April 2007

BIZ TIPS: Shop-Related Factors to Consider when Purchasing Fresh Flowers and Foliage

A florist should be in business to make money. When too little or too much of a product is purchased, the profitability of the business is affected. The following considerations might assist a florist in becoming a more efficient buyer. For the most part, these are factors over which a florist has total control.

Shop Budget
Every shop should have an overall budget that includes a separate budget for the purchase of fresh products for everyday use. A second budget should be developed that will allow a florist to determine the appropriate amount that should be spent for special events such as weddings and parties. Both of these budgets should include a percentage for shrinkage (flowers bought but not sold before perishing). Purchasing perishable products successfully hinges on the budget one is willing to operate under. The following information can assist one in purchasing wisely.

Everyday Budgeting
Projecting the daily needs of a flower shop can be difficult. A florist needs to carry enough products to meet his or her clients' needs. Accurate records of purchases and sales made everyday should be kept. An owner/manager can then refer to these records for a specific period from the past year. A comparison of the previous year's figures to those of the current year should give the owner/manager an idea of the amount of a product that should be purchased. The owner/manager should look at the trends the shop's customer base is following, as well. This comparison and observation of trends should assist a florist in determining what percentage of the allotted budget can be spent for fresh flowers and foliage. Some shops have limited space.

It is best to limit the numbers of flowers that are purchased when this is the case, because most flowers should be refrigerated to achieve the longest vase life possible, especially roses, wilt-sensitive flowers, and short-lived flowers. If a great deal of extra product is needed to fill orders for holidays or special events, the florist might consider renting a refrigerated truck so that all of the products and arrangements can be stored under the proper conditions.

Customer-Related Considerations
When purchasing flowers, a florist should buy the varieties that the customers want. A shop should introduce new products in small amounts so that a new market can be cultivated for the products. The quality of the flowers is also of the utmost importance. Research has shown that consumers prefer products that last 7 to 10 days. Many consumers judge the quality of the flowers they purchase solely on how long they last. The following factors should be considered when purchasing flowers and foliage. They actually work together instead of separately.

Target Market
A florist's target market is the segment of the population that the shop would like to serve. A florist needs to identify his target market and to gear his advertising, selling, and merchandising  efforts to this segment. For example, the gray market, which is a mature market segment of people 55 years and older, tends to purchase traditional flowers and arrangements. The couples market tends to try new flower varieties and arrangements. A florist should purchase products to satisfy his customers' needs, as well as to educate them about new designs and flower varieties that are available.

Customers' Buying Habits
A florist should also look to see how much of a product is left from previous purchases. If a florist bought a bunch of red carnations on the previous day, but has not sold them yet, then he should not purchase any more until the others have been sold or are no longer useable.

A florist should track the buying habits of his customers. The gathered information will prove whether or not a shop has targeted the right market. There are three sources of information that a florist should use to track consumers' buying habits: dump sheets, compiled sales and price point information, and suppliers' invoices. A shop's dump sheet informs the owner of what fresh products did not sell. The compiled sales and price point information, generated daily, identifies the fresh products that were sold. The suppliers' invoices remind the owner of the fresh products that were purchased. If an owner compares the information from these three sources during the same time period, he will be able to compile a list of products that are popular in his market.

This type of comparison should be made frequently, approximately twice a month. The results of each comparison should be recorded so that a pattern can be established. Information like this will not only assist a florist in making wiser purchases, it can also assist in improving a shop's profit margin, inventory practices, and stock rotation.

Over the course of time, an owner should revaluate the buying habits of his shop's customer base. He or she may find that there has been a change in the customers. The florist could find that the original market has relocated or has been transformed into a totally different market. Knowing what customers want and educating them as to what is available will keep the business in line with its growth projections.

Buyer's Checklist

Special Events Budgeting
A florist should calculate a budget for all special events, such as parties and weddings. First, the florist should calculate an event's wholesale budget by arriving at the percentage of cost of goods. For example, if a florist sells an $800.00 party and he uses a 25 percent divisional markup, his budget would be 25 percent of $800.00, or $200.00. The $200.00 figure must include all perishable products and hard goods that will be used to complete the party. Proper planning for special orders will help ensure a smoother, more profitable outcome.

A florist should become an automatic selection buyer. In order to do this, the florist must become totally familiar with a buyer's checklist. After a period of time, the items on the checklist will become an automatic process that the florist goes through during his selection of flowers and foliage. The following list will assist a buyer in organizing himself during the purchasing process.

Inventory-Related Factors
The size of a shop's perishable inventory should be in direct proportion to the amount of sales being made. Package size information ……..is very helpful in controlling a florist's inventory. The following factors should play an important part in a florist's purchasing plan.

Inventory Control/Stock Rotation
A florist should set up a stock rotation plan to control the inventory of fresh flowers and foliage. A dating or coding system will help assure that flowers are used as they were purchased, rather than through indiscriminate selection. Flowers should be disposed of and replaced with fresh products when they have not sold in their allotted time period. The idea is to use the oldest flowers before using the freshest ones. A florist should totally rotate through purchased stock two to three times each week.

Storage Space Availability

Fresh Flower and Foliage Ordering List
A florist should make a list of the flowers and foliage needed before he or she goes to market or calls the wholesaler to place an order. This will prevent the buyer from getting sidetracked and making unnecessary purchases.

A floral shop owner should strive for a good working relationship with the wholesalers he or she buys from. When both the wholesaler and the florist have a mutual understanding, both can benefit from the relationship. A florist has the responsibility to order products far enough in advance for the wholesaler to obtain them in a timely fashion. It is the wholesaler's responsibility to provide the freshest, best quality products available. Purchasing quality flowers and foliage should be one of a florist's primary business objectives.

Quality flowers are cut at the proper stage of development and shipped to the supplier quickly. A supplier will care for the flowers and foliage in the appropriate manner so that the fresh products are of the best quality that a florist can purchase. It is then up to the florist to care for and handle those flowers and foliage in the proper manner so that the consumer can have the opportunity to purchase quality, long-lasting flowers.

A florist should realize that the quality of the flowers and foliage he or she sells is just as important as their price. Poor quality, cheaply priced flowers do not encourage repeat purchases. Products of high quality that are fairly priced will encourage repeat business and help ensure the success of a florist's business.
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