Marketing Basics for Flower Farmers: Pricing (Part Two)
A vintage sap bucket nestled between rows of dahlias—where beauty meets hard work.
Pricing—it’s one of the most challenging aspects of flower farming. Between the hard work you pour into every bloom and the practical need to make a profit, finding the perfect balance can feel daunting.
The good news? You don’t have to be a pricing expert to price your flowers effectively. With a bit of strategy and insight, you can develop pricing that works for your customers and your business.
In this post, we’ll break down the key areas to consider when pricing your products, from understanding your costs to evaluating competition and market demand. Whether you’re just starting or looking to refine your pricing approach, this guide will help you price confidently.
Cost of Goods Sold
To price your flowers effectively, the first step is understanding your Cost of Goods Sold (COGs). This means calculating the expenses that go into producing your products—from seed to sale.
Some common costs for flower farmers include:
Seeds, bulbs, or plant starts
Fertilizer and soil amendments
Water and irrigation costs
Tools, sleeves, rubber bands, and other packaging materials
Labor, whether yours or hired help
While it’s not always necessary to calculate the cost per stem, having a general idea of your total production costs can help ensure your pricing is profitable.
Tip: Keep your cost tracking simple by recording expenses in a spreadsheet or using bookkeeping software. For a deeper dive into managing costs, check out our blog other blogs linked below:
Competition
Understanding your competition is essential for setting fair and competitive prices. By analyzing similar businesses in your area or niche, you can identify benchmarks that guide your pricing decisions.
Here’s how to get started:
Research Competitors: Look at local flower farmers, florists, or other businesses offering similar products. How are their flowers priced? Are they offering similar quality or unique designs?
Evaluate Your Differentiators: What sets your farm apart? Is it the freshness of your flowers, the unique varieties you grow, or your branding and presentation? Use these strengths to justify a higher price or attract a loyal customer base.
SWOT Analysis: Conduct a Strengths, Weaknesses, Opportunities, and Threats analysis for both your business and your competitors. This exercise can uncover areas where you can stand out or refine your offerings.
Pro Tip: Keep track of what sells best for your competitors and yourself. Regularly evaluate which products are the most profitable or in demand, and adjust your pricing accordingly.
By understanding your competition, you can confidently position your pricing within the market while showcasing the unique value you bring to customers.
Not sure which decisions are driving profits or costing you? Learn how to evaluate your financial choices and boost your flower farm's profitability by clicking the button below!
Consumer Demand
Is there a demand for the product you’re offering? Understanding consumer demand is vital for pricing effectively—it’s about knowing what your customers want and how much they’re willing to pay.
Why Demand Matters:
Flowers are a high-demand luxury item, but demand varies depending on factors like season, market trends, and your location. A bouquet that sells out at a city farmers’ market might struggle in a rural area with hobby gardeners. On the flip side, offering unique or hard-to-find varieties could give you an edge in any market.
How to Assess Demand:
Ask Your Customers: Use polls on social media or ask regular customers what they’re looking for.
Engage Your Community: Talk to event planners, florists, and other local businesses to learn what’s trending.
Monitor Sales Trends: Keep track of what sells well at different times of the year. Use this data to adjust your offerings.
Supply and Demand Basics:
If demand is high but supply is limited, you can charge a premium for your flowers. On the other hand, when demand is low or supply is high, it’s harder to justify a higher price.
Example:
In a rural area where customers grow their own flowers, “common” blooms like sunflowers might sell for less. But specialty blooms—like unique dahlia varieties—can command higher prices due to their rarity.
By understanding consumer demand, you can tailor your offerings to match what your customers are excited about, ensuring both profitability and customer satisfaction.
Sales Outlet
Where and how you sell your flowers plays a major role in determining your pricing. Different sales outlets come with varying overhead costs, customer expectations, and price points.
Consider These Sales Outlets:
Farmers’ Markets: Great for direct-to-customer sales with lower overhead costs, but customers may expect competitive pricing.
Brick-and-Mortar Stores: Partnering with local shops or florists can expand your reach but may require wholesale pricing, which impacts your profit margins.
Pop-Ups and Events: Selling at craft fairs, weddings, or special events allows for premium pricing, especially if your flowers are the focal point of the display.
On-Farm Sales: A farmstand or U-pick experience provides direct access to customers, often at a price point you control.
Online Sales: Selling bouquets or subscriptions online can broaden your audience, but you’ll need to factor in delivery and packaging costs.
Adjust Your Pricing to Match the Outlet: Each sales outlet comes with its own set of challenges and opportunities:
Higher Overhead: If you’re selling through a florist or hosting a pop-up that charges booth fees, ensure your prices account for those costs.
Customer Perception: Customers buying directly from your farm may expect lower prices than those purchasing from a premium retail space.
Example:
A bouquet sold at a farmers’ market for $25 might need to be priced at $15-$18 wholesale to a florist, who will mark it up for their customers. Meanwhile, the same bouquet at a pop-up in a high-end boutique could sell for $30+ due to the elevated setting and clientele.
By understanding the dynamics of your sales outlet, you can adjust your pricing to maintain profitability while meeting customer expectations.
Looking to explore different ways to sell your flowers directly to customers? This guide breaks down the most effective sales outlets and how to make the most of them.
Marketing Objectives
What’s your goal when pricing your flowers? Is it to maximize profit, increase awareness of your flower farm, or move a surplus of blooms quickly? Defining your objectives can help you set pricing strategies that align with your business goals.
