Plant Sales: Quality Over Quantity

It’s a phrase growers are painfully familiar with when talking with customers: “Sharpen your pencil – we need a better price.”

In a competitive market, the tendency is to do whatever it takes to make the sale. That often means beating the lowest number out there. At some point, however, low prices add up to unsustainably low profits.

“You can sell a lot of product at a low price, but if the market drops, all of a sudden you don’t have enough cash flow to pay the bills,” says Ed Kiley, sales and marketing director for The Perennial Farm. “To generate cash you have to sell more product, but you may have to cut your price to do that. Ultimately you’ll sell yourself out of business.”

A competitive price is important, but selling the value of your products and your business is a surer path to success.

Price For Profit

Welby Gardens has a reputation for maintaining consistently higher prices for its wholesale bedding plants. And that’s a point of pride for CEO Al Gerace.

“In the early ’70s, with bedding plant prices stagnant and costs rising, we raised our price from $3 per flat to $4.20, simply to survive,” Gerace says. When competitors followed with an increase and customers continued to buy plants, Welby knew it was on to something.

The key, Gerace says, is getting a fair margin after covering all of your costs to produce and sell a plant.

“Often, growers only use direct cost along with some labor and overhead to price a crop,” he says. “Our pricing covers the total cost of production, overhead, distribution, and administration.”

Growers need meticulous accounting of total production space and utilization and total revenue on a year-round basis to set prices that cover actual costs, as well as identify when those prices need to go up.

“With seasonal business such as bedding plant production, calculating the true turns per square foot is essential. Knowing your real cost and having to answer to your banker means prices can’t remain stagnant,” Gerace says.

It takes guts to ask for more, but economic survival has to come first.

“Welby Gardens lives by a simple axiom: A customer will never offer you more than you ask,” Gerace says.

Value To The Consumer

With today’s Black Friday mindset, value simply equals low price for many consumers. Tim Brindley, president of Stacy’s Greenhouses, says low prices have a place, but that shouldn’t be where growers focus all of their energies.

“On basic groundcovers, annuals and perennials, ‘value’ is high-quality plants at an affordable price. That’s fine. But what drives innovation is adding value in ways that resonate with consumers and convince them to pay more for your product, or buy yours instead of someone else’s,” he says.

With the right packaging, program and message, that bargain-hunting groundcovers customer might also see the value in a combination succulent garden in a table-top pot that costs $20 or $30.

The trick is in understanding what customers really care about. “Value can mean a lot of things. It can mean multiple uses, less water, easier care, more flowers. Sometimes it means smaller packaging and a lower price. That’s fine too, as long as it’s a true value to the consumer. That’s really what they’re looking for,” he says.

Stacy’s approaches different consumer segments in different ways. Experienced gardeners may be willing to pay a little more in return for additional longevity in the plants they buy, especially in today’s economy. For Stacy’s, that means providing value with brands like Endless Summer hydrangeas and Knockout roses, and plant lines with multiple uses.

Stacy’s is also looking at how it can connect with the under-35-year-old, who is an inexperienced gardener and increasingly urban.

“With the economy and the job market, people are downsizing into apartments. How do we reach this young gardener that really doesn’t know anything about gardening yet, but will learn if you give them the ability to be successful? The value is giving them something they can start with. We’re looking at smaller packages that work in smaller spaces or have more uses, for example, collections of salvias that let them start to build something and understand how to do it.”

Value To Your Retailers

Creating value with your retail customer is just as important.

“I’m a big believer that you have to address the price hurdle by adding value,” says The Perennial Farm’s Kiley. “We are cheaper than some, more expensive than others. But we offer value by focusing on excellent customer service.”

To Kiley, that’s more than lipservice.

“Everybody thinks they have great customer service. But what are you doing to really please them? Is your delivery fast? Are you providing good tags on plant material? Do you have websites where people can reference information? Are you going to garden centers to give talks? You can get a perceived increase in your quality without really doing anything different with the plant,” he says.

Kiley cites his sales with a common variety as an example. “Everybody has rudbeckia ‘Goldsturm.’ Why should a retailer buy it from me?”

The answer, he says, is in the value he can add around the product.

“Natives are really big around here. We chose 225 natives that look good in a pot and we wrote a little book. We had Allan Armitage write an introduction and we told stories about the natives. We built a website, WhatsNative.com, with a lot of information, where you can download data sheets and big glossy pictures.

“So, why is my rudbeckia ‘Goldsturm’ better than yours? I have it on a website. I have it in a book. You can download data sheets and pictures. The perception is there must be something better about the Perennial Farm’s rudbeckia ‘Goldsturm’ than the one down the street,” he says.

“We get a better price.”

Leave a Reply

More From Grow Initiative...

May 23, 2017

6 Simple Ways to Acquire New Customers

Even the most successful brands need new customers if they want to grow their business, or stay profitable.

Read More
Tyler Beasley

May 21, 2017

Final California Spring Trials Thoughts From Allan Armitage Scholarship Winner Tyler Beasley

“I went home from California Spring Trials realizing that the students enrolled in our Greenhouse Management program at Spokane Community College need to experience the trials. Attending opened many doors of opportunity for me.”

