Comparison Buying... & What it means for a florist
Last week we talked about successful marking up. This week we are looking at comparison buying and what it can mean for a florist.
Have you considered comparison buying for any of the following?
Holidays? - Trivago / Expedia
Electricity? - U Switch
Insurance? - Compare the Market / Go Compare
Flowers? - ???
Sundries? - ???
Relay? - ???
Price comparison purchasing is everywhere in floristry, yet without doubt, it's a new way of thinking. Comparison buying is the opposite to loyalty, it doesn't work on the old ' I knew your dad ' buying method.
And comparison buying as described below isn't just for flowers/plants/sundries it can be applied to any service or supplier. Fresh thinking provides a method to compare the total cost of any service. It blows away any pre-misconceptions, by calculating the entire cost of a shipment of goods or service. Sadly in truth, it's something many florists fail to do.
Price comparison is mainly to do with choice and when it comes to buying flowers, choice allows you to pick either the quality you need for a specific job or quantity for a job in hand. Only when you broaden your scope (ie compare) does choice & opportunity appear on the horizon.
Without doubt, item prices are a lot cheaper from web-shops, mainly because the running costs and overheads are reduced. But how can you know whether your buying smartly? How do you know that you're doing the right thing for your beloved florist shop?
It's a simple thing to do, have 5 or so webshops open, or use a "go compare" site that houses many web-shops and just filter. Ours is a strange game because what we sell is a commodity, those flowers we buy have been auctioned off and no one company has won the auction in each different auction hall, they may have best price on lilies and the worst on carnations for example, so any money saved on the lilies is neutralised by higher prices carnations. The trick is to pick up everyone's best price weekly and measure.
Here's how to measure. It's called ANNUAL OVERSPEND.
First understand the 60 week rule, 60 weeks is derived at by allowing 8 weeks for additional peak period buying, then adding them to the normal 52 weeks a year.
So the lily was a 1 metre tall Santander with 4+ heads, from Paauw lilies.
You find the best and worse price ( I've just checked ) £1.17 against £1.65 on Florismart.
That's a 48p difference.
Times 10 per buch = £4.80
Times 30 stems a week = £14.40
Times 60 weeks = £864 annual over spend.
Compare a carnation pink 70cm from Columbia fancy grade:
Best price 22p
Worse price 41p
That's 19p difference
Times 150 stems of Carnation a week (its the same price for all colours) = £28.50
Times 60 weeks = £1,710 annual overspend.
You may think the higher priced flowers would never get sold, but oh yes they do, anyone who buys from only one or two suppliers has no choice but to buy them.
If you purchased the Lillies and Carnations at best price every week that would cost best price £2,106 and £1,980 = £4086 total, and at worse price £2,970 and £3,690 = total of £6660. Annual overspend on just two items of £2,970.
To think we were just looking at pennies to start with, this really starts to get mind blowing when you think each shops stock 25/30 lines of flowers and foliage every week.
Some companies do or do not charge deliveries charges, it matters little because you can add that to the equation once you start to do the sums like this.
I suppose looking back to the old days, suppliers needed your loyalty to help shift the good and not so good prices they had. Today it's a competitive world, be part of it.
Here is something else to ponder, if it took an extra hour a week to shop like this (it doesn't by the way) that would be, on just these two examples of lilies and carnations £2970 saved, divide that by 52 hours, you'd be getting a hour wage of £57 per hour.!
Next week - Fresh thinking on relay
Simon & Team