In this lesson we will look at how we calculate the costs and Return On Investment of an online florist. We will consider setup costs, ongoing costs such as Google Adwords, Relay Fees, ongoing technology costs and then income streams. Did you know that a good website will not just sell online but will also increase your telephone sales?
When setting up a website there are costs in the setup, design and deployment of the site. Flower Store In a Box has a couple of different setup options for $3000, $7000 and $10,000 and we offer payment plans on the higher packages.
In terms of setup costs you will also have the following costs:
You can spend as little or as much as you like on advertising, but the more your spend the more sales you will get. On average mid sized florists spend about $50 to $75 a day on Google Adwords with an average of about 3 to 4 orders.
Setting prices online is often difficult to begin with but a good rule of thumb is to calculate the base cost of the product and cost of sale first.
So this is the base cost of this product before anything else is added, so you then need to factor in your profit margin, stock wastage, fraud etc.
So you might charge a basic $90 on this product, include a vase for $120 and extra flowers $150.
Do not be afraid of up selling the customer, small increases in product quantity or inclusions can make a marginal difference in base cost but a huge difference in profitability.
The short answer is no, customers are not going to try matching the prices between your site and your store. You do however need to look at what your competitors charge and decide whether you match their prices, are cheaper or more expensive.
The vast majority of online flower e-tailers have two shipping cost calculations.
They either include shipping in the price of the product, or they charge a flat rate on top. One of the most common reasons for customers to drop out of a transaction before purchase online is shipping costs.
The best and most effective shipping cost for flowers sales is to include it in the cost of the product. To work out how much to include can be difficult to begin with if you don't know where most of your orders are being delivered. A general rule of thumb: if 80% of your orders cost say $7.50 to deliver with the rest ranging from $10 to $12.50 then include a $10 margin in your products for shipping costs. On some orders you will make money and on some you will lose money on the shipping, but it all equals out in the end if you do the calculation correctly.
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