It’s very easy to get confused when comparing the costs of different web site options for florists. It’s like shopping for groceries and trying to compare different brands of jam or yogurt who never seem to offer containers of exactly the same size. In this article I will try to paint a clearer picture of the real costs associated with the different pricing models.
Fixed Costs
By far the easiest item to compare, fixed costs are the guaranteed monthly amount that you will be billed by the provider. Even if you don’t take a single order, don’t make a one solitary adjustment to your site, not even quick phone call to support, this is what you will pay.
The options available for florists range from $0 to $1,000 per month, which is a remarkable range. In the higher end you can expect to receive a number of value-add services like active and ongoing SEO, or access to nationwide loyalty and marketing programs.
Some packages have a single upfront payment with no monthly commitment, but be aware of “per incident” service fees (we’ll touch on those in a moment). For experienced web users who require little support and few updates, this provides an option for cost control.
The most common price range is $70-$100 per month, with some options as low as $25-$30. Monthly fees are billed at the beginning of the month.
Transaction Fees
A popular pricing model from a few years ago, that still lives on today, is the “per transaction” fee. Popularized by the wire services, and also employed by some independents, this fee is billed at the end of the end of the month based on how many sales occurred through the web site.
For a wire service web site these fees can add up quickly at $3.45 Transaction Fee + $1.50 Dove/Mercury = $4.95 per order. It only takes one order per week to drive the monthly cost of a wire service web site over the $100 threshold.
If you are planning to have a successful web site (and really, who isn’t?), be sure to plan for the potential variable costs that come with transaction fees.
Per Incident or Service Fees
Loosely described, Per Incident or Service fees apply to anything not covered by the monthly fixed fee. This can include support calls if you don’t have a monthly plan, or specialty services like graphic design, Flash development, web site updates, theme or template changes or custom programming.
When interviewing potential web site developers, be sure to gain a good understanding of what is included in the monthly fee, and ask for a fee schedule for any additional services. If you don’t understand the answer, keep asking or walk away. Don’t be bullied into something you don’t understand.
Opportunity Costs
Probably the hardest to value, Opportunity Costs can be loosely defined as the potential lost revenue from choosing one option over another.
Many low-cost web site platforms are based on out-dated technology, poor programming or just don’t follow best practices for development and SEO. If choosing a lower cost option means ranking below your competition and generating fewer sales, is that really a lower cost option?
Example:
- Package A:
- $40 / month, $1 transaction fee
- Ranks #8 for “St Louis Florist”
- Receives 2.91%* of 6,600 searches = 192 visits
- Converts 2%** of visitors to customers = 4 sales
- Avg sale $50 = $200 revenue
- Monthly cost $40 + $4 fees = $44
- Package B:
- $100 / month, $0 transaction fee
- Ranks #2 for “St Louis Florist”
- Receives 13.45% of 6,600 searches = 888 visits
- Converts 2% of visitors to customers = 18 sales
- Avg sale $50 = $900 revenue
- Monthly cost $100
Comparing the two options, Package B had a net revenue of $800 vs Package A at $156. The Opportunity Cost of choosing the cheaper web site is $644.
Now, consider that higher-end florist web sites tend to convert at higher-than-average rates, and upsell to a higher transaction value, Package B could realistically earn 40 sales of $75 dollars for $3,000 in monthly revenue. If the Package B site earned a #1 ranking, it would receive 56.36% of the search traffic – that’s 3,720 visitors!
While it’s not a perfect blanket statement, there is truth in the old saying that “You get what you pay for.”
What has been your experience with the costs of owning a florist site? How do you factor in your time in managing the site?
* Based on the standard distribution of clicks across the top 10 search results.
** Based on the standard conversion rate for ecommerce web sites.
There are any things to take consideration of when discovering the costings of your products or services. You need to think of overhead expenses, electricity, water, and rent expenses.
Add all of those up (even depreciation expense) and make sure that you sell your products at a reasonable price that also covers cost.
Thank you for a post many businessmen need to be aware of!
We sometimes do not think straight when it comes to money and we choose the cheapest option. We forget to factor in that the cheaper option might actually bring us much less money than someone that asks for more and promises to deliver more. A diligent research before actually choosing someone can show us that our money would be well spent on a better SEO company.