hi again it's jason from fraser valley
rose farm and today i want to talk about
how to price your plants to sell
now this can be an awkward conversation
uh my first impulse when talking to a
plant person is to talk about plants
that's what we have in common
and it's what we both love uh why should
we let a little thing like money come
between us
however if you're selling plants and you
intend to make that a part of your hobby
or a small business
uh at some point they're gonna ask you
how much you're charging and the better
you prepare yourself for that
conversation
the more confident you can be in quoting
a price so the principles of this are
very very simple you have to look at two
points of price the first one is what
can you make money at how
what's the markup what's the price where
you can make money
and the other one is the price that the
customer is willing to pay
and these may not be the same price at
all if if the customer is not willing to
pay
what you can make money at you shouldn't
grow that plant
and some of the best plants to grow are
the ones where
you can make money at this level and the
customer is willing to pay quite a bit
more so those are the principles
involved here that sounds simple enough
but let's delve into them first let's
talk about
how you how you can tell if you can make
money on a plant
the easiest way to calculate whether
you're making money on a plant
is to apply in a standard markup to
a known cost i'll give you the quick
example let's say you bought a plant for
five dollars
and you sold it for 10 that means you
doubled it or you went to
two times markup a two times markup is
typically across
all of retail a decent markup to start
looking at
for any product you buy in and resell i
know that
we're also going to talk about growing
our own plants in this
in this section but let's just start
with that simplest example that you
bought something and you sold it
so two a two times multiple across
retail is pretty standard or pretty
reasonable in plants we try to go a
little bit higher than that
the reason for that is because plants
are a little bit more perishable
a little more time sensitive in nature
you get a short season to sell them in
and you have your spring you have your
summer
but usually by fall people have come
their attention has come off of plants
so you may get stuck with that plant
over a longer period of time if you
can't sell it in that
in that season uh in addition to that it
takes effort and work to keep it in good
condition and if you have to hold it
very
much longer there are there is a chance
that you will lose those plants
so you compensate yourself by making
your multiple a little more than two
times usually two and a half times or
three times
so if you were taking a different
example you bought a plant for two
dollars
and you times it by two and a half you'd
end up with five dollars as your selling
price
and that in general is going to be
enough to make sure that you're going to
make money on that plant every time
okay so now you have the question of
what if you grew your own plants because
you know we're plant geeks we'll grow
our own plants
we grow them from seed we grow them from
cuttings we grow them from divisions
how do you cost those so you can take a
bit of a shortcut here
and i'm going to describe the shortcut
first and then we'll go into the detail
of whether you had to cost it yourself
the shortcut would be that you look for
a wholesale in your area that sells
the same or a similar plant in a similar
size of pot
and you apply their cost or what they
would charge you for that plant
and then just times it by the same
multiple so if you're buying a pot of
lavender
in nine centimeters you're buying and
you grew it yourself from seed
but a wholesaler across town sells it
for three dollars
then you would look and say well i'm
going to sell that for 7.50
okay makes sense the next thing is if
you have to determine cost
now determining cost yourself is a
little tricky because
most growers tend to
underprice their own labor their own
growing space
they really don't apply costs well and
honestly
this is this goes right up to large
growers who don't
do a great job of costing their plants
so i'm going to give you some some
numbers here
some of them are very easy that you can
determine from your own
costs so you can determine from the
volume of soil how much you paid for the
soil and how much went into that pot
you can determine your cost of your pot
and if you bought a plug in
then you could determine the cost of
that plant input
taking those three together you can say
i'm going to make an example here
let's say you assumed i'm just going to
use round numbers that you paid 10 cents
for the pot
you paid 10 cents for the soil
and you paid 30 cents for the plug
so now your cost on that plant is 50
cents
so would you apply the multiple right
now call that a dollar 25
no you wouldn't because there's a
growing time involved too
and for growing time you actually have
to apply a cost to that as well
otherwise
you're more or less saying that your
growing space and your growing
efforts are an unlimited resource and
you can if you don't cost them in like
that
you're going to end up under pricing
your plants and
it may skew your business in the
direction of you doing a lot of extra
