Flowers: Supply and Demand

Being a perishable product, flowers are a classic example of supply and demand.

Virtually all flower buyers are aware of this during the Valentine’s period when roses are in extremely high demand and supply is low. During February the rose production is at its lowest due to the climate and production cost is highest. Supply and demand kicks in.

Most florists, including us, are unwilling to pass along to the consumer all of the cost increase that we occur. (Resulting in a break even P & L for February) If the normal mark up was done with the roses, the retail cost would more than double.

During the summer months, when flowers are over abundant and demand is lower, the growers have a choice of either growing fewer flowers or reducing the wholesale cost or maintaining the average year round cost and dumping the surplus.

Many growers reduce the price to have some cash flow and hope to get lucky with sales. The problem is accelerated due to the location of the flower farms. Most are near the Equator where the sun is the most intense, the days longer, the climate perfect for growing. The consumer demand for flowers is located in the United States, Europe and Asia.

So they ship the flowers to the markets, occurring shipping expenses and hope to sell them. If they do not sell within a day or two, they have the option of reducing the price or paying the trash collector to dispose of them. The flowers have to be moved out quickly to maintain quality. The smart option is to reduce the price and hope.

Now the retail florist purchases flowers at a reduced cost. What happens then?

Flower sales are slower in the summer and cash flow is less for the retail florist also, so how do you price the discounted flowers? Maintain the normal mark up or reduce the price and pass on the bargain to the consumer? The majority of the florists keep their normal mark up to make up for slow sales.

At City Line Florist, we always pass on the price reduction to our customers! Thus our cash & carry specials on roses which you know bounces around a little in price due to supply and demand.

Currently you can buy a dozen roses for $10.95 cash and carry as well as big price reduction on delivered and arranged roses locally.

So expect to pay more for quality roses during February and take advantage of the cash & carry deals during the non-holiday times.

The floral industry is a perfect example of a sustainable industry. Or is it?

Sustainability is the new buzz word and a noble one it is. The floral industry is a perfect example of a sustainable industry. Or is it? Due to the nature of our product, growing in the wild, in greenhouse and on farms, it is an industry that would appear at the top of the list for most people as a sustainable industry and long before sustainability became popular. Our products are living plants and blossoms, occurring in nature in every part of the world.

Sorry to say, we also have been guilty of wasting our natural resources and polluting our environment in the quest to product bigger, longer lasting flowers undamaged by insects. Both food and floral crops have been huge users of pesticides, insecticides and chemical fertilizers. The residues of these products were then transported through out the world to the end consumers. Government regulations for many years in the past required that out of date and unused pesticides, insecticides and fertilizer are disposed of by burying them in the ground. A great way to pollute our water table!

Fortunately, the growers have spearheaded the quest to correct these things. Over the past years, the majority of our flowers and plants have been provided by growers who are dedicated to tackling these difficult challenges. Bravo!
We are in the process of being officially certified as a VeriFlora Retailer http://www.veriflora.com dedicated to sustainable practices of our industry.

More information in a future blog about the rigorous environmental accountability while at the same time addressing the health and well-being of workers, their families and communities.

What would Charlie Think?

When our grandfather Charles Roehrich founded City Line Florist in 1918, he had a cigar box to keep the Sales receipts in, the office consisted of paper, pencils and a ledger for accounting, and a five-digit telephone number (3-6080). Talk about “Old School”!

Charlie passed away in 1980 at age 85 and experienced dramatic changes in the world during his life time. Space does not allow me to list the things he witnessed being invented, and becoming common conveniences for all of us.

When I think of the technology that we use everyday in the daily functioning of our Flower Shop, I wonder “What would Charlie think?” of all the state of the art business and technology tools that we use.

He was with us to see the computer making our accounting, billing, order taking, delivery system, payroll system and credit card processing make us much more efficient. He was taken back with the initial cost of over $100,000. in hardware and software cost, but he understood the necessity.

Now we communicate with our customers via Facebook, Twitter, emails and starting today with a Blog.

What would Charlie Think? He instilled in us the need of outstanding Customer Service and the need to communicate with our customers, so I can safely say he would have a giant learning curve, but he would have loved it!