Read More
Cannabis Adobe Stock feature

May 1, 2017

Why I Turned Down a High-Paying Offer to Grow Cannabis (More Than Once)

Young growers have passion for all aspects of organic and sustainable growing. The key to not losing them to the cannabis industry, according to Kelly Vance, a Technical Consultant for Beneficial Insectary, may be nurturing their interests in these fields by aligning greenhouse production with sustainable growing practices.

Read More
Latest Stories

May 23, 2017

6 Simple Ways to Acquire New Customers

Even the most successful brands need new customers if they want to grow their business, or stay profitable.

Read More
Tyler Beasley

May 21, 2017

Final California Spring Trials Thoughts From Allan Armi…

“I went home from California Spring Trials realizing that the students enrolled in our Greenhouse Management program at Spokane Community College need to experience the trials. Attending opened many doors of opportunity for me.”

Read More
Cannabis Adobe Stock feature

May 1, 2017

Why I Turned Down a High-Paying Offer to Grow Cannabis …

Young growers have passion for all aspects of organic and sustainable growing. The key to not losing them to the cannabis industry, according to Kelly Vance, a Technical Consultant for Beneficial Insectary, may be nurturing their interests in these fields by aligning greenhouse production with sustainable growing practices.

Read More
National Collegiate Landscape Competition Feature

April 27, 2017

Hoffman Nursery Cheers On the Next Generation of Hortic…

Hoffman Nursery was a sponsor of the recent 41st National Collegiate Landscape Competition, an event that offers several opportunities for companies in the green industry to meet and recruit the next-generation of horticulturists.

Read More
Kaylee South

April 22, 2017

American Floral Endowment Announces Winners of 2017 Pau…

Four students pursuing careers in horticulture now have scholarships to help them along the way, thanks to the American Floral Endowment.

Read More
Basil Planting feature

March 29, 2017

How You Can Embrace Greenhouse Food Production With Con…

Maintaining balance, learning continuously, and seeking support will help make your transition into producing greenhouse food crops a smooth one.

Read More
If your Wi-Fi is truly secure, your staff can help customers on the sales floor starting today

March 25, 2017

What Marketing Approach Can Attracts the Most Customers…

Inc.com surveyed more than a thousand customers to find out which marketing strategies worked best to entice them to try out a new business

Read More
Greenhouse Loyal Customer

March 16, 2017

How Brand Enthusiasts Can Be Your Most Loyal Customers

A marketing expert shares three core principles that direct-to-consumer companies can follow to create brand enthusiasts.

Read More

February 17, 2017

How to Keep Customers Coming Back With Top-Notch Servic…

A recent article on Forbes.com outlines seven ways organizations can take their customer service from good to great and beyond.

Read More

January 27, 2017

Why Greenhouse Growers Must Know Their Costs to Stay Co…

Tom Dudek, Senior Educator at Michigan State University Extension, says greenhouse growers should evaluate their production costs to determine if they need to make adjustments to stay competitive.

Read More
Workplace Trends

January 20, 2017

10 Trends Predicted to Impact the Workplace in 2017

Here are 10 workplace trends that Forbes contributor Dan Schawbel predicts for 2017 that may change the way you do business in the future

Read More

January 10, 2017

Sidney B. Meadows Scholarship Endowment Fund Accepting …

The deadline for applications is May 26, and 12 scholarships of $1,500 each will be awarded at the SEGreen Conference in August.

Read More
GROW Logo

December 28, 2016

Greenhouse Grower’s GROW Initiative: A Year In Review

Staying ahead of the competition in today’s world is about remaining in constant motion with innovation. To create a competitive advantage, you must consistently experiment with and learn from new ideas. Greenhouse Grower’s GROW initiative provided cutting-edge ideas and actionable advice.

Read More
Grow Summit 2016 group shot

December 20, 2016

Less Talk, More Action At Greenhouse Grower’s GRO…

Investing in technology, developing new marketing solutions, and recruiting young growers were just a few of the issues covered at GROW Summit 2016.

Read More
Dramm-Echter-Pink-Gerbera-Daisies

November 22, 2016

Dramm & Echter Donates Pink Gerbera Daisies During …

“As a local flower farm, we are honored to show our support by sharing symbolic pink flowers with each participant as they reach the midway point on their amazing journey,” says Bob Echter, Owner of Dramm & Echter.

Read More
deming-pdsa-cycle

November 21, 2016

How The PDSA Cycle Can Help You Improve Your Business

No successful business stays stagnant, which means you should constantly be looking for ways to make improvements to your business and your products. Are you looking for a good model to follow? Try the PDSA Cycle.

Read More
afe-fundraising-dinner

November 17, 2016

AFE Fundraising Dinner Celebrates Success, Raises Almos…

The American Floral Endowment’s biggest fundraising event of the year, the 2016 Annual Fundraising Dinner, did more than just honor industry champions. It also raised nearly $20,000 for the future of floriculture programs.

Read More
hoffman-nursery-owners

November 9, 2016

How Hoffman Nursery Invests In The Future Of The Greenh…

Hoffman Nursery believes in the future leaders of horticulture, and the operation invests in several programs to cultivate young people in their careers.

Read More