work charge, round tire charge . . . argh, I think I’ll take the train. All aboard!
Neville owns and operates My Mother’s Bloomers in Halifax and lives close to Peggy’s Cove with his partner, David, three cats and an overgrown garden. For more info on Neville or to book him for a show or talk, check out www.mymothersbloomers.com .
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