How to profit when buyers are brokeOctober 26, 2009: 3:32 PM ET
Even in a recession, savvy retailers can boost their business.
The Flower Lady, Suwanee, Ga.
How does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week -- flowers are perishable!
By Coeli Carr, CNNMoney.com contributing writer
As budgets get tight, people are spending less on luxury items -- which means retailers in that market also need to clamp down and mind the bottom line.
Flowers' short shelf life mandates that you control buying and adhere to a strict formula, says Keith Riewe, owner of Bice's Florist in Fort Worth, Texas. The industry standard rule is that the wholesale cost of your flowers should be one-third of what you sell them for, he says.
The moment you realize you've got product left over, it's time to cut your orders, says Riewe. Although many florists pay less for flowers by using a standing order, it's often more cost effective to customize your orders. You'll pay a little more, but you won't be throwing unsold flowers away. It's better to run out than to have unsold product, he says. Some florists have hybrid ordering systems that consist of a smaller standing order, and a separate, supplemental order when necessary.
Another way to cut your expenses is to keep a detailed count of what goes into your bouquets.
"Designers love to overstuff an arrangement to make it look pretty," says Riewe. "When that happens, you're giving the customer way more than what they pay for."
Louie Theofanis, owner of Major Wholesale Florist in New York's flower district, suggests boosting your margins by filling out bouquets with less expensive but attractive blooms. "Presentation is always important," he says. "It's important that customers feel they're going out of the store with an armful of flowers, and that they're getting their money's worth." Greens have a longer shelf life, he adds.
But no matter how gorgeous your merchandise is, you need to get customers into your store. That's why advertising and promotions are even more important in a sluggish economy. Riewe recently gave away 500 rose bouquets, featuring a dozen flowers in each. The only thing people had to do to get one was come to his shop and provide contact info. Along with the bouquets, recipients got a card prompting them to visit the shop's Web site. Remarkably, 298 out of the 500 people did so.
That's another way to boost business. "It's imperative you become technically savvy," says Riewe, adding that most flower shops, compared to other retailers, are lagging by five or six years. He suggests using point-of-sale software to collect information from those who send and receive your flowers. Using the data he collects, Riewe sends out "preferred customer" cards, which offer an opportunity to earn reward points and be notified by e-mail of special offers.
Riewe suggests that florists rely less on corporate clients and focus on consumers. If one big company's account represents a large part of your business, your revenues will become too dependent on them. Expanding into weddings and events is a smart move because those orders are typically paid for up front.
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