work for not a lot of extra money
so you have to apply a cost i'm going to
give you a cost here
that is reasonable although it's not
exact and
and this is this is hard to do because
everybody has different growing
situations but based on a study that i
read from 2006
and cost forward until now the average
price for a grower per square foot
week of a nursery plant or young plant
is somewhere around 50 cents per
square foot week okay now
um a tray and let's say we've got an 18
up tray
uh like this guy here
a tray like this takes up one and a half
square feet
so for every week that this tray sits on
a bench
you should apply 75 cents of
cost to your to your plant so if i
grew this tray for 10 weeks i should
apply
seven dollars and 50 cents across the
tray
and i would divide that by the number of
plants and then i would get a
cost per square foot week applied to the
plants
of what i grew and then i can calculate
that out
to add that to the other costs and give
you
your base price or your base cost so
that you can multiply that out
to make your margin sorry that sounded
complicated but you really do have to
just get your head around the fact that
even if your costs
are different than somebody else's you
still have to apply some cost to it and
unless you
are an accounting whiz uh you probably
should just pick
a number uh that is reasonable and in
this case i'm talking about uh
50 cents per square foot week for your
plants and apply that across
and to the number of weeks that your
plants live in your care
once you've applied that formula once
you've come from a cost and you've gone
up to your
your final profitable price you really
shouldn't consider string below that
even if your customers are only willing
to pay a little bit less than that
that should be a warning to you that
this is not a profitable plan you can
grow it for yourself if you'd like
but you shouldn't be growing it for
resale to your customers because they're
just not willing to pay a price
that's going to make you any money i did
another video on how to choose plants
for your nursery business i will link
that one up above here it is a little
bit more in detail on this about how to
choose plants
but the the basics of it is you don't
want to choose the common stuff
as a small grower you don't want to
choose the common stuff that the bigger
growers will beat the hell out of you on
so the idea on this is that customers
actually do know some prices they don't
know all of them
but on the common items if you went down
to walmart and you were buying a pack of
pansies
for 1.99 once that price is in their
head it's a very common item
they're not going to pay more than that
price for the same pansies from you
so at that point if you can't produce
them for far less than that if you can't
double double and a bit your price and
still make money on it you shouldn't
grow that plant
and that's that goes across a whole wide
range of plants
now there is a little bit of room in the
idea of rarity or scarcity so if you go
and you find
items that are a little bit less
well-known a little bit special a little
bit interesting
you can increase your your markup
generally
and you'll find customers who are
willing to pay a little bit more for it
i'll give you an example here is that i
have this clematis and i this is a
clematis
integrofolia doesn't look like much
right now mongolian bells is the
cultivar i grew it from seed and i don't
see
anybody else on the market having it so
if
in this size other people were selling
perennials for
ten dollars i might consider lending it
a premium up to twelve dollars or
fourteen dollars
based on this item not being very common
so that's the idea here is that you can
sometimes take advantage of a little bit
of this thing of
if you're good at choosing uh uncommon
items
or putting items out there that are a
little more scarce then you can charge a
little bit more of a premium and your
customers won't mind that quite so much
because
there's nothing to compare it to now as
for how figuring out what the market is
willing to bear on these things
you're going to have to do some shopping
around on that and i i assume as a plant
lover you're going to
shop around your local nurseries it
doesn't hurt to pull out your smartphone
and uh and just take pictures of prices
of any items you would be considering
selling
and see what they charge for it uh and
then compare that back to your own
varieties
are your items the same items in the
same sizes well then you have a price
that's a comparable price
if your items are a little more scarce
or a little uh
more interesting you might charge a bit
of a premium on that
you can also go online and look at
online stores and see what people are
selling
you do want to try the apples to apples
comparison sometimes online stores that
ship across the country
are in a bit of a different price league
than what your local sellers would be
and so you have to keep that in mind as
well but you know there's no better way
to figure this out
than to shop all right thanks for
watching the video today on how to price
your plants for sale i wish you best
luck
on that if you have any questions or a
conversation that you'd like to make
on how to price your plants for sale
love to hear from you drop that in the
comments below the video