October 14, 1920 



The Florists^ Review 



27 



OcorKe Asmus. Herman P. Knoble. S. A. Anderson. 



The Committee of the F. T. D. which Investigated the Cost of Doing Retail Flower Business. 



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COST OF DOING BUSINESS 



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N OEDER to get a broader 

 scope of the relative cost 

 of doing business to the 

 profits derived from this 

 transaction, the committee 

 thought it advisable this 

 time to call on at least ten 

 florists of prominence in 

 the United States to give 

 us a report of their ex-' 

 penses in figures of percentage, in this 

 ■way making it unnecessary to reveal or 

 •disclose any actual figures in dollars or 

 <5ents. 



We have called on the following firms 

 for reports: Joy Floral Co., Penn the 

 Florist, Max Schling, Inc., John Breit- 

 xneyer's Sons, A. W. Smith Co., S. A. 

 Anderson, Gude Bros. Co., Schiller the 

 Florist, Knoble Bros. Co. and one other 

 "who did not get his report to the com- 

 mittee. 



Assuming that the trade papers will 

 copy this report, and so that you may 

 analyze the various expenses listed by 

 the individual firms, we have tabulated 

 each concern's expenses as they were 

 received by the committee, and then an- 

 alyze them afterwards. 



The following gives you the reports 

 as they were received: 



FIRM NO. 1. Per cent 



Purchase of cut flowers 28 



Baskets, ribbons, etc 8 



Plants of aU descriptions 13 



Overhead expenses 33 



Profits 8 



Total 100 



Overhead is made up of the following pecent- 

 *fl^^- Percent 



Wages 18 



Delivery S 



Advertising 4 



Incidentals, including rent, insurance, heat, 



light, refrigeration, etc 6 



Packing 2 



Total 33 



Cost to deliver each package, 21 cents. 



FIRM NO. 2. Per cent 



Merchandise 14.6 



Office salaries 4.4 



Labor and salaries 34.8 



■•nel 6.6 



Taxes 1.2 



The report of the committee on the cost of 

 doing business, presented b.v H. P. Knoble at 

 the Indianapolis convention of the Florists' Tele- 

 graph Delivery Association, October 12, 1920. 



Per Cent 



Ribbons 1.5 



Growing stock ' 1.8 



Rent 3.1 



Delivery expense 8.2 



Greenhouse 3.6 



Advertising 2.3 



Miscellaneous expenses 15.6 



Profit 7.3 



Miscelliineous expenses include insurance, in- 

 terest, freight, telephone, light, compost, ex- 

 press, etc. 



FIRM NO. 3. Per cent 



Administrative salaries 5 



Employees' salaries 13 



Rent 5 



Advertising 3 



Delivery expense 4 



Baskets, ribbons, chifFons 2 



Cut flowers 34 



Plants 6 



Other expenses, including taxes, wirework, 



vases, insurance, etc 24 



Net profit 5 



Average value of package $5.50 



Average cost per package for delivery 46 



FIRM NO. 4. Per cent 



Merchandise cost, which includes plants, cut 

 flowers, boxes, baskets, vases, ribbons, wire, 

 paper, string and everything that goes to 



make up the completed work 50 



Wages, including officers ., 19 



Rent s. J 10 



Advertising 1/ 5 



Sundries 6 



Profit 10 



We can check this by the month or by the 

 year, and we find little difficulty in holding the 

 items pretty close to the percentages. As the 

 volume of business increases, the excess over 

 rent and wage percentages may be applied to 

 advertising and employees' wages. 



FIRM NO. 5. Per cent 



Baskets 2.97 



Ribbons 1.3 



Miscellaneous 5.67 



F. T. D. merchandise 5.8 



F. T. D. expense 3 



Cut flowers, plants, etc 47.40 



Packing material 2.27 



Rent 2.05 



Taxes 2.27 



Depreciation on lease 1.3 



Delivery expense 5.26 



Labor and salaries 11.21 



Advertising 1.5 



Bad accounts 1.15 



In explanation would state that you will no- 

 tice that oar labor and salarias are 11.21 per 

 cent, while our delivery expenses are B.26 per 

 cent In the labor expense is included wages of 

 chauffeurs, delivery boys. etc. Taking this into 

 consideration, would lower our labor expense 

 about 4 per cent and increase our delivery ex- 

 pense to about 10 per cent. 



FIRM NO. 0. Per cent 



Sales 100 



Cost of merchandise sold: Percent 



Cut flowers and plants 47.01 



Accessories 9.96 50.97 



Gross profit 43.03 



General expenses: 



Administrative salaries 4.7."> 



Salaries of employees 14.74 



Rent 4.68 



Advertising 2.43 



Delivery expense 2.33 



Depreciation and bad debts 1.36 



All other expenses, including 

 light, insurance, stationery, tel- 

 ephone, legal, postage, ice, com- 

 mission, donation and tuxes. . . . 4.64 34.93 



Net profit 8.10 



Our advertising is .53 per cent higher than it 

 was last year as per the figures given, but in 

 previous years we had a reserve for spe- 

 cial purposes and from this special fund we 

 used a large part for advertising this year, and 

 IT we should count this special amount in, it 

 would amount to a little over 6 per cent, and 

 because this was a reserve fund and practically 

 separated and individual from the capital of 

 the business, I did not let the auditor take it 

 into consideration in setting up the table. 



The delivery expense is the actual cost of our. 

 automobiles and car fares. I could not give you 

 the exact amount of what the delivery of one 

 order costs, because the salaries of the chauf- 

 feurs and the salaries of the errand boys are in- 

 cluded in No. 4, while the insurance on the 

 automobiles is included in No. 9. In No. 9 

 I put all the petty expenses of our business. 



The average amount of an order sold is $10.20. 

 The average cost of each delivery, based only 

 on the cost of the automobiles and the actual 

 cost of car fare, la 24 cents. 



FIRM NO. 7. 

 Figures showing percentage of Income and 

 expenses based on net sales 100 per cent for 

 calendar year, 1919: 



Per cent 



Cash sales 51.0 



Charge sales 49.0 



Gross sales 100.0 



Less discount and allowances 4 



Net sales 99.6 



Inventory at beginning of period 1.4 



Purchases during period 47.9 



Buying expense 1.2 



Cost of baskets, boxes, etc 1.2 



Ijabor (for make-up men) 6.6 



Refrigeration 2 



Total to account for 58.5 



I^ess inventory at end of period 1.2 



Cost of goods sold 57.3 



Gross trading profits 42.7 



Advertising 9.6 



Selling wages 6.0 



Rent and heat 4.0 



Total selling expense 18.60 



