Calculating the Wholesale Cost
and Retail Price Estimate
for Floral Design
Knowing the cost and charging the proper price
ensures adequate profit for the business.
Background
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Discuss and Define the following terms
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Supplies
Products
Added-Value
Consumer / Customer
Wholesale
Retail
Mark-Up
Profit
Costs of Production
Marketing / Advertising
Price Sheet
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Using this price sheet will allow us to
calculate the wholesale price that we
paid to create the floral design.
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Then we can add the mark-up value to
charge the appropriate retail price to the
customer, to ensure company profit.
To get started we need to gather our
invoices that show what we paid for the
items we included in the finished product.
We will also need our RECIPE that shows
how much of each product that we used
in the design.
Wholesale Cost
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In order to know the correct retail price, we
must first determine what the input costs
were to create the finished product for sale.
What were the supply costs?
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Flowers, foliage, filler, vase, accessories
What about labor costs? Delivery costs?
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Think of this in a real world setting
Employees want to be paid!
Cost of vehicle, gas, insurance
The business costs: rent, electricity, etc.
Retail Price
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Why do we mark-up the price of the floral materials
and hard goods / supplies?
You have “Added-Value” to an agriculture product!
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The value you added: skills in artistic design, making a
finished product that is marketable and desirable to the
consumer (your customer) You took the ingredients
and made them worth MORE!
Would you rather buy flour, sugar, and eggs or a cake?
A business must make profit to pay the employees
and provide an income to the owner.
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An owner needs to have a home, a car, food, clothing,
vacation activities, etc.
How much do we mark up
fresh product?
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Description of
Flowers & Foliage
Fresh products are marked up
triple because there is more loss –
some items are damaged upon
arrival, don’t look just right, color
can be wrong, stems can break,
leftovers can’t be sold, etc.
# Stems
Used
Price
of
Bunch
Stems
per
Bunch
Price
per
Stem
Total
Wholesale
Cost of Stems
Retail Price
(after mark-up)
3 x price
Carnations
5
15.00
25
.60
3.00
9.00
Leather Leaf Fern
2
3.00
20
Wholesale Cost
Description of
Flowers & Foliage
# Stems
Used
Stems
per
Bunch
Price
of
Bunch
Flower
Price
per
Stem
Total
Wholesale
Cost of Stems
Retail Price
(after mark-up)
3 x price
Subtotal:
________
__________
Fresh Goods – flowers, foliage, filler, natural elements that can spoil fruit or
vegetables for theme, plants, etc. These are items that have a short shelf life.
How much do we mark up
hard goods?
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We mark up hard goods double.
We still up-charge these items because we had
to order them in bulk (large upfront cost) and
we paid a delivery fee.
These are only marked up double (compared
to triple for fresh) because if there are extra
items, they can be used another time.
Some items are losses, if they are broken, or if
they are for a holiday or theme that is no
longer needed.
Description of
Hard Goods & Supplies
Quantity
Used
Cost Per
Case
Items
Per
Case
Bud vase
1
18.00
24
Ribbon
1 yd.
5.00
50 yd.
Cost per
Item
.75
Total
Wholesale
Cost of Items
.75
Retail Price
(after mark-up)
2 x price
1.50
Wholesale Cost – Hard Goods
Description of
Hard Goods & Supplies
Quantity
Used
Items Per
Case
Cost Per
Case
Cost per
Item
Total
Wholesale
Cost of Items
Retail Price
(after mark-up)
2 x price
Supply
Subtotal:
________
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Hard Goods – containers/vases, supplies, ribbon, foam, wood picks,
preservative, candles, accessories, enclosure cards, wire, cardette, etc.
Other indirect costs…
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Once you have calculated your
subtotals (fresh product total
and hard good total) then add
those together to get your
SUBTOTAL for the finished
design.
Now – we add the other costs
associated with the
production process.
Taxes: charge state sales tax
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Labor is calculated to cover the
cost of paying an employee
minimum wage.
In floral there are various
options for this. One method
calculate labor at $1 per
minute for making the design.
This is most effective with
experienced designers, rather
than new workers.
Now find the total prices!
Total Wholesale Costs
________
Total Retail Price
__________
Tax 7.25%
(Multiply Retail by .0725)
+_________
Labor Charge 25%
(Multiply Retail by .25)
+_________
Delivery Charge 10%
(Multiply Retail by .10)
+_________
Grand Total:
(Sum of Retail, Labor,
Tax, and Delivery)
Profit (retail – wholesale)
$__________
_________
You have now learned a skill!
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Calculating wholesale and retail costs is a skill!
Learning the necessary processes of running a business
is important for any job you have!
You should include this skill on your resume!
Include a work sample that demonstrates this business
skill in your portfolio
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Include a picture of a finished design, list the itemized
wholesale cost, and create an invoice with the retail price
How can this apply to other
agricultural businesses?
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What are some costs for meat production?
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Animal, feed, vet costs, kill fee,
butchering, cut/wrap, housing,
insurance, ???
How do we determine an appropriate price
for the finished price?
What about a loaf of bread?
What about cheese?
What about plants from the greenhouse?
What about service products: your labor for
landscaping, web design, journal / blog for a
company????
Summary
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Our class doesn’t charge accurate retail prices
because we do not have accurate input costs.
As a public school, many of our costs are paid for
through state or federal funding.
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We do not have to pay our electricity, rent, insurance,
etc. out of our class budget.
We have free labor! YOU!
We are not true professionals – we have not
invested years or tuition for adequate advanced
training
We are not trying to be a profitable business
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We want to support our local businesses providing this
service, not compete with them.