It’s a question we hear a lot, and we’re going to break down the answer as transparently as we can.
Simply put, to start, flowers are expensive to grow and far more expensive than a vegetable. On any given stem, there might be 5 flowers. If that plant was a pepper plant, each of those flowers can become a pepper. They can ripen at different times, producing many peppers from a single stem. The peppers can be picked at different times, allowing a single pepper stem to produce 3-5 products that can be sold. So each pepper can be sold for $0.20 or something, what that overall stem being valued at $1.00.
In contrast, if that stem is a flower, it gets cut and can only be used once. That means that per plant stem, the cost is higher. Most wholesale prices for a single stem are at least $1 unless you are a really large company (more on that later). Only a few flowers, such as carnations and occasionally tulips, are $0.50. And when it’s a busy season, like Valentine’s Day or Mother’s Day, the shipping companies and wholesalers charge an extra 10%.
This year, that’s on top of a 10% increase overall in flower costs. That means most floral providers are paying 10-20% more for the flowers than they did last year.
In response to rising prices, many flower companies are trying to cut out the many layers of wholesalers, distributors, and more in the supply chain. Instead of buying from a wholesaler here in the US, or from the auction houses in Europe (yes, flowers are actually sold in auction houses), they will work directly with farms or even purchase farms. This allows them to drive down that unit cost of the flower, though they now ship every individual box of flowers separately from that farm’s location (usually in South America) to you.
Not only are flowers more expensive to grow, a flower is also harder to keep preserved with a far shorter shelflife than a vegetable. Most flowers, like vegetables, come from South America, Canada, or Africa. This means that they travel very far to get to you. As fuel rates go up, the cost of producing a single flower increases as well.
Flowers get much cheaper when a company orders in bulk. If I can order 300 roses instead of 12, my unit cost will go down. This is why many companies sell only a few premade options. By limiting what they carry, they are able to increase how many units of any specific flower they order. Floracracy is an example of a company that doesn’t leverage that pricing option. Since we offer a significantly larger set of daily choices, we tend to buy small amounts of each flower. This means we pay a higher unit cost for each arrangement we sell.
Another factor in pricing is that floral experiences are driven by human creativity. What I mean by that is that, unlike many products that you purchase, a human had to create it. Humans pick the flowers, ship the flowers, prepare the flowers, arrange the flowers, and deliver the flowers. There are almost no machines in the process. So pricing has to capture the fair wages at every level of the supply chain.
Lastly, for companies that ship like Floracracy, getting the flowers to you is often the biggest cost. FLowers have to arrive either overnight or two-day, though we don’t even trust that given how often things get delayed. And in our case, we pay an additional fee to cool our boxes ($6 for every order alone!).
Overall, because of the costs involved to produce flowers, as an industry, it has some of the poorest profit margins. Many companies only achieve 20% - 40% margins (The beauty industry, in contrast, has well over 50% margins. Most technology companies have 75% - 90% margins).
When people think about the cost of buying flowers, I like to encourage them to compare it to eating at a restaurant. In so many ways, the comparison works. Flowers have been shown in a number of studies to feed and support mental health the way food feeds our bodies. When it comes to food, there is such a spectrum of options. You can grab something fast and cheap. Or you can sit down and have a beautiful, delicious experience where you will easily pay $200 - $300. Likewise, you can get cheap roses at a gas station for $5 or a custom arrangement that’s uniquely curated and using the freshest of ingredients for $300.
Unlike a meal, though, we’d argue that your flowers will feed you for a lot longer than a dinner