Flower delivery is a mainstay of most florists, as it provides the convenience that customers want and need. However, delivery costs can be a hidden revenue-sucker for a floral business if they’re not carefully managed. Whether you build the charge into your floral prices or make delivery a separate charge is your choice, but one thing is certain: You need to make sure you’re charging enough. Here’s a three-step process you can take to determine what to charge.
- Cost per Mile
Even with a simple “flowers-only” delivery where you’re doing no setup or breakdown, you need to take into account the costs of driving to the venue or customer’s home. Work out the cost of operating the delivery vehicle for a month—maintenance, gas, parking, tolls, etc.—then determine how many deliveries you do per month and the average distance for each. For example, say your basic vehicle operating costs are $500 per month and you do an average of 40 deliveries a month, that’s $12.50 per delivery. If your average delivery is 10 miles, then your cost per mile is $1.25.
- Labor Cost
The delivery person, whether a regular employee or one specially hired for the delivery, comes with a cost. Work out the labor cost per hour for that person and figure it into your delivery fee based on how long each delivery takes. For example, if you are paying a delivery person $12 per hour and the delivery takes 30 minutes, add $6 onto the delivery fee.
- Total Cost
Once you know the Cost per Mile and Labor Cost, you can easily figure out what to charge for any delivery. Say you have a customer who wants flowers delivered 5 miles away, and you know it will take 30 minutes to deliver the flowers and return back. That means your delivery cost would be 10 miles at $1.25 per mile ($12.50) plus $6 labor cost, for a total delivery charge of $18.50. And of course, you’ll want to add a markup, so your final delivery charge could be $20.00.
Obviously, you would have to determine the actual costs based on pricing in your particular area, but it’s a great exercise to do in order to ensure you’re not losing revenue from unseen delivery expenses.
Special Requests = Special Prices
Some customers will want you to go above and beyond for deliveries, such as express delivery or delivering at specified times which may be outside of normal business hours. This is a service you should definitely consider providing, as it may make the difference between getting an order and not. However, make sure you’re charging a premium for those special requests, as this can be another good way to increase revenue.
While delivery pricing is certainly not the most important part of your floral business, it’s something that you should work out now, so that you don’t have to worry about whether or not you’re charging enough. Your customers will know the pricing up front which will make them happy, and you’ll know that you’re increasing revenues which will make you happy!
