Why you should never, ever under-charge

In my opinion a letter tribute CANNOT cost less than £35 per letter. In fact, I don't really think they should be sold for less than £40/£45 if they are made properly and certainly not if there's a cluster, anything other than AYR basing and a foliage trim.

Because by the time you take into account the cost of the frame, the flowers, the foliage, the ribbon, the cluster and your time plus a contribution to the rent, rates, insurance and all the other costs of running a business you simply can't charge anything less than £35 and even then I would worry about the profitability ... and no, I don't care how cheaply you buy the flowers for.

Sorry, what do you mean you don't take into account a contribution to your overheads?

Excuse me; did I really hear you say you don't charge for your time?

Errm can you say that again?  You are charging £25 a letter because there's a woman up the road who does them for that so you have to charge the same as otherwise you won't get the business?

In the words of John McEnroe; You Can Not Be Serious!!!

Trouble is this is serious. These are all genuine comments from florists and it really worries me. Not just because it means a lot of florists haven't got a clue about pricing or profitability but, by charging too low a price, they make those of you who do price properly look expensive when actually you are simply charging the right price.

And as for the florists who either tell me their customers won't pay more than £25 or that they have to price match £25 a letter to get the business I despair even more. Because that implies that either their shop is in the wrong location/not destined to survive or they are too scared to stand by their guns and charge what needs to be charged. Neither of which is good for anyone's health, sanity or bank balance.

Throughout the world of retail there are discounters (think Aldi/Primark/TK Maxx etc) just as there are differing grades of coffee shops, bakeries (Gregs versus Patisserie Valerie) shoe shops (Jimmy Choo/Office/Shoe Zone) etc etc.

But does Waitrose price match to Aldi?

Does Jaeger slash the price of their dresses to match Primark?

Have Fortnum and Masons introduced a low priced sausage roll because they are afraid of Gregs?

Not on your nelly. In fact Sainsbury's are doing away with their Price Match. Yes, all of them may have special lines and offers but they have also clearly defined their place in the market and consciously gone for the customer who can pay the price they need. And you can be sure as heck that that price will cover all the things on my list and then some.

So please. Rather than bemoaning what other people charge leave them to it. Let them make the loss and instead focus on your business with the two golden rules of pricing:

GR1: Make sure your prices cover ALL your overheads, cost of goods and something for yourself and a rainy day – if you can't do that then, harsh as it may sound, you perhaps have to think hard about your business prospects and viability.

GR2: NEVER EVER price match a perceived competitor to get business. Not only is it the biggest mistake a business can make but quite frankly, if the customer is that cheap it's not the sort of customer you want.

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