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How does one set the price of plants?

qrper
13 years ago

How do professional nursey people calculate the price of annual plants?

Comment (1)

  • calliope
    13 years ago

    Despite popular ideology, there is no generic formula to determine how a business prices their plants. First off, you need to know exactly how much it costs to produce your product not only in materials but the overhead and wages, including the owner's take. Then you need to know how much of your product you can expect to move and how much of it you might have to eat when the season is over because your shrinkage might be the difference between profit and loss.

    Then you need to know how much of the market you can expect to have a share of, and who your competitors are and how much they are charging. Then you need to know if the price you must charge to make a profit is higher or lower than your competitor's price. If your price is lower than your competitor's price, you need to ask yourself if you want to raise it higher to make more profit or if you are satisfied with just enough to keep you in business. Then if your prices are higher or you just breaking in the business and don't have a customer base, you need to determine if your quality and service are good enough to lure people to buy from you. Then you pray for a good sales window, lots of exposure to clients, and no diseases or insects come your way. IOW, knowing what to price comes from experience in the business and that's why everyone doesn't charge the same amount and why some people need to charge more or can take less.

    I'm not trying to be a wise acre or flippant. Pricing is more crucial for the person starting out in the business than one with an established reputation and new businesses are at the same time the group who have the most difficulty establishing what they need to charge. A crystal ball would be nice for all of us. ;-)

    If you are planning to start a growing or sales operation, the first thing you must do after determining you can produce a good product in the necessary quantities and have the skills to market it is to know what prices are common to your market and who your competitors are. They may be a concern in a different country even. You need to know this before you put a tag on the first plant or spend money for your equipment. IOW only you are in a position to address those unknown variables for your particular locality.

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