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Pricing your product: it’s more than just numbers
By ATB Financial 6 December 2018 3 min read
There’s just something special about going to a local business your family’s been supporting for years. Anyone who grew up in the Sherwood Park area would recognize family-run florist, Panda Flowers—they’ve been serving the Strathcona County area since 2000, and people just keep coming back. When we chatted with Dinesh Burad on behalf of Shilpa Burad—the current owner—we found that pricing does have something to do with it, maybe not in the way that you’d think.
Since Shilpa inherited the store from the original owners, there wasn’t too much she had to do to set up pricing. But she did carry on the legacy that they started—a legacy of fair pricing. “The pricing was determined to make sure that the customers got the best value,” Dinesh explained.
“The base product pricing includes the cost of flowers, greens, a vase, floral supplies and make-up charges. When the customers are just buying cut flower bouquets, they’re charged only for the greens and flowers—there are no make-up charges.”
While the math is important for setting a price, making sure that the customer isn’t paying more than they should is very important to the Burads.
Pricing in an ever-evolving industry
Being in the business of flowers means that you’re dealing with perishable goods. “The [wholesale] pricing is affected by local weather, which influences the product yield at the farms, the availability with local wholesalers at a particular time of the year, and transportation charge for bringing the flowers from farms to our shop,” Dinesh revealed. As a result, the pricing they offer their customers is dependent on the sourcing price of flowers.
But regardless of the wholesale pricing, Panda Flowers keeps their standard mark-up fee to make sure that their customers are still getting the best price.
Relationships (built on trust) set them apart
Fair pricing has played a huge role in building customer relationships that last a lifetime.
“We have many customers who first walked in the store as kids and they bought flowers with their parents help,” Dinesh recounted. “Then they grew up and bought their grad date flowers. Later they got engaged and decided to get their wedding flowers here, and later got flowers for their new baby. Now they keep on getting anniversary flowers year after year from our store. It's a very personal relationship and service that’s developed over years.”
The consistency and human-centered focus of the Burads has set Panda Flowers up to have customers for life.
“When someone’s looking for that personalized touch, they count on us to provide premium flowers,” said Dinesh. “We strive in being consistent in our product quality and fair pricing strategy. Customers repetitively come to us for our their floral arrangements. It's a niche market we serve and there’s competition—but there’s enough demand for quality work and less florists serving the market.”
Advice for entrepreneurs and pricing
Dinesh had a few tips for entrepreneurs looking to price their products and build incredible relationships with their customers.
- “Keep control of your spending. Know where you’re spending each and every dollar while purchasing your products, and know your purchasing strategy so that you can offer better pricing to your customers. Reduce unnecessary overheads.”
- “A fair pricing strategy makes you successful in the long run. Let the pricing scheme reflect the product and service you provide. This builds trust and long-term relationships with your customers through your integrity.”
- “Pay attention and listen to your customers. Here’s an example. One day, one of our regular customers came into the store and said, ‘I work in Edmonton and get my flowers on my way to home from work. Today I had to rush to get here before you closed. Would it be possible for you to stay open a little longer?
We responded to his request by increasing the store hours in the evening by an hour and keeping the store open for few hours on Sunday, for those customers whose anniversaries and birthdays fall on a Sunday. It's this service which sets us apart and makes us successful.
Increasing the hours did increase the staff expenditure and initially we took a dig into our profits, but our caring for that one customer so he doesn’t have to rush anymore brought in a few more referrals and loyal customers.