Key Objectives to Consider:
Maximizing Profit: For premium blooms like specialty dahlias or event arrangements, you might aim for higher profit margins to reflect the value of your work and materials.
Building Awareness: If you’re new to the market or introducing a new product, pricing competitively or offering specials can attract attention and build your customer base.
Moving Surplus: For crops like sunflowers or zinnias in peak season, you may need to lower prices to sell quickly and avoid waste.
Supporting Your Brand: Pricing can also position your brand as a luxury, artisan experience or as an affordable, local option, depending on your target market.
Adapting Objectives to Your Situation:
Your objectives may change depending on the product, season, or sales outlet. For example:
A CSA bouquet might be priced to maximize retention and loyalty over profit.
Bulk flower sales to florists: Pricing can be structured to encourage repeat business and streamline sales, even if the price per stem is slightly lower than direct-to-consumer sales.
Offering early bird pricing or pre-order incentives can encourage commitment and boost sales while maintaining profitability.
Location
When it comes to pricing, location plays a huge role. Your local market, demographics, and geographic context directly impact what your customers are willing to pay and how much it costs to produce your flowers.
Factors to Consider:
Local Economy: Pricing in a high-cost-of-living area like Seattle or San Francisco will differ greatly from pricing in a rural Midwest town. Customers’ purchasing power often reflects the broader economic conditions of your region.
Customer Demographics: Who are your customers? Are they retirees, young professionals, or destination brides? Knowing your audience helps you tailor prices to match their expectations and budgets.
Growing Costs: Your location also affects production costs. For example, high-altitude flower farming or sourcing compost in remote areas may increase expenses. These higher costs need to be reflected in your pricing to maintain profitability.
Example:
Our farm is located in a rural but wealthy area, with Bay Area retirees and Lake Tahoe destination weddings contributing to our customer base. This unique mix allows us to price our flowers competitively, even though production costs are higher due to our challenging growing conditions, such as high-altitude weather swings and limited access to affordable compost.
By understanding how your location affects both costs and customer expectations, you can set prices that work for your business while appealing to your local market.
Using Stem Count, aka “Flower Math”
If figuring out pricing from scratch feels overwhelming, “flower math” can be a game-changer. This method simplifies pricing by focusing on stem counts and industry-standard markups, giving you a structured approach to pricing bouquets and arrangements.
How to Use Flower Math:
Find Your Base Costs: Start by calculating the cost per stem. This includes direct expenses like seeds, labor, and packaging. If you’ve already done a cost analysis for wholesale pricing, you can use that information as a starting point.
Apply Markups:
For retail sales (e.g., farmers’ markets or direct-to-consumer bouquets), a standard markup is 2x your base costs.
For event or wedding arrangements, markups typically range from 2.5x to 3x the base costs, with an additional percentage for labor (commonly 20-30%).
Caveat: These markups can vary depending on your market. Factors like your location, customer base, and competition may influence whether you adjust up or down. For example, rural areas might favor slightly lower markups, while urban or luxury markets may support higher ones.
Designing to Fit Budgets:
Whether you’re setting a price point or working within a client’s budget, stem counts and pricing formulas can help you create beautiful arrangements while staying profitable.Examples:
A $25 bouquet might include 10 stems at $1.25 each, plus packaging and labor.
For a $100 budget, you can calculate how many premium stems (like dahlias) and filler flowers to include.
If a client provides a specific budget, you can work backward by starting with their total and breaking it down by stem cost, labor, and packaging to ensure both value and profitability.
Why It Works:
Flower math ensures that you’re accounting for all your costs while giving customers a clear and consistent value. Over time, this method can help you confidently price your products and streamline your workflow.
Raising Prices
Everything seems to be getting more expensive these days, and flower farming is no exception. If rising costs have you considering a price increase, it’s essential to approach it thoughtfully to maintain customer trust while ensuring your business remains profitable.
When to Raise Prices:
Increased Costs: Higher prices for supplies like compost, seeds, or packaging may require a price adjustment.
Inflation: If overall costs are rising, it’s reasonable to increase your prices in line with the market.
Demand Growth: When demand for your flowers consistently outpaces your supply, a price increase can reflect their value.
How to Raise Prices Effectively:
Make Small Adjustments: Instead of large jumps, increase prices gradually—typically between 2-7%—to minimize customer pushback.
Highlight Added Value: If possible, pair price increases with visible improvements, like better packaging, new varieties, or expanded services.
Communicate Transparently: If you’re in direct contact with customers (like CSA members or regular buyers), a simple, positive explanation can go a long way. For example:
“To continue offering the same high-quality flowers you’ve come to love, we’ve adjusted our pricing slightly to reflect increased costs.”
Example:
A $25 bouquet could be raised to $27.50 to account for rising expenses. Over time, these small adjustments add up, ensuring your pricing keeps pace with your costs.
Pro Tip: If you’re unsure about raising prices across the board, consider introducing a premium option at a higher price point. This allows you to test demand for higher prices without alienating existing customers.
Pricing your flowers isn’t just about numbers; it’s about understanding your costs, your customers, and your market. By using strategies like flower math, considering your sales outlets, and aligning your pricing with clear objectives, you can confidently price your blooms for both profit and customer satisfaction.
Ready to take your marketing to the next level? In Part Three: Mastering Promotion for the Flower Farmer, we’ll dive into how to showcase your flowers effectively and connect with your ideal customers. From advertising tips to building authentic connections, this next step in the series will help you grow your flower farm business.
Read Part Three: Mastering Promotion for the Flower Farmer →
